CA Food & Agric Code Section 62186.1

(a)

The director may bring an action against a surety bond company if the company fails to do any of the following:

(1)

Acknowledge promptly and act reasonably upon receiving a bond demand from the director.

(2)

Promptly investigate and process claims.

(3)

Make fair and equitable settlement of claims.

(4)

Pay the bond amount to the director.

(b)

The authority provided in subdivision (a) is in addition to the authority provided for in subdivision (h) of Section 790.03 of the Insurance Code.

(c)

In addition to the bond proceeds, the surety bond company may be ordered to pay interest at the prevailing prime rate on the amounts owed from the date the claim was filed, all the department’s court costs, and reasonable attorney’s fees.