(a) An insurer shall cooperate with the Department of Child Support Services to identify claimants who are also obligors who owe past-due child support and report those claimants to the Department of Child Support Services.

(b) An insurer shall identify and report a claimant to the Department of Child Support Services if the claim seeks an economic benefit for an obligor who owes past-due child support.

(1) An “economic benefit” under a life insurance policy, disability income insurance policy, or annuity means a payment totaling at least one thousand dollars ($1,000) in which an individual is paid as the payee or copayee for any of the following:

(A) A claim by a beneficiary under a life insurance policy.

(B) A payment of the cash surrender value of a life insurance policy or annuity.

(C) A payment to an annuitant.

(D) A payment from a disability income insurance policy.

(E) A loan against the cash value or surrender value of an insurance policy or annuity, including loans for premium payments.

(2) An “economic benefit” under a property and casualty insurance policy means a payment totaling at least one thousand dollars ($1,000) under a liability insurance policy or underinsured motorist policy issued by an insurance company authorized to do business in this state. An “economic benefit” under a property and casualty insurance policy does not include payments to replace or repair lost or damaged property.

(c) Notwithstanding subdivision (b), and except as provided in subdivision (h), a claimant with any of following economic benefits shall not be reported:

(1) Payments resulting from an accelerated death benefit.

(2) A claim for benefits assigned to be paid to a health care provider or facility for actual medical expenses owed by the insured that are not otherwise paid or reimbursed, or a payment made after the claimant provides proof of the amount actually paid by the claimant to a health care provider if the amount is at least as much as the insurance payment, but not any amounts billed but not paid.

(3) A claim for benefits to be paid under a limited benefit insurance policy that provides one of the following:

(A) Coverage for one or more specified diseases or illnesses.

(B) Dental or vision benefits.

(C) Hospital indemnity or other fixed indemnity coverage.

(D) Accident only coverage.

(4) A claim for benefits that are the result of a state of emergency, as defined in Section 8558 of the Government Code.

(5) A claim for benefits under a workers’ compensation policy, except as provided in Section 17510 of the Family Code and Section 138.5 of the Labor Code.

(d) An insurer in California subject to the requirements of this article shall identify and report a claimant to the Department of Child Support Services if either of the following apply:

(1) A payment is made to the owner of a life policy or annuity that was issued to the owner while residing or located in California.

(2) A beneficiary making a claim resides or is located in California.

(e) Withholding from a qualifying disability insurance payment made to an obligor who owes past-due child support shall be limited to 50 percent of the claim for benefits.

(f) (1) If an insurer identifies a claimant as an obligor who owes past-due child support and reports the claimant to the Department of Child Support Services, the Department of Child Support Services shall provide the insurer with either of the following to secure the payment of the amount of past-due child support:

(A) A notice of child support lien.

(B) An income-withholding order.

(2) Upon receiving notice from the Department of Child Support Services that a reported insurance claim is payable to an obligor with a child support delinquency, an insurer shall comply with the requirements of the notice.

(3) Notwithstanding paragraph (2), this section does not require an insurer to comply with a notice from the Department of Child Support Services on a reported insurance claim payable to an obligor with a child support delinquency if the notice is received after the insurer has paid the claim.

(g) For the purposes of this section, “insurer” includes a fraternal benefit society.

(h) This section does not prohibit an insurer from cooperating voluntarily with the Department of Child Support Services to identify claimants who are also obligors who owe past-due child support and report those claimants to the Department of Child Support Services.

(Amended by Stats. 2019, Ch. 201, Sec. 14. (AB 1813) Effective January 1, 2020. Operative January 1, 2020, pursuant to Section 13555.)