Notice to Insurance Companies to Protect Insurance Beneficiary Interests
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When any dissolution of marriage, legal separation, or annulment case is filed in California, a Summons is issued. The Summons form directs a defendant (or Respondent in Family Law) that a case has been filed against them and they are required to file a Response within 30 days. In family law cases, the Summons also contains some extremely important directives to both parties, which include a prohibition from taking children outside state lines without a court order or written permission from the other parent, a prohibition from changing estate planning documents (without first meeting certain criteria), a prohibition from changing the form of assets and taking out certain debts, and a prohibition from cancelling or changing life, health, disability or other insurance policies.
This page deals with the ATRO that prohibits the changing or cancelling of insurance policies.
Although the Automatic Temporary Restraining Orders strictly prohibit either party in a divorce or legal separation case from changing or cancelling insurance policy account information, including beneficiaries, it happens all the time. We estimate that one party will violate one of the ATRO mandates in approximately 20% of all cases.
What happens if my spouse cancels or changes an insurance policy in violation of the ATROs?
If your spouse cancels, modifies, alters or otherwise changes an insurance policy in violation of the ATROs, you have several options. First, you will want to appear ex parte for an emergency hearing to request that the court order the other party to reinstate the policy or obtain a new policy with the same coverage as you had before the cancellation or change. In nearly all circumstances, the court will grant this order and will not be pleased with the other party. Appearing ex parte can be difficult and somewhat time consuming and it is helpful to have an attorney familiar with the process help you. Second, you may consider filing a contempt action against the other party.
Protecting against wilful violations of Insurance ATROs
It is important to know how to handle a situation where one party violates an automatic temporary order, and to also understand the mechanisms available to protect against these violations. With insurance policies, the California Family Code provides an excellent way to help avoid a situation where your spouse cancels or changes a health insurance policy, life insurance policy, or disability insurance policy. In short, the Code allows a party or family law attorney to send a written notice to the Insurance carrier notifying them of the existence of the case and a directive not to allow either party to change, alter, or cancel a policy without a court order or written consent. This notice can be sent even before the Respondent even receives notice that the case is filed.
California Family Code 2050 states,
Upon filing of the petition, or at any time during the proceeding, a party may transmit to, or the court may order transmittal to, a health, life, or disability insurance carrier or plan the following notice in substantially the following form:
“YOU ARE HEREBY NOTIFIED, PURSUANT TO A PENDING PROCEEDING, IN RE MARRIAGE OF ____, CASE NUMBER ____, FILED IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA, COUNTY OF ____, THAT OWNERSHIP OF, OR BENEFITS PAYABLE UNDER, A POLICY OF HEALTH, LIFE, OR DISABILITY INSURANCE WHICH YOU HAVE ISSUED TO ONE OF THE PARTIES TO THIS PROCEEDING, POLICY NO. ____, IS AT ISSUE OR MAY BE AT ISSUE IN THE PROCEEDING.
YOU ARE HEREBY INSTRUCTED TO MAINTAIN THE NAMED BENEFICIARIES OR COVERED DEPENDENTS UNDER THE POLICY, UNLESS THE TERMS OF THE POLICY OR OTHER PROVISIONS OF LAW REQUIRE OTHERWISE, OR UNTIL RECEIPT OF A COURT ORDER, JUDGMENT, OR STIPULATION BETWEEN THE PARTIES PROVIDING OTHER INSTRUCTIONS.
YOU ARE FURTHER INSTRUCTED TO SEND NOTICE TO THE NAMED BENEFICIARIES, COVERED DEPENDENTS, OR OTHER SPECIFIED PERSONS UPON CANCELLATION, LAPSE, OR CHANGE OF THE COVERAGE, OR CHANGE OF DESIGNATED BENEFICIARIES UNDER THE POLICY.”
This written directive to the insurance company puts the carrier on notice of the pendency of the case and if changes are made by the other party in violation of this directive, the insurance company could be liable to you. In preparation of sending notices like the one above to life, health and/or disability insurance companies, it is necessary that you have the following information to give to your attorney:
- The name and contact information for the insurance carrier (including, if possible, the address where the insurance carrier is to receive “legal notices”);
- The account number(s);
- The names of all persons listed on the policy as an owner, beneficiary or covered persons, as well as their Social Security Numbers.
For more information about Automatic Temporary Restraining Orders (ATROs) listed on the back of the Summons form, please click here. To schedule a free consultation with Brian Mullen in our Irvine office, click here.