California 2023 2023-2024 Regular Session

California Assembly Bill AB1950 Introduced / Bill

Filed 01/29/2024

                    CALIFORNIA LEGISLATURE 20232024 REGULAR SESSION Assembly Bill No. 1950Introduced by Assembly Member Wendy CarrilloJanuary 29, 2024 An act to amend Section 12928.7 of the Insurance Code, relating to insurance. LEGISLATIVE COUNSEL'S DIGESTAB 1950, as introduced, Wendy Carrillo. Insurance: restitution.Existing law generally regulates insurance and creates the Department of Insurance, headed by the Insurance Commissioner. Existing law authorizes the commissioner to bring a superior court action to enjoin a person who is violating or about to violate the Insurance Code. Existing law also authorizes the commissioner to apply to the clerk of the superior court for a judgment to enforce an order requiring a person to pay a monetary penalty or reimburse the department for costs incurred by the department in prosecuting the matter.Existing law authorizes the commissioner to order a respondent, if certain requirements are met, to provide restitution, as defined, for a loss arising from the respondents conduct. With a restitution order, and if facts and equity permit, existing law also authorizes the commissioner to issue an order of rescission enforceable on any person subject to the commissioners jurisdiction. This bill would make a technical, nonsubstantive change to these provisions.Digest Key Vote: MAJORITY  Appropriation: NO  Fiscal Committee: NO  Local Program: NO Bill TextThe people of the State of California do enact as follows:SECTION 1. Section 12928.7 of the Insurance Code is amended to read:12928.7. (a) The commissioner may order a respondent to provide restitution for a loss arising from the respondents conduct. If the facts and equity permit, with a restitution order, the commissioner may issue an order of rescission enforceable on any person subject to the commissioners jurisdiction.(b) A restitution order under this section shall meet all of the following requirements:(1) The respondent shall be subject to the commissioners jurisdiction.(2) The restitution order shall be ancillary to another proceeding authorized by this code in which the commissioner does both of the following:(A) Determines the respondent violated this code or the standards of conduct applicable to persons acting in the capacity the respondent was acting in or purporting to act in when the loss occurred.(B) Issues an order imposing a cease and desist order, an order for a monetary penalty, or another sanction with respect to the respondents conduct.(3) The restitution order shall cite the factual basis for the restitution order.(4) The restitution order shall state the persons, or classes of persons, who suffered a loss.(5) The restitution order shall state the amount to be paid or property to be returned as restitution.(c) A rescission or restitution order shall be subject to judicial review in the same manner and at the same time as the order to which it is ancillary.(d) A rescission or restitution order may be judicially enforced in an action brought by the commissioner, the Attorney General, a district attorney, a city attorney, or any person owed restitution pursuant to the order. In that action, the court may award attorneys fees and court costs to a prevailing plaintiff.(e) This section does not apply to an insurer authorized to transact business in this state or to a placement of insurance with an insurer that was in compliance with Section 1765.1 or 1765.2 at the time of the placement. This section does not apply to a person with respect to acts within the scope of a license issued under Chapter 5 (commencing with Section 1621), Chapter 5A (commencing with Section 1759), or Chapter 6 (commencing with Section 1760) of Part 2 if the person holds that license at the time of those acts or at the time an initial pleading seeking restitution is issued.(f) The commissioner may order a respondent who is ordered to provide restitution pursuant to this section to reimburse the commissioner for the commissioners costs of implementing and enforcing this section, including attorneys fees. The commissioner shall not credit any funds received from a respondent towards payment of a monetary penalty until restitution has been tendered to all persons to whom restitution is owed, or to the commissioner on their behalf, as required by a restitution order.(g) This section does not limit or restrict actions, remedies, or procedures otherwise available to the commissioner, the department, or any person pursuant to an administrative or civil action to enforce any law. It is not a defense in an administrative or civil action that the commissioner did not order a person to pay restitution.(h) This section does not expand, limit, or otherwise affect the commissioners authority to seek or to have sought restitution, refunds, or penalties against insurers, except as expressly provided.(i) As used in this section, restitution means the full amount that will compensate each person for their direct and indirect financial and nonfinancial losses proximately caused by the respondents violations.(j) Money received by the commissioner for distribution to persons as restitution pursuant to this section or Section 12928.6 or 12976 shall be deposited into the Insurance Fund.

 CALIFORNIA LEGISLATURE 20232024 REGULAR SESSION Assembly Bill No. 1950Introduced by Assembly Member Wendy CarrilloJanuary 29, 2024 An act to amend Section 12928.7 of the Insurance Code, relating to insurance. LEGISLATIVE COUNSEL'S DIGESTAB 1950, as introduced, Wendy Carrillo. Insurance: restitution.Existing law generally regulates insurance and creates the Department of Insurance, headed by the Insurance Commissioner. Existing law authorizes the commissioner to bring a superior court action to enjoin a person who is violating or about to violate the Insurance Code. Existing law also authorizes the commissioner to apply to the clerk of the superior court for a judgment to enforce an order requiring a person to pay a monetary penalty or reimburse the department for costs incurred by the department in prosecuting the matter.Existing law authorizes the commissioner to order a respondent, if certain requirements are met, to provide restitution, as defined, for a loss arising from the respondents conduct. With a restitution order, and if facts and equity permit, existing law also authorizes the commissioner to issue an order of rescission enforceable on any person subject to the commissioners jurisdiction. This bill would make a technical, nonsubstantive change to these provisions.Digest Key Vote: MAJORITY  Appropriation: NO  Fiscal Committee: NO  Local Program: NO 





 CALIFORNIA LEGISLATURE 20232024 REGULAR SESSION

 Assembly Bill 

No. 1950

Introduced by Assembly Member Wendy CarrilloJanuary 29, 2024

Introduced by Assembly Member Wendy Carrillo
January 29, 2024

 An act to amend Section 12928.7 of the Insurance Code, relating to insurance. 

LEGISLATIVE COUNSEL'S DIGEST

## LEGISLATIVE COUNSEL'S DIGEST

AB 1950, as introduced, Wendy Carrillo. Insurance: restitution.

Existing law generally regulates insurance and creates the Department of Insurance, headed by the Insurance Commissioner. Existing law authorizes the commissioner to bring a superior court action to enjoin a person who is violating or about to violate the Insurance Code. Existing law also authorizes the commissioner to apply to the clerk of the superior court for a judgment to enforce an order requiring a person to pay a monetary penalty or reimburse the department for costs incurred by the department in prosecuting the matter.Existing law authorizes the commissioner to order a respondent, if certain requirements are met, to provide restitution, as defined, for a loss arising from the respondents conduct. With a restitution order, and if facts and equity permit, existing law also authorizes the commissioner to issue an order of rescission enforceable on any person subject to the commissioners jurisdiction. This bill would make a technical, nonsubstantive change to these provisions.

Existing law generally regulates insurance and creates the Department of Insurance, headed by the Insurance Commissioner. Existing law authorizes the commissioner to bring a superior court action to enjoin a person who is violating or about to violate the Insurance Code. Existing law also authorizes the commissioner to apply to the clerk of the superior court for a judgment to enforce an order requiring a person to pay a monetary penalty or reimburse the department for costs incurred by the department in prosecuting the matter.

Existing law authorizes the commissioner to order a respondent, if certain requirements are met, to provide restitution, as defined, for a loss arising from the respondents conduct. With a restitution order, and if facts and equity permit, existing law also authorizes the commissioner to issue an order of rescission enforceable on any person subject to the commissioners jurisdiction. 

This bill would make a technical, nonsubstantive change to these provisions.

## Digest Key

## Bill Text

The people of the State of California do enact as follows:SECTION 1. Section 12928.7 of the Insurance Code is amended to read:12928.7. (a) The commissioner may order a respondent to provide restitution for a loss arising from the respondents conduct. If the facts and equity permit, with a restitution order, the commissioner may issue an order of rescission enforceable on any person subject to the commissioners jurisdiction.(b) A restitution order under this section shall meet all of the following requirements:(1) The respondent shall be subject to the commissioners jurisdiction.(2) The restitution order shall be ancillary to another proceeding authorized by this code in which the commissioner does both of the following:(A) Determines the respondent violated this code or the standards of conduct applicable to persons acting in the capacity the respondent was acting in or purporting to act in when the loss occurred.(B) Issues an order imposing a cease and desist order, an order for a monetary penalty, or another sanction with respect to the respondents conduct.(3) The restitution order shall cite the factual basis for the restitution order.(4) The restitution order shall state the persons, or classes of persons, who suffered a loss.(5) The restitution order shall state the amount to be paid or property to be returned as restitution.(c) A rescission or restitution order shall be subject to judicial review in the same manner and at the same time as the order to which it is ancillary.(d) A rescission or restitution order may be judicially enforced in an action brought by the commissioner, the Attorney General, a district attorney, a city attorney, or any person owed restitution pursuant to the order. In that action, the court may award attorneys fees and court costs to a prevailing plaintiff.(e) This section does not apply to an insurer authorized to transact business in this state or to a placement of insurance with an insurer that was in compliance with Section 1765.1 or 1765.2 at the time of the placement. This section does not apply to a person with respect to acts within the scope of a license issued under Chapter 5 (commencing with Section 1621), Chapter 5A (commencing with Section 1759), or Chapter 6 (commencing with Section 1760) of Part 2 if the person holds that license at the time of those acts or at the time an initial pleading seeking restitution is issued.(f) The commissioner may order a respondent who is ordered to provide restitution pursuant to this section to reimburse the commissioner for the commissioners costs of implementing and enforcing this section, including attorneys fees. The commissioner shall not credit any funds received from a respondent towards payment of a monetary penalty until restitution has been tendered to all persons to whom restitution is owed, or to the commissioner on their behalf, as required by a restitution order.(g) This section does not limit or restrict actions, remedies, or procedures otherwise available to the commissioner, the department, or any person pursuant to an administrative or civil action to enforce any law. It is not a defense in an administrative or civil action that the commissioner did not order a person to pay restitution.(h) This section does not expand, limit, or otherwise affect the commissioners authority to seek or to have sought restitution, refunds, or penalties against insurers, except as expressly provided.(i) As used in this section, restitution means the full amount that will compensate each person for their direct and indirect financial and nonfinancial losses proximately caused by the respondents violations.(j) Money received by the commissioner for distribution to persons as restitution pursuant to this section or Section 12928.6 or 12976 shall be deposited into the Insurance Fund.

The people of the State of California do enact as follows:

## The people of the State of California do enact as follows:

SECTION 1. Section 12928.7 of the Insurance Code is amended to read:12928.7. (a) The commissioner may order a respondent to provide restitution for a loss arising from the respondents conduct. If the facts and equity permit, with a restitution order, the commissioner may issue an order of rescission enforceable on any person subject to the commissioners jurisdiction.(b) A restitution order under this section shall meet all of the following requirements:(1) The respondent shall be subject to the commissioners jurisdiction.(2) The restitution order shall be ancillary to another proceeding authorized by this code in which the commissioner does both of the following:(A) Determines the respondent violated this code or the standards of conduct applicable to persons acting in the capacity the respondent was acting in or purporting to act in when the loss occurred.(B) Issues an order imposing a cease and desist order, an order for a monetary penalty, or another sanction with respect to the respondents conduct.(3) The restitution order shall cite the factual basis for the restitution order.(4) The restitution order shall state the persons, or classes of persons, who suffered a loss.(5) The restitution order shall state the amount to be paid or property to be returned as restitution.(c) A rescission or restitution order shall be subject to judicial review in the same manner and at the same time as the order to which it is ancillary.(d) A rescission or restitution order may be judicially enforced in an action brought by the commissioner, the Attorney General, a district attorney, a city attorney, or any person owed restitution pursuant to the order. In that action, the court may award attorneys fees and court costs to a prevailing plaintiff.(e) This section does not apply to an insurer authorized to transact business in this state or to a placement of insurance with an insurer that was in compliance with Section 1765.1 or 1765.2 at the time of the placement. This section does not apply to a person with respect to acts within the scope of a license issued under Chapter 5 (commencing with Section 1621), Chapter 5A (commencing with Section 1759), or Chapter 6 (commencing with Section 1760) of Part 2 if the person holds that license at the time of those acts or at the time an initial pleading seeking restitution is issued.(f) The commissioner may order a respondent who is ordered to provide restitution pursuant to this section to reimburse the commissioner for the commissioners costs of implementing and enforcing this section, including attorneys fees. The commissioner shall not credit any funds received from a respondent towards payment of a monetary penalty until restitution has been tendered to all persons to whom restitution is owed, or to the commissioner on their behalf, as required by a restitution order.(g) This section does not limit or restrict actions, remedies, or procedures otherwise available to the commissioner, the department, or any person pursuant to an administrative or civil action to enforce any law. It is not a defense in an administrative or civil action that the commissioner did not order a person to pay restitution.(h) This section does not expand, limit, or otherwise affect the commissioners authority to seek or to have sought restitution, refunds, or penalties against insurers, except as expressly provided.(i) As used in this section, restitution means the full amount that will compensate each person for their direct and indirect financial and nonfinancial losses proximately caused by the respondents violations.(j) Money received by the commissioner for distribution to persons as restitution pursuant to this section or Section 12928.6 or 12976 shall be deposited into the Insurance Fund.

SECTION 1. Section 12928.7 of the Insurance Code is amended to read:

### SECTION 1.

12928.7. (a) The commissioner may order a respondent to provide restitution for a loss arising from the respondents conduct. If the facts and equity permit, with a restitution order, the commissioner may issue an order of rescission enforceable on any person subject to the commissioners jurisdiction.(b) A restitution order under this section shall meet all of the following requirements:(1) The respondent shall be subject to the commissioners jurisdiction.(2) The restitution order shall be ancillary to another proceeding authorized by this code in which the commissioner does both of the following:(A) Determines the respondent violated this code or the standards of conduct applicable to persons acting in the capacity the respondent was acting in or purporting to act in when the loss occurred.(B) Issues an order imposing a cease and desist order, an order for a monetary penalty, or another sanction with respect to the respondents conduct.(3) The restitution order shall cite the factual basis for the restitution order.(4) The restitution order shall state the persons, or classes of persons, who suffered a loss.(5) The restitution order shall state the amount to be paid or property to be returned as restitution.(c) A rescission or restitution order shall be subject to judicial review in the same manner and at the same time as the order to which it is ancillary.(d) A rescission or restitution order may be judicially enforced in an action brought by the commissioner, the Attorney General, a district attorney, a city attorney, or any person owed restitution pursuant to the order. In that action, the court may award attorneys fees and court costs to a prevailing plaintiff.(e) This section does not apply to an insurer authorized to transact business in this state or to a placement of insurance with an insurer that was in compliance with Section 1765.1 or 1765.2 at the time of the placement. This section does not apply to a person with respect to acts within the scope of a license issued under Chapter 5 (commencing with Section 1621), Chapter 5A (commencing with Section 1759), or Chapter 6 (commencing with Section 1760) of Part 2 if the person holds that license at the time of those acts or at the time an initial pleading seeking restitution is issued.(f) The commissioner may order a respondent who is ordered to provide restitution pursuant to this section to reimburse the commissioner for the commissioners costs of implementing and enforcing this section, including attorneys fees. The commissioner shall not credit any funds received from a respondent towards payment of a monetary penalty until restitution has been tendered to all persons to whom restitution is owed, or to the commissioner on their behalf, as required by a restitution order.(g) This section does not limit or restrict actions, remedies, or procedures otherwise available to the commissioner, the department, or any person pursuant to an administrative or civil action to enforce any law. It is not a defense in an administrative or civil action that the commissioner did not order a person to pay restitution.(h) This section does not expand, limit, or otherwise affect the commissioners authority to seek or to have sought restitution, refunds, or penalties against insurers, except as expressly provided.(i) As used in this section, restitution means the full amount that will compensate each person for their direct and indirect financial and nonfinancial losses proximately caused by the respondents violations.(j) Money received by the commissioner for distribution to persons as restitution pursuant to this section or Section 12928.6 or 12976 shall be deposited into the Insurance Fund.

12928.7. (a) The commissioner may order a respondent to provide restitution for a loss arising from the respondents conduct. If the facts and equity permit, with a restitution order, the commissioner may issue an order of rescission enforceable on any person subject to the commissioners jurisdiction.(b) A restitution order under this section shall meet all of the following requirements:(1) The respondent shall be subject to the commissioners jurisdiction.(2) The restitution order shall be ancillary to another proceeding authorized by this code in which the commissioner does both of the following:(A) Determines the respondent violated this code or the standards of conduct applicable to persons acting in the capacity the respondent was acting in or purporting to act in when the loss occurred.(B) Issues an order imposing a cease and desist order, an order for a monetary penalty, or another sanction with respect to the respondents conduct.(3) The restitution order shall cite the factual basis for the restitution order.(4) The restitution order shall state the persons, or classes of persons, who suffered a loss.(5) The restitution order shall state the amount to be paid or property to be returned as restitution.(c) A rescission or restitution order shall be subject to judicial review in the same manner and at the same time as the order to which it is ancillary.(d) A rescission or restitution order may be judicially enforced in an action brought by the commissioner, the Attorney General, a district attorney, a city attorney, or any person owed restitution pursuant to the order. In that action, the court may award attorneys fees and court costs to a prevailing plaintiff.(e) This section does not apply to an insurer authorized to transact business in this state or to a placement of insurance with an insurer that was in compliance with Section 1765.1 or 1765.2 at the time of the placement. This section does not apply to a person with respect to acts within the scope of a license issued under Chapter 5 (commencing with Section 1621), Chapter 5A (commencing with Section 1759), or Chapter 6 (commencing with Section 1760) of Part 2 if the person holds that license at the time of those acts or at the time an initial pleading seeking restitution is issued.(f) The commissioner may order a respondent who is ordered to provide restitution pursuant to this section to reimburse the commissioner for the commissioners costs of implementing and enforcing this section, including attorneys fees. The commissioner shall not credit any funds received from a respondent towards payment of a monetary penalty until restitution has been tendered to all persons to whom restitution is owed, or to the commissioner on their behalf, as required by a restitution order.(g) This section does not limit or restrict actions, remedies, or procedures otherwise available to the commissioner, the department, or any person pursuant to an administrative or civil action to enforce any law. It is not a defense in an administrative or civil action that the commissioner did not order a person to pay restitution.(h) This section does not expand, limit, or otherwise affect the commissioners authority to seek or to have sought restitution, refunds, or penalties against insurers, except as expressly provided.(i) As used in this section, restitution means the full amount that will compensate each person for their direct and indirect financial and nonfinancial losses proximately caused by the respondents violations.(j) Money received by the commissioner for distribution to persons as restitution pursuant to this section or Section 12928.6 or 12976 shall be deposited into the Insurance Fund.

12928.7. (a) The commissioner may order a respondent to provide restitution for a loss arising from the respondents conduct. If the facts and equity permit, with a restitution order, the commissioner may issue an order of rescission enforceable on any person subject to the commissioners jurisdiction.(b) A restitution order under this section shall meet all of the following requirements:(1) The respondent shall be subject to the commissioners jurisdiction.(2) The restitution order shall be ancillary to another proceeding authorized by this code in which the commissioner does both of the following:(A) Determines the respondent violated this code or the standards of conduct applicable to persons acting in the capacity the respondent was acting in or purporting to act in when the loss occurred.(B) Issues an order imposing a cease and desist order, an order for a monetary penalty, or another sanction with respect to the respondents conduct.(3) The restitution order shall cite the factual basis for the restitution order.(4) The restitution order shall state the persons, or classes of persons, who suffered a loss.(5) The restitution order shall state the amount to be paid or property to be returned as restitution.(c) A rescission or restitution order shall be subject to judicial review in the same manner and at the same time as the order to which it is ancillary.(d) A rescission or restitution order may be judicially enforced in an action brought by the commissioner, the Attorney General, a district attorney, a city attorney, or any person owed restitution pursuant to the order. In that action, the court may award attorneys fees and court costs to a prevailing plaintiff.(e) This section does not apply to an insurer authorized to transact business in this state or to a placement of insurance with an insurer that was in compliance with Section 1765.1 or 1765.2 at the time of the placement. This section does not apply to a person with respect to acts within the scope of a license issued under Chapter 5 (commencing with Section 1621), Chapter 5A (commencing with Section 1759), or Chapter 6 (commencing with Section 1760) of Part 2 if the person holds that license at the time of those acts or at the time an initial pleading seeking restitution is issued.(f) The commissioner may order a respondent who is ordered to provide restitution pursuant to this section to reimburse the commissioner for the commissioners costs of implementing and enforcing this section, including attorneys fees. The commissioner shall not credit any funds received from a respondent towards payment of a monetary penalty until restitution has been tendered to all persons to whom restitution is owed, or to the commissioner on their behalf, as required by a restitution order.(g) This section does not limit or restrict actions, remedies, or procedures otherwise available to the commissioner, the department, or any person pursuant to an administrative or civil action to enforce any law. It is not a defense in an administrative or civil action that the commissioner did not order a person to pay restitution.(h) This section does not expand, limit, or otherwise affect the commissioners authority to seek or to have sought restitution, refunds, or penalties against insurers, except as expressly provided.(i) As used in this section, restitution means the full amount that will compensate each person for their direct and indirect financial and nonfinancial losses proximately caused by the respondents violations.(j) Money received by the commissioner for distribution to persons as restitution pursuant to this section or Section 12928.6 or 12976 shall be deposited into the Insurance Fund.



12928.7. (a) The commissioner may order a respondent to provide restitution for a loss arising from the respondents conduct. If the facts and equity permit, with a restitution order, the commissioner may issue an order of rescission enforceable on any person subject to the commissioners jurisdiction.

(b) A restitution order under this section shall meet all of the following requirements:

(1) The respondent shall be subject to the commissioners jurisdiction.

(2) The restitution order shall be ancillary to another proceeding authorized by this code in which the commissioner does both of the following:

(A) Determines the respondent violated this code or the standards of conduct applicable to persons acting in the capacity the respondent was acting in or purporting to act in when the loss occurred.

(B) Issues an order imposing a cease and desist order, an order for a monetary penalty, or another sanction with respect to the respondents conduct.

(3) The restitution order shall cite the factual basis for the restitution order.

(4) The restitution order shall state the persons, or classes of persons, who suffered a loss.

(5) The restitution order shall state the amount to be paid or property to be returned as restitution.

(c) A rescission or restitution order shall be subject to judicial review in the same manner and at the same time as the order to which it is ancillary.

(d) A rescission or restitution order may be judicially enforced in an action brought by the commissioner, the Attorney General, a district attorney, a city attorney, or any person owed restitution pursuant to the order. In that action, the court may award attorneys fees and court costs to a prevailing plaintiff.

(e) This section does not apply to an insurer authorized to transact business in this state or to a placement of insurance with an insurer that was in compliance with Section 1765.1 or 1765.2 at the time of the placement. This section does not apply to a person with respect to acts within the scope of a license issued under Chapter 5 (commencing with Section 1621), Chapter 5A (commencing with Section 1759), or Chapter 6 (commencing with Section 1760) of Part 2 if the person holds that license at the time of those acts or at the time an initial pleading seeking restitution is issued.

(f) The commissioner may order a respondent who is ordered to provide restitution pursuant to this section to reimburse the commissioner for the commissioners costs of implementing and enforcing this section, including attorneys fees. The commissioner shall not credit any funds received from a respondent towards payment of a monetary penalty until restitution has been tendered to all persons to whom restitution is owed, or to the commissioner on their behalf, as required by a restitution order.

(g) This section does not limit or restrict actions, remedies, or procedures otherwise available to the commissioner, the department, or any person pursuant to an administrative or civil action to enforce any law. It is not a defense in an administrative or civil action that the commissioner did not order a person to pay restitution.

(h) This section does not expand, limit, or otherwise affect the commissioners authority to seek or to have sought restitution, refunds, or penalties against insurers, except as expressly provided.

(i) As used in this section, restitution means the full amount that will compensate each person for their direct and indirect financial and nonfinancial losses proximately caused by the respondents violations.

(j) Money received by the commissioner for distribution to persons as restitution pursuant to this section or Section 12928.6 or 12976 shall be deposited into the Insurance Fund.