AB 2802: Insurance payments: interception.

Existing law creates the Department of Child Support Services and provides for the interception of funds from state tax refunds, lottery winnings, unemployment compensation benefits, and benefits under the Public Employees Retirement System that otherwise would be paid to a person owing past due child support. Existing law creates the Department of Insurance, headed by the Insurance Commissioner, and prescribes the departments powers and duties.

This bill would, beginning January 1, 2020, require an insurer to cooperate with the Department of Child Support Services to identify claimants who are also obligors who owe past-due child support, and to report those claimants to the department. The bill would require an insurer to identify and report a claimant if his or her claim seeks an economic benefit, as defined, but would exempt specified economic benefits, including a payment to the mortgagee or lienholder of the property or a payment from an accelerated death benefit, and would limit withholding from a qualifying disability insurance payment to 50% of the claim for the benefits. The bill would require an insurer to comply with the requirements of a notice from the Department of Child Support Services that a reported insurance claim is payable to an obligor who owes past-due child support, unless the notice is received after the insurer has paid the claim. The bill would provide that an insurer, specified agent, specified insured, and a central reporting organization, as defined, that releases information in accordance with this bill, withholds payments, as specified, and makes disbursements, as specified, is immune from liability under certain circumstances. The bill would also require that the data obtained by the department, or by an insurer or its designated agent, only be used for the purpose of identifying claimants who are also obligors who owe past-due child support, and would specify that various laws protecting the privacy and security of data apply. The bill would authorize an insurer to use a central reporting organization to automate its claims identifying process, and would require an insurer that does not use a central reporting organization to determine if a claimant owes past-due child support before paying a claim, as specified.

Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.

This bill would make legislative findings to that effect.