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Bill to help collect billions owed in child support payments passes Assembly

News: 2018 Press Release

For Release: May 30, 2018
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Bill to help collect billions owed in child support payments passes Assembly
SACRAMENTO, Calif. — Insurance Commissioner Dave Jones announced today that a bill he's sponsoring to significantly increase payments for past due child support claims through a mandatory insurance payment intercept program passed the Assembly Floor on a bipartisan vote.

Assembly Bill 2802, authored by Assemblymember Laura Friedman, of Glendale, is designed to establish the Insurance Payment Intercept Program, which will require insurance companies to participate in a program matching individuals behind on child support payments with their insurance claims to verify any insurance payments are first used to pay past-due child support. The bill will likely lead to tens of millions in payments to parents.

Child support is critical income for eligible families. Unfortunately, most families are not receiving all of the support they are owed. In California alone, the total amount of unpaid child support is nearly $18 billion and over $116 billion in unpaid child support is due to families across the country.

"This is important legislation that can have a significant and positive impact on the daily lives of tens of thousands of children," said Commissioner Jones. "Billions of dollars in unpaid child support are owed to families across the state and similar programs have proven successful in several other states. AB 2802 provides one more tool for dealing effectively with an often overlooked problem."

In 2002, the Department of Child Support Services created a voluntary program in which insurers could participate in matching persons who receive insurance claim payments with child support obligors. Unfortunately, only a small number of companies in California are participating. In fiscal year 2016-2017, the California program only intercepted approximately $3.9 million, while the mandatory program in Texas intercepted $65 million.

When Texas began requiring mandatory participation in 2009, they saw an initial 184 percent increase in child support collections from insurance payments. California has the potential to realize similar success by joining the seven other states with successful mandatory programs: New Jersey, Oklahoma, Pennsylvania, Rhode Island, Massachusetts, Texas and Oregon.

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Media Note:

Led by Insurance Commissioner Ricardo Lara, the California Department of Insurance is the consumer protection agency for the nation's largest insurance marketplace and safeguards all of the state’s consumers by fairly regulating the insurance industry. Under the Commissioner’s direction, the Department uses its authority to protect Californians from insurance rates that are excessive, inadequate, or unfairly discriminatory, oversee insurer solvency to pay claims, set standards for agents and broker licensing, perform market conduct reviews of insurance companies, resolve consumer complaints, and investigate and prosecute insurance fraud. Consumers are urged to call 1-800-927-4357 with any questions or contact us at via webform or online chat. Non-media inquiries should be directed to the Consumer Hotline at 800-927-4357. Teletypewriter (TTY), please dial 800-482-4833.

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