BILL NUMBER: AB 600 CHAPTERED 10/10/99 CHAPTER 827 FILED WITH SECRETARY OF STATE OCTOBER 10, 1999 APPROVED BY GOVERNOR OCTOBER 8, 1999 PASSED THE ASSEMBLY SEPTEMBER 9, 1999 PASSED THE SENATE SEPTEMBER 7, 1999 AMENDED IN SENATE AUGUST 16, 1999 AMENDED IN SENATE JULY 8, 1999 AMENDED IN SENATE JUNE 17, 1999 AMENDED IN ASSEMBLY MAY 28, 1999 AMENDED IN ASSEMBLY MAY 25, 1999 INTRODUCED BY Assembly Members Knox and Villaraigosa (Coauthors: Assembly Committee on Appropriations and Assembly Members Ashburn, Brewer, Calderon, Campbell, Cedillo, Davis, Frusetta, Granlund, Havice, Hertzberg, Honda, Jackson, Kuehl, Lempert, Maldonado, Migden, Papan, Romero, Runner, Scott, Shelley, Steinberg, Thompson, Thomson, Wesson, Wiggins, Wildman, Wright, and Zettel) (Coauthors: Senators Baca, Burton, Hayden, Solis, Speier, and Vasconcellos) FEBRUARY 19, 1999 An act to amend Section 354.5 of the Code of Civil Procedure, and to add Chapter 4 (commencing with Section 13800) to Division 3 of the Insurance Code, relating to insurance claims of Holocaust victims, making an appropriation therefor, and declaring the urgency thereof, to take effect immediately. LEGISLATIVE COUNSEL'S DIGEST AB 600, Knox. Insurance claims of Holocaust victims. (1) Existing law prescribes certain powers and duties of the Insurance Commissioner and of the Department of Insurance. Existing law requires the department to develop and implement a coordinated approach to gather, review, and analyze the archives of insurers and other archives and records, as specified, to provide for research and investigation into insurance policies, unpaid insurance claims, and related matters of victims of the Holocaust or the Nazi-controlled German government or its allies, and the beneficiaries and heirs of those victims, and for losses arising from the activities of the Nazi-controlled German government or its allies for insurance policies issued before and during World War II by insurers who have affiliates or subsidiaries authorized to do business in the state. Existing law also provides that the department has an affirmative duty to play an independent role in representing the interests of Holocaust survivors, and provides that if an insurer or any affiliate of an insurer has failed to pay any valid claim from Holocaust survivors, the certificate of authority of the insurer shall be suspended until the insurer, or its affiliates, pays the claim or claims. This bill would, in addition, enact the Holocaust Victim Insurance Relief Act of 1999, which would, among other things, require the commissioner to establish and maintain the Holocaust Era Insurance Registry, which would contain records and information relating to insurance policies issued by insurers in the state, either directly or through a related company, to persons in Europe which were in effect between 1920 and 1945. This bill would require those insurers to file or cause to be filed that information with the commissioner to be entered into the registry. It would also require those insurers to certify as true certain additional information, and would make it a crime to knowingly certify as true any material matter which the insurer knows to be false. By creating a new crime, this bill would impose a state-mandated local program. This bill would also provide for certain civil penalties for knowingly filing false information about a policy, as required by these new provisions. The bill would appropriate these civil penalties from the General Fund to the Department of Insurance to be used to aid in the resolution of Holocaust insurance claims. It would also require the commissioner to suspend the certificate of authority of any insurer that fails to comply with these requirements by the 210th day of the effective date of these provisions, and to adopt emergency rules to implement these provisions. (2) Existing law authorizes any Holocaust victim, as defined, or heir or beneficiary of a Holocaust victim, who resides in this state and has a claim arising out of an insurance policy or policies purchased in Europe between 1920 and 1945 from a specified insurer to bring a legal action to recover on that claim in any superior court of the state for the county in which the plaintiff or one of the plaintiffs resides, which shall be vested with jurisdiction over that action until its completion or resolution. Existing law also provides that any claim of this type shall not be dismissed for failure to comply with the applicable statute of limitation if the action is commenced on or before December 31, 2010. This bill would instead authorize those persons to bring a legal action to recover on a claim arising out of an insurance policy or policies purchased or in effect in Europe before 1945 from a specified insurer, and would change the definition of "Holocaust victim" and "insurer," as specified. (3) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. (4) This bill would declare that it is to take effect immediately as an urgency statute. Appropriation: yes. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 354.5 of the Code of Civil Procedure is amended to read: 354.5. (a) The following definitions govern the construction of this section: (1) "Holocaust victim" means any person who was persecuted during the period of 1929 to 1945, inclusive, by Nazi Germany, its allies, or sympathizers. (2) "Related company" means any parent, subsidiary, reinsurer, successor in interest, managing general agent, or affiliate company of the insurer. (3) "Insurer" means an insurance provider doing business in the state, or whose contacts in the state satisfy the constitutional requirements for jurisdiction, that sold life, property, liability, health, annuities, dowry, educational, casualty, or any other insurance covering persons or property to persons in Europe at any time before 1945, directly or through a related company, whether the sale of the insurance occurred before or after the insurer and the related company became related. (b) Notwithstanding any other provision of law, any Holocaust victim, or heir or beneficiary of a Holocaust victim, who resides in this state and has a claim arising out of an insurance policy or policies purchased or in effect in Europe before 1945 from an insurer described in paragraph (3) of subdivision (a), may bring a legal action to recover on that claim in any superior court of the state for the county in which the plaintiff or one of the plaintiffs resides, which court shall be vested with jurisdiction over that action until its completion or resolution. (c) Any action brought by a Holocaust victim or the heir or beneficiary of a Holocaust victim, whether a resident or nonresident of this state, seeking proceeds of the insurance policies issued or in effect before 1945 shall not be dismissed for failure to comply with the applicable statute of limitation, provided the action is commenced on or before December 31, 2010. SEC. 2. Chapter 4 (commencing with Section 13800) is added to Division 3 of the Insurance Code, to read: CHAPTER 4. HOLOCAUST ERA INSURANCE REGISTRY 13800. This chapter shall be known and may be cited as the Holocaust Victim Insurance Relief Act of 1999. 13801. The Legislature finds and declares the following: (a) During World War II, untold millions of lives and property were destroyed. (b) In addition to the many atrocities that befell the victims of the Nazi regime, insurance claims that rightfully should have been paid out to the victims and their families, in many cases, were not. (c) In many instances, insurance company records are the only proof of insurance policies held. In some cases, recollection of those policies' very existence may have perished along with the Holocaust victims. (d) At least 5,600 documented Holocaust survivors are living in California today. Many of these survivors and their descendents have been fighting for over 50 years to persuade insurance companies to settle unpaid or wrongfully paid claims. Survivors are asking that insurance companies come forth with any information they possess that could show proof of insurance policies held by Holocaust victims and survivors, in order to ensure that closure on this issue is swiftly brought to pass. (e) Insurance companies doing business in the State of California have a responsibility to ensure that any involvement they or their related companies may have had with insurance policies of Holocaust victims are disclosed to the state and to ensure the rapid resolution of these questions, eliminating the further victimization of these policyholders and their families. (f) The international Jewish community is in active negotiations with responsible insurance companies through the International Commission on Holocaust Era Insurance Claims to resolve all outstanding insurance claims issues. This chapter is necessary to protect the claims and interests of California residents, as well as to encourage the development of a resolution to these issues through the international process or through direct action by the State of California, as necessary. 13802. For purposes of this chapter, the following definitions shall apply: (a) "Holocaust victim" means any person who was persecuted during the period of 1929 to 1945, inclusive, by Nazi Germany, its allies, or sympathizers. (b) "Related company" means any parent, subsidiary, reinsurer, successor in interest, managing general agent, or affiliate company of the insurer. (c) "Proceeds" means the face value or other payout value of insurance policies and annuities plus reasonable interest to date of payment without diminution for wartime or immediate postwar currency devaluation. 13803. The commissioner shall establish and maintain within the department a central registry containing records and information relating to insurance policies, as described in Section 13804, of Holocaust victims, living and deceased. The registry shall be known as the Holocaust Era Insurance Registry. The Attorney General, in coordination with the department, shall establish appropriate mechanisms to ensure public access to the registry. 13804. (a) Any insurer currently doing business in the state that sold life, property, liability, health, annuities, dowry, educational, or casualty insurance policies, directly or through a related company, to persons in Europe, which were in effect between 1920 and 1945, whether the sale occurred before or after the insurer and the related company became related, shall, within 180 days following enactment of this act, file or cause to be filed the following information with the commissioner to be entered into the registry: (1) The number of those insurance policies. (2) The holder, beneficiary, and current status of those policies. (3) The city of origin, domicile, or address for each policyholder listed in the policies. (b) In addition, each insurer subject to subdivision (a) shall certify to any of the following: (1) That the proceeds of the policies described in subdivision (a) have been paid to the designated beneficiaries or their heirs where that person or persons, after diligent search, could be located and identified. (2) That the proceeds of the policies where the beneficiaries or heirs could not, after diligent search, be located or identified, have been distributed to Holocaust survivors or to qualified charitable nonprofit organizations for the purpose of assisting Holocaust survivors. (3) That a court of law has certified in a legal proceeding resolving the rights of unpaid policyholders, their heirs, and beneficiaries, a plan for the distribution of the proceeds. (4) That the proceeds have not been distributed and the amount of those proceeds. An insurer who certifies as true any material matter pursuant to this subdivision, which the insurer knows to be false, is guilty of a misdemeanor. (c) An insurer currently doing business in the state that did not sell any insurance policies in Europe prior to 1945, shall not be subject to this section if a related company, whether or not authorized and currently doing business in the state, has made a filing under this section. 13805. Any insurer that knowingly files information about a policy required by this chapter that is false shall, with respect to that policy, be liable for a civil penalty not to exceed five thousand dollars ($5,000), which penalty is hereby appropriated to the department to be used by it to aid in the resolution of Holocaust insurance claims. 13806. The commissioner shall suspend the certificate of authority to conduct insurance business in the state of any insurer that fails to comply with the requirements of this chapter by the 210th day after this section becomes effective, until the time that the insurer complies with this chapter. 13807. The commissioner shall adopt rules to implement this chapter within 90 days of its effective date. The rules shall be adopted as emergency regulations in accordance with Chapter 3.5 (commencing with Section 11340) of the Government Code, and for the purposes of that chapter, including Section 11349.6 of the Government Code, the adoption of the rules shall be considered by the Office of Administrative Law to be necessary for the immediate preservation of the public peace, health and safety, and general welfare. SEC. 3. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution. SEC. 4. This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are: In order to establish the Holocaust Era Insurance Registry and to ensure the resolution of claims under insurance policies held by Holocaust victims and survivors at the earliest possible time, it is necessary that this act take effect immediately.