Bill Text: CA AB1734 | 2011-2012 | Regular Session | Amended
Bill Title: Insurance: Conservation and Liquidation Office.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2012-04-23 - Re-referred to Com. on JUD. [AB1734 Detail]
Download: California-2011-AB1734-Amended.html
BILL NUMBER: AB 1734 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 19, 2012
INTRODUCED BY Assembly Member Hagman
FEBRUARY 16, 2012
An act to add Section 1035.1 to the Insurance Code, relating to
insurance.
LEGISLATIVE COUNSEL'S DIGEST
AB 1734, as amended, Hagman. Insurance: Conservation and
Liquidation Office.
Existing law authorizes the Insurance Commissioner to petition the
superior court of the county in which an insurer has its principal
office for an order vesting title of all assets of that insurer in
the commissioner, in his or her official capacity, under specified
circumstances. Upon taking possession of the property and business,
the commissioner is authorized to act, except as specified, as either
conservator or liquidator. Existing law provides that there is
associated with the Department of Insurance a Conservation and
Liquidation Office with certain duties and obligations.
This bill would require the Insurance Commissioner, through
the Conservation and Liquidation Office , to
develop a report and publish corporate
of allowed claims on a quarterly basis through a
public filing with the court in which an insurer's liquidation
proceeding is pending for corporations, limited
liability companies, limited liability partnerships, and partnerships
. The bill would require the office to contact the claimants
whose claims have been allowed, as provided. The bill would require
the receiver, the Insurance Commissioner, or the Conservation and
Liquidation Office, as applicable, upon receipt of notice that an
allowed claim has been assigned to another party, to take specified
actions within 30 days , including changing the payee
designation to reflect the claim purchaser . The bill would
prohibit the office from accepting a claim assignment request 30 days
or less before distribution of the claim or 60 days after the claim
distribution has been made, and would allow the office to charge a
fee to the party requesting the reassignment of the claim to cover
the reasonable costs of administering the reassignment, not to exceed
$250. The bill would also provide that the office be held harmless
from and indemnified against any harm or economic loss suffered by
the claim purchaser due to misrepresentation by the assignor.
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. Section 1035.1 is added to the Insurance Code, to read:
1035.1. (a) The commissioner, through the Conservation
and Liquidation Office shall, on a quarterly basis, develop a
report and publish all corporate claims allowed in a
proceeding under this article. The reporting and publication shall be
made through a public filing with the court in which the liquidation
proceeding is pending of allowed claims for
corporations, limited liability companies, limited
liability partnerships, and partnerships . The report
shall include the name and address of the claimant and the amount of
the allowed claim. The commissioner shall, upon receipt of a written
request, provide this report to any bona fide investment company
seeking to purchase claims. Claims covered by the California
Insurance Guarantee Association or the California Life and
Health Insurance Guarantee Association that are worth less than
five hundred thousand dollars ($500,000) and claims that relate to
workers' compensation shall not be reported and published
included in the report .
(b) After a claim has been allowed in a proceeding under this
article, the Conservation and Liquidation Office shall contact the
claimant via a written notice of determination that shall include a
best time estimate as to when a distribution will be made on
the claim statement of the average time from when a
claim is allowed to when a claim is paid in the liquidation process
. The notice shall provide an opt-out clause to the reporting
and publication process described in subdivision
(a), with instructions for exercising that clause for those
corporations , limited liability companies, limited liability
partnerships, and partnerships that choose not to have their
allowed claims reported and published . A
corporation that chooses to opt-out opt out
of the reporting and publication process may
retract that decision at any time and thereafter have the claim
information reported and published pursuant to
subdivision (a).
(c) Upon receipt of notice that a claim, allowed in a proceeding
under this article, has been assigned to another party, the receiver,
the commissioner, or the Conservation and Liquidation Office, as
applicable, shall, within 30 days, change the payee designation to
reflect the claim purchaser, request further information relating to
the claim assignment request, or reject the claim.
(d) The Conservation and Liquidation Office shall not accept a
claim assignment request 30 days or less before distribution of the
claim or 60 days after the claim distribution has been made.
(e) The claim purchaser shall be responsible for ensuring that the
assignor from whom it purchases the claim has the legal authority to
assign the claim. The Conservation and Liquidation Office shall be
held harmless from and indemnified against any harm or economic loss
suffered by the claim purchaser due to misrepresentation by the
assignor.
(f) The office may charge a fee to the party requesting
reassignment of the claim for the processing of the reassignment. The
fee shall be in an amount not to exceed the reasonable costs of
administering the reassignment, and in no case shall the fee exceed
two hundred fifty dollars ($250).
