GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1995

H	1 

HOUSE BILL 1280

Short Title:  Child Support Lien.	(Public)

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Sponsors: Representatives Culpepper, Hensley, R. Hunter, McCrary, Neely; and Warner.

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Referred to:  Insurance.

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May 22, 1996

A BILL TO BE ENTITLED
AN ACT TO MAKE CORRECTIONS TO THE STATUTES ESTABLISHING LIENS ON INSURANCE PROCEEDS TO SECURE CHILD SUPPORT.
The General Assembly of North Carolina enacts:
Section 1.  Chapter 44 of the General Statutes is amended by adding a new Article 8A entitled "Liens Upon Insurance Proceeds to Secure Child Support."
Sec. 2.  G.S. 44-49.1 is recodified as G.S. 44-48.1 in Article 8A of Chapter 44 of the General Statutes.
Sec. 3.  G.S. 44-48.1, as recodified by this act, reads as rewritten:
"§ 44-48.1.  (Effective July 1, 1996) Lien created for payment of past-due child support obligations.
(a)	In the event that the Department of Human Resources or any other obligee, as defined in G.S. 110-129, provides written notification to an insurance company authorized to issue policies of insurance pursuant to Chapter 58, except for accident and health insurance as defined in G.S. 58-7-15(3), that a claimant or beneficiary under a contract of insurance owes past-due child support and accompanies this information with a certified copy of the court order ordering support together with proof that the claimant or beneficiary is past due in meeting this obligation, there is created a lien upon any insurance proceeds in favor of the Department or obligee.  This section shall apply only in those instances in which there is a nonrecurring payment of a lump-sum amount equal to or in excess of three thousand dollars ($3,000) or periodic payments with an aggregate amount that equals or exceeds three thousand dollars ($3,000).
(b)	As used in this section, accident and health insurance does not include disability income insurance, but does include hospital, medical, or dental service corporation coverage and health maintenance organization coverage."
Sec. 4.  G.S. 44-50 reads as rewritten:
"§ 44-50.  Receiving person charged with duty of retaining funds for purpose stated; evidence; attorney's fees; charges.
(a)	Such a lien as provided for in G.S. 44-49 or G.S. 44-48.1 shall also attach upon all funds paid to any person in compensation for or settlement of the said injuries, whether in litigation or otherwise; and it shall be the duty of any person receiving the same before disbursement thereof to retain out of any recovery or any compensation so received a sufficient amount to pay the just and bona fide claims for such drugs, medical supplies, ambulance service and medical attention and/or hospital service, after having received and accepted notice thereof:  Provided, that evidence as to the amount of such charges shall be competent in the trial of any such action: Provided, further, that nothing herein contained shall be construed so as to interfere with any amount due for attorney's services:  Provided, further, that the lien hereinbefore provided for in G.S. 44-49 shall in no case, exclusive of attorneys' fees, exceed fifty percent (50%) of the amount of damages recovered.
(b)	A lien as provided for in G.S. 44-48.1 shall be subordinate to a lien provided for in G.S. 44-49."
Sec. 5.  This act becomes effective July 1, 1996.