If an insurer, after a good faith effort to locate and deliver to a policyholder a Proposition 103 rebate ordered or negotiated pursuant to Section 1861.01 of the Insurance Code, determines that a policyholder cannot be located, all funds attributable to that rebate escheat to the state and shall be delivered to the Controller. The funds subject to escheat on or after July 1, 1997, shall be transferred by the Controller to the Department of Insurance for deposit in the Insurance Fund in the following amounts and for the following purposes:
§ 1523.Policyholder Entitled to Proposition 103 Rebate Not Located
Title 10. Unclaimed Property · Chapter 7. Unclaimed Property Law · Article 2. Escheat of Unclaimed Personal Property · Last amended 1998 · Last verified July 29, 2026
In one sentenceSection 1523 escheats a Proposition 103 auto insurance rebate to the state if the insurer makes a good-faith effort but cannot locate the policyholder, and directs the Controller to transfer those funds to the Department of Insurance for deposit in the Insurance Fund, applying set amounts to repaying a prior General Fund loan and to specific 1998-1999 expenditures.
Full Text of § 1523
(a) Up to the amount that will repay principal and interest on the General Fund loan authorized by Item 0845-001-0001 of the Budget Act of 1996 for expenditure as provided in Section 12936 of the Insurance Code.
(b) The sum of four million dollars ($4,000,000) for expenditure during the 1998-1999 fiscal year as provided in Section 12967 of the Insurance Code.
Plain-English Summary
Proposition 103 required insurers to rebate certain amounts to policyholders, and Section 1523 addresses what happens when an insurer cannot find the person owed that rebate. If, after a good-faith effort to locate and deliver a Proposition 103 rebate, the insurer determines the policyholder cannot be found, all funds tied to that rebate escheat to the state and must be delivered to the Controller.
What happens to those funds afterward is unusually specific compared to most of this chapter. Funds subject to escheat on or after July 1, 1997, get transferred by the Controller to the Department of Insurance for deposit into the Insurance Fund rather than staying in the Controller's general unclaimed-property accounts. The section then earmarks that money for two purposes: repaying principal and interest on a specific 1996 General Fund loan, and, up to four million dollars, funding specific expenditures during the 1998-1999 fiscal year, both tied to particular budget items the Legislature had already authorized.
Frequently Asked Questions
What happens to a Proposition 103 rebate if the insurer cannot find the policyholder?
After a good-faith effort to locate the policyholder fails, the rebate funds escheat to the state and are delivered to the Controller.
Do these escheated rebate funds go into the same accounts as other unclaimed property?
No. Section 1523 directs the Controller to transfer funds escheating on or after July 1, 1997, to the Department of Insurance for deposit in the Insurance Fund instead.
What is that money used for once it reaches the Insurance Fund?
Repaying a specific 1996 General Fund loan, and funding up to four million dollars in expenditures the Legislature authorized for the 1998-1999 fiscal year.
Amendment History
Amended by Stats. 1998, Ch. 963, Sec. 1. Effective September 29, 1998.
Source & verification. Section text is reproduced verbatim from
the Deering's California Codes Annotated / vLex. Enacted by the California Legislature.
Last verified July 29, 2026.
· Official source
Also known as: proposition 103 rebate unclaimed californiaauto insurance rebate escheat