This bill establishes a child support lien against the net proceeds of various financial awards, including life insurance policies, annuities, and workers' compensation settlements, ensuring that outstanding child support obligations are prioritized during the distribution of these funds. It mandates that insurers conduct searches for child support judgments before distributing any proceeds exceeding $2,000, with the lien taking precedence over other claims, except for unpaid state income taxes. The bill clarifies the definition of "net proceeds" and outlines the responsibilities of attorneys, insurance companies, and agents in conducting judgment searches and certifying the status of beneficiaries regarding child support debts. If a beneficiary is identified as a child support judgment debtor, the proceeds will be withheld until the judgment is satisfied.

Additionally, the bill amends existing laws related to the proceeds of annuity contracts and life insurance policies, specifying that a lien will be placed on these proceeds when they become available if the beneficiary is a child support judgment debtor. It includes provisions for the distribution of funds in cases involving minor beneficiaries or the absence of attorneys, while also protecting attorneys and insurers from liability when acting in accordance with certification results. The bill mandates that insurance companies conduct child support judgment searches before distributing proceeds and limits the liability of these companies when satisfying judgments. The Commissioner of Banking and Insurance is tasked with adopting necessary regulations to implement the act.

Statutes affected:
Introduced: 2A:17-56.23