BILL NUMBER: AB 204	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Harman

                        JANUARY 31, 2005

   An act to amend Section 10172.5 of the Insurance Code, relating to
life insurance.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 204, as introduced, Harman.   Life insurance: interest:
posthumous conception.
   Existing law requires each insurer admitted to transact life
insurance, credit life insurance, or accidental death insurance in
this state that fails or refuses to pay the proceeds of any policy of
life insurance issued by it within 30 days after the date of death
of the insured to pay interest, at a specified rate, on any moneys
payable and unpaid after the expiration of the 30-day period
requirement except as specified.
   This bill would provide that this requirement shall not apply if
the insurer has received a specified notice regarding the
availability of the insured's genetic material for posthumous
conception.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 10172.5 of the  Insurance Code  is amended to
read:
   10172.5.  (a) Notwithstanding any other provision of law, each
insurer admitted to transact life insurance, credit life insurance,
or accidental death insurance in this state that fails or refuses to
pay the proceeds of, or payments under, any policy of life insurance
issued by it within 30 days after the date of death of the insured
shall pay interest, at a rate not less than the then current rate of
interest on death proceeds left on deposit with the insurer computed
from the date of the insured's death, on any moneys payable and
unpaid after the expiration of the 30-day period. This section shall
apply only to deaths of insureds which occur on or after January 1,
1976.(b)  Nothing in this section shall be construed to allow any
insurer admitted to transact life insurance, credit life insurance,
or accidental death insurance in this state to withhold payment of
money payable under a life insurance policy to any beneficiary for a
period longer than reasonably necessary to transmit that payment.
Whenever possible payment shall be made within 30 days after the date
of death of the insured.
   (c) In any case in which interest on the proceeds of, or payments
under, any policy of life insurance, credit life insurance, or
accidental death insurance becomes payable pursuant to subdivision
(a), the insurer shall notify the named beneficiary or beneficiaries
at their last known address that interest will be paid on the
proceeds of, or payments under, that policy from the date of death of
the named insured. That notice shall specify the rate of interest to
be paid  . In any case where the notice required by Section
249.5 of the Probate Code has been given to a life insurer, that
insurer is not required to provide the notice required by this
section until after it has been notified that a child has actually
been born within two years of the death of the decedent. The
obligation shall be deemed satisfied by giving notice to the person
who first provides proof to the insurer that the child has been born
alive. 
   (d) This section shall not require the payment of interest in any
case in which the beneficiary elects in writing delivered to the
insurer to receive the proceeds of, or payments under, the policy by
any means other than a lump-sum payment thereof.  
   (e) This section shall not require the payment of interest in any
case in which the insurer has been provided with the notice specified
in subdivision (b) of Section 249.5 of the Probate Code.