California Assembly Bill AB1004 Latest Draft

 BILL NUMBER: AB 1004AMENDED BILL TEXT AMENDED IN ASSEMBLY MARCH 31, 2011 INTRODUCED BY Assembly Member Hagman FEBRUARY 18, 2011 An act to  amend Section 105 of   add Section 1035.1 to  the Insurance Code, relating to insurance. LEGISLATIVE COUNSEL'S DIGEST AB 1004, as amended, Hagman. Insurance  : Conservation and Liquidation Office: receivership  .  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 Conservation and Liquidation Office to report and publish all specified claims on a quarterly basis through a public filing with the court in which an insurer's liquidation proceeding is pending. The bill would require the office to contact the claimants whose claims have been allowed, as provided. The bill would also require the receiver, the Commissioner, or the Conservation and Liquidation Office, as applicable, upon receipt of notice that an allowed claim has been assigned to another party, to process that claim within 21 days.   Existing law defines surety insurance to include, among other things, guaranteeing of behavior of persons and the guaranteeing of performance of contracts other than insurance policies and other than for payments secured by a mortgage, deed of trust, or other instrument constituting a lien or charge on real estate.   This bill would make technical, nonsubstantive changes to those provisions.  Vote: majority. Appropriation: no. Fiscal committee:  no   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 Conservation and Liquidation Office shall report and publish all claims allowed in a proceeding under this article on a quarterly basis. The reporting and publication shall be made through a public filing with the court in which the liquidation proceeding is pending. (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. 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 individuals or organizations that choose not to have their allowed claims reported and published. Any individual or organization that chooses to opt-out of the reporting and publication may retract that decision at any time and thereafter have his or her 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 process the claim within 21 days.   SECTION 1.   Section 105 of the Insurance Code is amended to read: 105. Surety insurance includes: (a) The guaranteeing of behavior of persons and the guaranteeing of performance of contracts, includingexecuting or guaranteeing bonds and undertakings required or permitted in all actions or proceedings or by law allowed, other than insurance policies and other than for payments secured by a mortgage, deed of trust, or other instrument constituting a lien or charge on real estate. (b) Insurance against loss resulting from the forgery or alteration of any instrument of any kind or character or of any signature thereon. Nothing in this section shall be deemed to limit any of the powers of title insurers. (c) Any of the following insurance when included as a part of contract containing any guarantee of behavior or performance or in a contract indemnifying any bank, banker, broker, financial, or moneyed corporation or association, any state, political subdivision, public, or municipal corporation, or any officer of any state, political subdivision, public, or municipal corporation: Insurance indemnifying the insured named therein against loss or destruction from any cause of any evidences of debt of any kind or character, evidences of ownership of any kind or character, deeds, mortgages, warehouse receipts, bills of lading, certificates of stock, bonds, notes, drafts, checks, instruments of similar character, stamps, documents, money, precious metals of any kind or character, refined or unrefined, and articles made therefrom, jewelry, watches, necklaces, bracelets, gems, and precious and semiprecious stones, and also against loss or damage, except by fire, to the insured's premises, furnishings, fixtures, equipment, safes, and vaults therein caused by burglary, robbery, holdup, theft, or larceny or an attempt thereat. Insurance indemnifying against loss of any property as specified herein shall not indemnify against loss of any property occurring while in the mail or in the exclusive custody or possession of a common carrier for the purpose of transportation, except for the purpose of transportation by an armored motor vehicle. (d) Insurance may not be written as surety insurance if it falls within the definition of financial guaranty insurance as set forth in Section 12100.