Bill Text: CA SB585 | 2015-2016 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Insurance payments: interception.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Failed) 2016-11-30 - From Assembly without further action. [SB585 Detail]

Download: California-2015-SB585-Amended.html

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BILL NUMBER: SB 585	AMENDED
	BILL TEXT

	AMENDED IN SENATE  APRIL 20, 2015

INTRODUCED BY   Senator Leyva

                        FEBRUARY 26, 2015

   An act to add Article 7.5 (commencing with Section 13550) to
Chapter 2 of Division 3 of the Insurance Code, relating to insurance.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 585, as amended, Leyva. 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 department's powers and duties.
   This bill would  , beginning July 1, 2016,  create the
Insurance Payment Intercept Program within the Department of
Insurance. The bill would require the Department of 
Insurance to consult with the Department of Child Support Services to
develop a program requiring an insurer or a self-insurer, each as
defined, to notify the Department of Child Support Services of a
claim owed to a person owing a duty of child, spouse, or family
support, defined as an "obligor." The bill would also require the
Department of Insurance to establish a procedure identifying the
types of claims that the commissioner determines to be properly
subject to withholding to satisfy a child support obligation, and
prescribing the duties of an insurer's or self-insurer's reporting
obligations necessary to implement the bill's provisions. 
 Child Support Services to facilitate a data match system using
automated data exchanges through which an insurer or self-insurer
would be required to report, no later than 30 days prior to a claim
payout, the name, address, and, if known, date of birth and social
security number or other taxpayer identification number for each
claimant to match a claimant who owes past due support   ,
as specified.  
   This bill would authorize the commissioner, in his or her
discretion, to impose a fine, not to exceed $1,000, upon an insurer
or self-insurer who violates the bill's requirement to provide claim
data. The bill would additionally authorize the commissioner to issue
an order requiring the violator to comply with that requirement.
 
   Existing constitutional provisions require that a statute that
limits the right of access to meetings of public bodies or the
writings of public officials and agencies be adopted with findings
demonstrating the interest protected by that limitation and the need
for protecting that interest.  
   This bill would make a legislative finding and declaration
relating to the necessity of treating insurance claims data and any
past due support information obtained by the Department of Child
Protective Services as confidential in order to protect the privacy
of individual claimants and persons owed past due support. 
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


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

  SECTION 1.  Article 7.5 (commencing with Section 13550) is added to
Chapter 2 of Division 3 of the Insurance Code, to read:

      Article 7.5.  Insurance Payment  Interception 
 Intercept Program 


   13550.  In furtherance of the enforcement of child support
obligations in the state, and to enhance efforts to notify the
Department of Child Support Services when an obligor is owed an
insurance claim payment, this article establishes and authorizes the
Insurance Payment Intercept Program. 
   13552.  The department shall consult with the Department of Child
Support Services to develop a program requiring an insurer or a
self-insurer to notify the Department of Child Support Services of a
claim owed to an obligor. The department shall establish a procedure
identifying the types of claims that the commissioner, in his or her
discretion, determines to be properly subject to withholding to
satisfy a child support obligation. That procedure shall prescribe an
insurer's or self-insurer's reporting obligations necessary to
implement this article. The department shall incorporate into its
written guidance each of the procedures set forth in this section.
 
   13552.  (a) The Department of Child Support Services shall
facilitate a child support data match system using automated data
exchanges to the maximum extent feasible, through which an insurer or
self-insurer shall report, no later than 30 days prior to a claim
payout, the name, address, and, if known, date of birth and social
security number or other taxpayer identification number for each
claimant.
   (b) An insurer or self-insurer may provide the claim data required
pursuant to subdivision (a) by any of the following methods:
   (1) Submitting the required claim data maintained by the insurer
or self-insurer directly to the Department of Child Support Services
in hard copy or in an electronic medium.
   (2) Authorizing an insurance claim data collection organization,
to which the insurer or self-insurer subscribes and submits the
required claim data, to conduct a data match of all claimants who owe
past due support and to submit the required data for each claimant
to the Department of Child Support Services.
   (3) Receiving or accessing a data file from an insurance claim
data collection organization and conducting a data match of all
claimants who owe past due support and submitting the required data
for each claimant to the Department of Child Support Services.
   (c) An insurance claim data collection organization acting on
behalf of the Department of Child Support Services shall submit the
required data for each claimant to the Department of Child Support
Services. 
   13554.  For purposes of this article, the following terms have the
following meanings: 
   (a) (1) "Claim" means any of the following:  
   (A) Coverage for an open, unresolved, bodily injury claim that is
payable by an insurer or self-insurer to an individual, or to a third
party for the benefit of the individual, who is a resident of the
state for the following types of insurance:  
   (i) "Automobile liability coverage" has the meaning set forth in
Section 660.  
   (ii) "Homeowners' liability coverage" means coverage under a
policy of residential property insurance for the legal liability of a
natural person or persons for loss of, damage to, or injury to,
persons or property, but not including policies primarily insuring
risks arising from the conduct of a commercial or industrial
enterprise. "Residential property insurance" has the meaning set
forth in Section 10087.  
   (iii) "Commercial liability insurance coverage" means coverage
under a policy of commercial insurance for the legal liability of any
person for loss of, damage to, or injury to persons or property,
arising from the conduct of a commercial or industrial enterprise.
"Commercial insurance" has the meaning set forth in Section 675.5.
 
   (iv) "Liability insurance" has the meaning set forth in Section
108.  
   (v) "Workers' compensation coverage" means the coverage described
in Sections 4653, 4654, 4655, 4658, 4800, 4800.5, 4804.1, 4806, 4816,
and 4850 of the Labor Code.  
   (B) Claims for a beneficiary who is making a claim on a life
policy or annuity that was delivered to an individual or a group
policyholder.  
   (2) A "claim" does not include a liability policy that does not
pay for bodily injury, a claim for property damage or loss of use of
property, or a claim made against an accident or health insurance
policy, whether the policy is an expense incurred policy or an
indemnity policy.  
   (a) 
    (b)  "Insurer" means an organization organized for the
purpose of assuming the risk of loss under a contract of insurance or
reinsurance, and also includes any of the following organizations:
   (1) An admitted insurer.
   (2) A nonadmitted domestic insurer.
   (3) A nonadmitted foreign insurer.
   (4) A nonadmitted alien insurer. 
   (b) 
    (c)  "Obligor" means a person owing a duty of support.

   (c) "Self-insurer" means an individual public or private entity
that does not meet the definition of insurer in subdivision (a), but
that is authorized by this code or any other law to undertake to
indemnify itself against loss, damage, or liability arising from a
contingent or unknown event.  
   (d) "Self-insurer" means any entity that is self-insured for its
legal responsibility without the benefit of primary insurance,
through the use of a self-insured retention. This includes, but is
not limited to, any entity that directs handling of its claims
through a third party or as a result of a policy-buy-back,
cost-sharing agreement, or coverage-in-place agreement. 

   (d) 
    (e)  "Support" means a support obligation owing on
behalf of a child, spouse, or family, or an amount owing pursuant to
Section 17402 of the Family Code, and includes past due support or
arrearage when it exists. "Support," when used with reference to a
minor child or a child described in Section 3901 of the Family Code,
includes maintenance and education. 
   13556.  An insurer or self-insurer that reports information
pursuant to this article, or who acts in good faith to comply with
the rules or regulations implementing this article, is not liable for
those acts under any law to any person.  
   13556.  (a) An insurer or self-insurer, and its directors, agents,
employees, and insureds, and any insurance claim data collection
organization, and its agents and employees authorized by an insurer
to act on the insurer's behalf, that provide or attempt to provide
data pursuant to this article are not subject to civil liability
under law to any person or entity for alleged or actual damages that
occur as a result of providing or attempting to provide data pursuant
to this article.
   (b) Data obtained pursuant to this article may be used only for
the purpose of identifying child support obligors. If the Department
of Child Support Services does not match data obtained pursuant to
this article with a child support obligor, the department shall not
maintain that data and shall immediately destroy that data.
   (c) An insurance claim data collection organization, child support
data match program, insurer or self-insurer that provides, attempts
to provide, or in any way accesses data pursuant to this article
shall comply with all applicable state and federal laws for the
protection of the privacy and the security of that data, including,
but not limited to, the Insurance Information and Privacy Protection
Act (Chapter 1 (commencing with Section 791.01) of Part 2 of Division
1), the Information Practices Act of 1977 (Chapter 1 (commencing
with Section 1798.80) of Part 4 of Division 3 of Title 1.81 of the
Civil Code), and the federal Health Insurance Portability and
Accountability Act of 1996 (Public Law 104-191).
   13558.  Until January 1, 2019, the department may issue guidance
to an insurer or self-insurer regarding compliance with this article.
This guidance shall be exempt from the rulemaking provisions of the
Administrative Procedure Act (Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code).
Any guidance issued pursuant to this section shall remain effective
only until the earlier of January 1, 2019, or the effective date of
regulations implementing this article that are adopted by the
department pursuant to the Administrative Procedure Act. The
department shall consult with the Department of Child Support
Services when issuing guidance pursuant to this section. 
   13560.  An insurer or self-insurer who violates this article shall
be deemed to have failed to carry out its contract in good faith
within the meaning of subdivision (b) of Section 704.  
   13560.  If an insurer or self-insurer violates Section 13552, the
commissioner may, in his or her discretion, impose a fine not to
exceed one thousand dollars ($1,000) for each violation, and may
issue an order requiring the violator to comply with Section 13552.
 
   13561.  This article shall become operative July 1, 2016. 
   SEC. 2.    The Legislature finds and declares that
Section 1 of this act, which adds Section 13556 to the Insurance
Code, of public bodies or the writings of public officials and
agencies within the meaning of Section 3 of Article I of the
California Constitution. Pursuant to that constitutional provision,
the Legislature makes the following findings to demonstrate the
interest protected by this limitation and the need for protecting
that interest:   In order to protect the privacy of
insurance claimants and persons owed past-due support, it is
necessary that data obtained by the Department of   Child
Protective Services from insurers, self-insurers, and insurance claim
data collection organizations pursuant to this act be confidential.