Insurance Code
Part 13 of 23 · provisions 2,401–2,600
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This section defines “underwriters’ corps” for this chapter. This chapter must not impair or interfere with the powers or duties of a municipality’s regular fire department. An owner of property cannot treat an underwriters’ corps act as a justification for abandoning the property. Certain domestic insurance-underwriter corporations may maintain an underwriter’s corps at their own expense if they meet the stated fire-prevention and local-business conditions. An underwriter’s corps may enter certain burning or fire-exposed buildings and may remove or protect property from fire or water damage while a fire is happening and immediately after.
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- 12763. Verify source ↗
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 7. HOME PROTECTION [12740 - 12764] ( Part 7 added by Stats. 1978, Ch. 1203. ) ## CHAPTER 3. Other Provisions [12760 - 12764] ( Chapter 3 added by Stats. 1978, Ch. 1203. )
A home protection contract cannot be issued or delivered until a copy of its form is filed with the commissioner.
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 7. HOME PROTECTION [12740 - 12764] ( Part 7 added by Stats. 1978, Ch. 1203. ) ## CHAPTER 3. Other Provisions [12760 - 12764] ( Chapter 3 added by Stats. 1978, Ch. 1203. ) ## 12763. No home protection contract shall be issued or delivered until a copy of the form thereof is filed with the commissioner. The commissioner may charge a fee for the filing, which fee shall be established by regulation adopted pursuant to Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. (Amended by Stats. 1985, Ch. 106, Sec. 104.) - 12764. Verify source ↗
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 7. HOME PROTECTION [12740 - 12764] ( Part 7 added by Stats. 1978, Ch. 1203. ) ## CHAPTER 3. Other Provisions [12760 - 12764] ( Chapter 3 added by Stats. 1978, Ch. 1203. )
A home protection contract cannot be cancelled during its initial term, except in specified situations.
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 7. HOME PROTECTION [12740 - 12764] ( Part 7 added by Stats. 1978, Ch. 1203. ) ## CHAPTER 3. Other Provisions [12760 - 12764] ( Chapter 3 added by Stats. 1978, Ch. 1203. ) ## 12764. (a) Any home protection contract shall be noncancellable during the initial term for which it was issued, except for: (1) Nonpayment of protection contract fees; (2) Fraud or misrepresentation of facts material to the issuance of such contract; or (3) Contracts providing coverage prior to the time that an interest in the residential property to which it attaches is sold, upon the contingency that such sale does not occur. (b) Nothing in this section establishes a right of the contract holder to renewal of any contract. (Amended by Stats. 1981, Ch. 820, Sec. 15.) - 128. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1.5. Risk Retention [125 - 140] ( Chapter 1.5 added by Stats. 1990, Ch. 1521, Sec. 1. )
This section states the chapter’s purposes: to regulate and promote risk retention groups and purchasing groups, and to authorize a group for directors and officers in the same line of business.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1.5. Risk Retention [125 - 140] ( Chapter 1.5 added by Stats. 1990, Ch. 1521, Sec. 1. ) ## 128. The purposes of this chapter are as follows: (a) To regulate the formation and operation of risk retention groups and purchasing groups in this state formed pursuant to the federal Liability Risk Retention Act of 1986, to the extent permitted by that law. (b) To promote the formation and operation of risk retention groups and purchasing groups in this state. Californians who are experiencing difficulty in obtaining liability coverage are encouraged to form and operate risk retention and purchasing groups in this state. (c) To authorize the formation of a risk retention group for directors and officers of corporations, whether for profit or nonprofit, who are engaged in the same line of business with respect to the liability risks faced by those officers and directors within the meaning of the federal Liability Risk Retention Act of 1986. (Added by Stats. 1990, Ch. 1521, Sec. 1.) - 1280. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [1280 - 1284] ( Article 1 enacted by Stats. 1935, Ch. 145. )
This chapter does not change the rights, duties, or obligations of members or subscribers of a reciprocal or interinsurance exchange that was already found insolvent and ordered liquidated before this code takes effect.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [1280 - 1284] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 1280. This chapter shall not in any way affect the rights, duties, or obligations of members of or subscribers at any reciprocal or interinsurance exchange which has been adjudged insolvent and ordered to be liquidated prior to the date this code takes effect. All such rights, duties, or obligations shall be governed by the law applicable thereto prior to such date. (Enacted by Stats. 1935, Ch. 145.) - 1280.5. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [1280 - 1284] ( Article 1 enacted by Stats. 1935, Ch. 145. )
This section exempts certain nonprofit-cooperative crop insurance and interinsurance contracts from this chapter and the rest of the code.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [1280 - 1284] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 1280.5. This chapter and the other provisions of this code shall not apply to nor affect unincorporated interindemnity or reciprocal or interinsurance contracts between members of, or persons marketing their products through, nonprofit cooperative marketing associations organized and operating under Chapter 4 (commencing with Section 11701) of Division 6 of the Food and Agricultural Code which indemnify solely in respect to losses to those members or persons from damage to, or destruction of, crops in process of handling or marketing, or facilities at a fixed location for processing, handling or marketing the crops, and which do not collect in advance of loss moneys other than for necessary expense of administration. (Amended by Stats. 1982, Ch. 454, Sec. 101.) - 1280.7. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [1280 - 1284] ( Article 1 enacted by Stats. 1935, Ch. 145. )
This section sets rules for certain reciprocal interindemnity arrangements for California-licensed physicians, including when they may operate, how the trust fund is managed, what disclosures are required, and how members are assessed or terminated.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [1280 - 1284] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 1280.7. (a) This chapter and the other provisions of this code, except as set forth in this paragraph, shall not apply to or affect unincorporated interindemnity or reciprocal or interinsurance contracts between members of a cooperative corporation, organized and operating under Part 2 (commencing with Section 12200) of Division 3 of Title 1 of the Corporations Code, whose members consist solely of physicians and surgeons licensed in California, which contracts indemnify solely in respect to medical malpractice claims against those members, and which do not collect in advance of loss any moneys other than contributions by each member to a collective reserve trust fund or for necessary expenses of administration. However, interindemnity, reciprocal, or interinsurance contracts with respect to the following types of claims, in addition to medical malpractice claims, may be entered into in conjunction with contracts with respect to medical malpractice claims if the reserve trust fund is at least twenty million dollars ($20,000,000): (1) Bodily injury or property damage arising out of the conduct and of the operations of the member’s professional practice occurring on the member’s premises. (2) Officers’, directors’, and administrators’ liability, to the extent that the member’s professional practice is operated as a professional corporation or group. (3) Nonowned automobile coverage. The provisions of Chapter 3 (commencing with Section 330) of Part 1 of Division 1 shall apply to unincorporated interindemnity or reciprocal or interinsurance contracts. Those unincorporated interindemnity or reciprocal or interinsurance contracts shall comply with all of the following requirements: (b) Each participating member shall enter into and, concurrently therewith, receive an executed copy of a trust agreement, which shall govern the collection and disposition of all funds of the interindemnity arrangement. The trust agreement shall, at a minimum, contain provision for all the following matters: (1) An initial trust corpus of not less than ten million dollars ($10,000,000), which corpus shall be a trust fund to secure enforcement of the interindemnity arrangement. The average contribution to the initial trust corpus shall be not less than twenty thousand dollars ($20,000) per member participating in the interindemnity arrangement. The average contribution to the trust fund shall continue at all times to be not less than twenty thousand dollars ($20,000) per participating member unless the interindemnity arrangement is qualified to admit members under the terms of subdivision (k). No such interindemnity arrangement shall become operative until the requisite minimum reserve trust fund has been established by contributions from not fewer than 500 participating members. (2) The reserve trust fund created by the trust agreement shall be administered by a board of trustees of three or more members, all of whom shall be physicians and surgeons licensed in California, participating members in the interindemnity arrangement, and elected biennially or more frequently by at least a majority of all members participating in the interindemnity arrangement. (3) The members of the board of trustees are fiduciaries and the board shall be the custodian of all funds of the interindemnity arrangement, and all those funds shall be deposited in the bank or banks and savings and loan associations in California as the board may designate. Each account shall require two or more signatories for withdrawal of funds in excess of ten thousand dollars ($10,000). The authorized signatories shall be appointed by the board and, as to any withdrawal in excess of one hundred thousand dollars ($100,000), at least one of the two or more authorized signatories shall be a physician and surgeon licensed in California and a participating member in the interindemnity arrangement. Each signatory on those accounts shall maintain, at all times while empowered to draw on those funds, for the benefit of the interindemnity arrangement, a bond against loss suffered through embezzlement, mysterious disappearance, holdup or burglary, or other loss issued by a bonding company licensed to do business in California in a penal sum of not less than one hundred thousand dollars ($100,000). (4) All funds held in trust that are in excess of current financial needs shall be invested and reinvested from time to time, under the direction of the board of trustees, in eligible securities, as defined in Section 16430 of the Government Code, in portfolios of eligible securities, in exchange traded financial futures contracts or exchange traded options contracts to hedge investment in those eligible securities, or in certificates of deposits or time deposits issued by banks and savings and loan associations in California duly insured by instrumentalities of the United States government. Pursuant to the authority contained in Section 1 of Article XV of the California Constitution, the restrictions upon rates of interest contained in Section 1 of Article XV of the California Constitution shall not apply to any obligations of, loans made by, or forbearances of, any trust established by a cooperative corporation providing indemnity pursuant to this section. (5) The income earned on the corpus of the trust fund shall be the source for the payment of the claims, costs, judgments, settlements, and costs of administration contemplated by the interindemnity arrangement, and to the extent the income is insufficient for those purposes, the board of trustees shall have the power and authority to assess participating members for all amounts necessary to meet the obligations of the interindemnity arrangement in accordance with the terms thereof. If necessary in the best interests of the interindemnity arrangement, the board of trustees may make assessments to increase the corpus of the trust fund in accordance with the terms of the interindemnity arrangement. Any assessment levied against a member shall be the personal obligation of the member. Any person who obtains a final judgment of recovery for medical malpractice or other liability authorized by this section against a member of the interindemnity arrangement shall have, in addition to any other remedy, the right to assert directly all rights to indemnification that the judgment debtor has under the interindemnity arrangement. The final judgment shall be a lien on the reserve trust fund to secure payment of the judgment, limited to the extent of the judgment debtor’s rights to indemnification. Any change in the assessment agreement between the interindemnity arrangement and its membership shall be submitted to the entire membership for ratification. If the ratification process is to be performed by ballot, a ballot shall be sent to each member by first-class mail, postage prepaid, or by electronic transmission. Within 45 days after the posted date on the ballot, each member who decides to vote on the assessment change shall return their mail or electronic ballot to the interindemnity arrangement for the tallying of the ballots. An affirmative vote of 75 percent of those voting shall be required to effectuate any change in the assessment agreement. If a change in the assessment agreement is to be submitted to members at a properly called meeting, the membership shall be notified of the meeting and the proposed assessment change by first-class mail, postage prepaid, or by electronic transmission at least 45 days prior to the meeting. Seventy-five percent of those present in person or by proxy at the meeting shall be required to effectuate any change in the assessment agreement. (6) Each participating member shall be covered by the interindemnity arrangement for not less than one million dollars ($1,000,000) for each occurrence of professional negligence or other liability authorized by this section, with the terms and conditions of the coverage to be specified in the trust agreement, except that the interindemnity arrangement may provide participating members with an aggregate limit for all payments on behalf of the member and may provide participating members with less than one million dollars ($1,000,000) of coverage for each occurrence of professional negligence or other liability authorized by this section if the interindemnity arrangement obtains for the benefit of the members reinsurance of excess limits coverage in an amount that when added to the coverage provided by the interindemnity arrangement would equal not less than one million dollars ($1,000,000) for each occurrence of professional negligence or other liability authorized by this section. Any change in the coverage provided by the trust agreement between the interindemnity arrangement and its membership shall be submitted to the entire membership for ratification. If the ratification process is to be performed by ballot, a ballot shall be sent to each member by first-class mail, postage prepaid, or by electronic transmission. Within 45 days after the posted date on the ballot, each member who decides to vote on the coverage change shall return their mail or electronic ballot to the interindemnity arrangement for the tallying of the ballot. An affirmative vote of 75 percent of those voting shall be required to effectuate any change in the coverage provided by the trust agreement, except that at least 50 percent of the entire membership must agree to any change. If any change is to be submitted to members at a properly called meeting, the membership shall be notified of the meeting and the proposed coverage change by first-class mail, postage prepaid, or by electronic transmission at least 45 days prior to the meeting. An affirmative vote of 75 percent of the membership present at the meeting, in person or by proxy, shall be required to effectuate any change, except that at least 50 percent of the entire membership must agree to any change. (7) Withdrawal of all, or any portion of, the corpus of the reserve trust fund shall be upon the written authorization signed by at least two-thirds of the members of the board of trustees. (8) The board of trustees shall cause both of the following to be furnished to each member participating in the interindemnity arrangement by first-class mail, postage prepaid, or by electronic transmission, and to be filed with the Commissioner of Financial Protection and Innovation: (A) Within 90 days after the end of each fiscal year, a statement of the assets and liabilities of the interindemnity arrangement as of the end of that year, a statement of the revenue and expenditures of the interindemnity arrangement, and a statement of the changes in corpus of the reserve trust for that year, in each case accompanied by a certificate signed by a firm of independent certified public accountants selected by the board of trustees indicating that the firm has conducted an audit of those statements in accordance with generally accepted auditing standards and indicating the results of the audit. (B) Within 45 days after the end of each of the first three quarterly periods of each fiscal year, a statement of the assets and liabilities of the interindemnity arrangement as of the end of the quarterly period, a statement of the revenue and expenditures of the interindemnity arrangement, and a statement of the changes in corpus of the reserve trust for the period, in each case accompanied by a certificate signed by a majority of the members of the board of trustees to the effect that the statements were prepared from the official books and records of the interindemnity arrangement. (C) In addition to the statements required to be filed pursuant to this paragraph, the board of trustees shall annually file with the Commissioner of Financial Protection and Innovation an authorization for disclosure to the commissioner of all financial records pertaining to the interindemnity arrangement. For the purpose of this subparagraph, the authorization for disclosure shall also include the financial records of any association, partnership, or corporation that has management or control of the funds or the operation of the interindemnity arrangement. (9) The trust agreement shall also provide for all the following: (A) In the event a participating member who is in full compliance with the trust agreement, including the payment of all outstanding dues and assessments, dies, the initial contribution made by the decedent shall be returned to the member’s estate or designated beneficiary; the indemnity coverage shall continue for the benefit of the decedent’s estate in respect of occurrences during the time the decedent was a participating member; and neither the person receiving the repayment of the initial contribution nor the decedent’s estate shall be responsible for any assessments levied following the death of the member. (B) A participating member who is then in full compliance with the trust agreement and who has reached the age of 65 years and who has retired completely from the practice of medicine may elect to retire from the interindemnity arrangement, in which case the member shall not be responsible for assessments levied following the date notice of retirement is given to the trust. Following that retirement, the indemnity coverage shall continue for the benefit of the member in respect of occurrences prior to the time the member retired from the interindemnity arrangement. That retired member’s initial contribution shall be repaid 10 years from the date the notice of retirement is received by the trust, or an earlier date as specified in the trust agreement. The board of trustees may reduce the age for retirement to not less than 55 years subject to all other requirements in this paragraph and any additional requirements deemed necessary by the board. (C) During any period in which a participating member, who is then in full compliance with the trust agreement, has, in the judgment of the board of trustees, become unable to perform any and every duty of their regular professional occupation, the participating member may request disability status in accordance with the terms of the interindemnity arrangement. During any period of disability status, the member shall not be responsible for assessments levied during the period and, if so provided in the interindemnity arrangement, all indemnity coverage, both as to defense and payment of claims, shall terminate as to occurrences arising out of the actions of the participating member during the period of disability status. (D) In the event a participating member fails to pay any assessment when due, the board of trustees may terminate that person’s membership status if the failure to pay is not cured within 30 days from the date the assessment was due. Upon that termination the former participating member shall not be entitled to the return of all or any part of their initial contribution, and the indemnity coverage shall thereupon terminate as to all claims then pending against that person and in respect to all occurrences prior to the date of that termination of membership. However, in the event the interindemnity arrangement is then providing legal defense services to that person, the interindemnity arrangement shall continue to provide those services for a period of 10 days following that termination. (E) In the event a participating member fails to comply with any provision of the trust agreement (other than a failure to pay assessments when due), the board of trustees may terminate that person’s membership status if the failure to comply is not cured within 60 days from the date the person is notified of the failure, provided that before that membership status may be terminated the person shall be given the right to call for a hearing before the board of trustees (to be held before the expiration of the 60-day period), at which hearing the person shall be given the opportunity to demonstrate to the board of trustees that no failure to comply has occurred or, if it has occurred, that it has been cured. Upon that termination, the former participating member shall not be entitled to the return of all or any part of their initial contribution, and the indemnity coverage shall thereupon terminate as to all claims then pending against the person and in respect to all occurrences prior to the date of the termination of membership. However, in the event the interindemnity arrangement is then providing legal defense services to that person, the interindemnity arrangement shall continue to provide those services for a period of 10 days following the termination. (F) A participating member who is then in full compliance with the trust agreement may elect voluntarily to terminate their membership in the interindemnity arrangement. Upon that voluntary termination, that person may further elect to cease being responsible for future assessments, or to continue to pay those assessments until the time as the person’s initial contribution is repaid. In the event the person elects to cease being responsible for future assessments, the indemnity coverage shall thereupon terminate and the person shall either be responsible for their own exposure for acts committed while a participating member in the interindemnity arrangement, or they may request the interindemnity arrangement to purchase or provide, at the cost of the person, coverage for that exposure. The initial contribution of the person shall be repaid on the 10th anniversary of the date the contribution was made. In the event the person elects to continue to be responsible for assessments, the indemnity coverage shall continue in respect of occurrences prior to the date of the voluntary termination, and the initial contribution of the person shall be repaid at the time as the board of trustees is satisfied that (i) there are no claims pending against the person in respect of occurrences during the time the person was a participating member, and (ii) the statute of limitations has run on all claims that might be asserted against that person in respect of occurrences during that time. In no event shall that repayment be made earlier than the 10th anniversary of the date the contribution was made. Any person whose membership in an interindemnity arrangement is involuntarily terminated for failure to pay assessments or who voluntarily terminates that membership and elects to be responsible for their own exposure for acts committed while a participating member, shall not be eligible to become a member of any other interindemnity arrangement for a period of five years after the termination unless, on the effective date of the act which amended this section during the 1985–86 Regular Session, the person had on file with the Department of Financial Protection and Innovation a copy of a subscription agreement signifying the person’s agreement to transfer membership or had paid a minimum of ten thousand dollars ($10,000) to another interindemnity arrangement that was granted a permit to organize prior to January 1, 1985. (G) The board of trustees shall have the right to terminate the membership of a participating member if the board of trustees determines that the termination is in the best interests of the interindemnity arrangement even though that person has complied with all of the provisions of the trust agreement. A termination may be effected only if at least two-thirds of the members of the board of trustees indicate in writing their decision to terminate. If the board of trustees proposes to terminate a member, the member shall have the right to call a special meeting of all participating members in accordance with the rules established by the board of trustees for the purpose of voting on whether or not the member shall be terminated. The member shall not be terminated if at least two-thirds of the participating members present, in person or by proxy, indicate that the member should not be terminated. In the event a member is terminated, the person shall elect either: (i) to request the return of their initial contribution, in which case the contribution shall be repaid and the indemnity coverage shall thereupon terminate as to all claims then pending against the person and in respect to all occurrences prior to the date of the termination of membership. However, in the event the interindemnity arrangement is then providing legal defense services to the person, the interindemnity arrangement shall continue to provide those services for a period of 30 days to enable the person to assume their own defense; or (ii) to release all rights to the return of the initial contribution, in which case the indemnity coverage shall continue for the benefit of the member in respect of occurrences during the time the person was a participating member and the person shall have no responsibility for assessments levied following that termination. The interindemnity arrangement may provide that if a member is terminated and fails to make the election set forth herein within 45 days of the date of notification of termination of membership, the participating member shall be deemed to have elected to release all rights to a return of their initial contribution, in which case indemnity coverage shall apply for the benefit of the member with respect to occurrences occurring prior to the termination. (10) Each member participating in the interindemnity arrangement shall have the right of access to, and the inspection of, the books and records of the interindemnity arrangement, which rights shall be similar to the corporate shareholders pursuant to Section 3003 of the Corporations Code, or, commencing January 1, 1977, Sections 1600 to 1605, inclusive, of the Corporations Code. (11) There shall be a meeting of all members participating in the interindemnity arrangement, at least annually, after not less than 10 days’ written notice has been given, at a location reasonably convenient to the participating members and on a date that is within a reasonable period of time following the distribution of the annual financial statements. (12) Notwithstanding Sections 12453 and 12703 of the Corporations Code, on any matter to be voted upon by the membership at either a regular or special meeting, a member shall have the right to vote in person or by written proxy filed with the corporate secretary prior to the meeting. No proxy shall be made irrevocable, nor be valid beyond the earliest of the following dates: (A) The date of expiration set forth in the proxy. (B) The date of termination of membership. (C) Eleven months from the date of execution of the proxy. (D) Such time as may be specified in the bylaws, not to exceed 11 months. (13) The interindemnity arrangement, and the reserve trust fund incident thereto, shall be subject to termination at any time by the vote or written consent of not less than three-fourths of the participating members. (c) The board of trustees shall cause to be recorded with the office of the county recorder of the county of the principal place of business of the interindemnity arrangement within 90 days following the end of each fiscal year, a written statement, executed by a majority of the board of trustees under penalty of perjury, reciting that each member participating in the interindemnity arrangement was mailed a copy of the annual financial statement and quarterly audit certificates by first-class mail, postage prepaid, required pursuant to paragraph (8) of subdivision (a). (d) Each person solicited to become a participating member in an interindemnity arrangement shall receive in writing, at least 48 hours prior to the execution by the prospective participating member of the trust agreement, and at least 48 hours prior to the payment by the prospective participating member of any consideration in connection with the interindemnity arrangement, the following information: (1) A copy of the articles of incorporation and bylaws of the cooperative corporation and a copy of the form of trust agreement to be executed by the prospective participating member. (2) A disclosure statement regarding the interindemnity arrangement. The disclosure statement shall contain on the first or cover page a legend in boldface type reading substantially as follows: “THE INTERINDEMNITY ARRANGEMENT CONTEMPLATED HEREIN PROVIDES THAT PARTICIPATING MEMBERS HAVE UNLIMITED PERSONAL LIABILITY FOR ASSESSMENTS THAT MAY BE LEVIED TO PAY FOR THE PROFESSIONAL NEGLIGENCE OR OTHER LIABILITY AUTHORIZED BY THIS SECTION. NO ASSURANCES CAN BE GIVEN REGARDING THE AMOUNT OR FREQUENCY OF ASSESSMENTS WHICH MAY BE LEVIED, OR THAT ALL PARTICIPATING MEMBERS WILL MAKE TIMELY PAYMENT OF THEIR ASSESSMENTS TO COVER THE PROFESSIONAL NEGLIGENCE OR OTHER LIABILITY AUTHORIZED BY THIS SECTION.” (3) The disclosure statement shall further contain all of the following information: (A) The amount, nature, and terms and conditions of the professional negligence or other liability relating to a member’s professional practice coverage available under the interindemnity arrangement. (B) The amount of the initial contribution required of each participating member and a statement of the minimum number of members and aggregate contributions required for the interindemnity arrangement to commence. (C) The names, addresses, and professional experience of each member of the board of trustees. (D) The requirements for admission as a participating member. (E) A statement of the services to be provided under the interindemnity arrangement to each participating member. (F) A statement regarding the obligation of each member to pay assessments and the consequences for failure to do so. (G) A statement of the rights and obligations of a participating member in the event the member dies, retires, becomes disabled, or terminates participation for any reason, or the interindemnity arrangement terminates for any reason. (H) A statement regarding the services to be provided, indicating whether these services will be delegated to others pursuant to a contractual arrangement. For those services delegated to others pursuant to a contractual arrangement, a statement fully disclosing and itemizing all consideration received directly or indirectly under the arrangement, and indicating what the consideration is for, and how, when, and to whom the consideration will be paid. (I) A statement of the voting rights of the members and the circumstances under which participation of a member may be terminated and under which the interindemnity arrangement may be terminated. (J) If any statement of estimated or projected financial information for the interindemnity arrangement is used, a statement of the estimation or projection and a summary of the data and assumptions upon which it is based. (4) A list with the names and addresses of current participating members of the interindemnity arrangement. (e) No officer, director, trustee, employee, or member of the interindemnity arrangement or the cooperative corporation shall receive, or be entitled to receive, any payment, bonus, salary, income, compensation, or other benefit whatsoever, either from the reserve trust fund or the income therefrom or from any other funds of the interindemnity arrangement or the members thereof based on the number of participating members, or the amount of the reserve trust fund or other funds of the interindemnity arrangement. (f) A peer review committee or committees shall be established by the trust agreement to review the qualifications of any physician and surgeon to participate or continue to participate in the interindemnity arrangement, and to review the quality of medical services rendered by any participating member, as well as the validity of medical malpractice claims made against participating members. Any physician and surgeon, prior to becoming a participating member of the interindemnity arrangement, shall be reviewed and approved by a majority of the members of the peer review committee. No peer review committee, or any of its members, shall be liable for any action taken by the committee in reviewing the qualifications of a physician and surgeon to participate or continue to participate, or the quality of medical services rendered, or the validity of a medical malpractice claim, unless it is alleged and proved that the action was taken with actual malice. (g) The following are hereby defined as unfair methods of competition and deceptive acts or practices with respect to cooperative corporations or interindemnity arrangements provided for in this section: (1) Making any false or misleading statement as to, or issuing, circulating, or causing to be made, issued, or circulated, any estimate, illustration, circular, or statement misrepresenting the terms of any interindemnity arrangement or the benefits or advantages promised thereby, or making any misleading representation or any misrepresentation as to the financial condition of the interindemnity arrangement, or making any misrepresentation to any participating member for the purpose of inducing or tending to induce the member to lapse, forfeit, or surrender their rights to indemnification under the interindemnity arrangement. It shall be a false or misleading statement to state or represent that a cooperative corporation or interindemnity arrangement is or constitutes “insurance” or an “insurance company” or an “insurance policy.” (2) Making or disseminating or causing to be made or disseminated before the public in this state, in any newspaper or other publication, or any advertising device, or by public outcry or proclamation, or in any other manner or means whatsoever, any statement containing any assertion, representation, or statement with respect to those cooperative corporations or interindemnity arrangements, or with respect to any person in the conduct of those cooperative corporations or interindemnity arrangements, which is untrue, deceptive, or misleading, and which is known, or which by the exercise of reasonable care should be known, to be untrue, deceptive, or misleading. It shall be a false or misleading statement to state or represent that a cooperative corporation or interindemnity arrangement is or constitutes “insurance” or an “insurance company” or an “insurance policy.” (3) Entering into any agreement to commit, or by any concerted action committing, any act of boycott, coercion, or intimidation resulting in or tending to result in an unreasonable restraint of, or monopoly in, those cooperative corporations or interindemnity arrangements. (4) Filing with any supervisory or other public official, or making, publishing, disseminating, circulating, or delivering to any person, or placing before the public, or causing directly or indirectly, to be made, published, disseminated, circulated, or delivered to any person, or placed before the public any false statement of financial condition of a cooperative corporation or interindemnity arrangement with intent to deceive. (5) Making any false entry in any book, report, or statement of a cooperative corporation or interindemnity arrangement with intent to deceive any agent or examiner lawfully appointed to examine into its condition or into any of its affairs, or any public official to whom a cooperative corporation or interindemnity arrangement is required by law to report, or who has authority by law to examine into its condition or into any of its affairs, or, with like intent, willfully omitting to make a true entry of any material fact pertaining to a cooperative corporation or interindemnity arrangement in any book, report, or statement of a cooperative corporation or interindemnity arrangement. (6) Making or disseminating, or causing to be made or disseminated, before the public in this state, in any newspaper or other publication, or any other advertising device, or by public outcry or proclamation, or in any other manner or means whatsoever, whether directly or by implication, any statement that a cooperative corporation or interindemnity arrangement is a member of the California Insurance Guarantee Association, or insured against insolvency as defined in Section 119.5. This paragraph shall not be interpreted to prohibit any activity of the California Insurance Guarantee Association or of the commissioner authorized, directly or by implication, by Article 14.2 (commencing with Section 1063) of Chapter 1. (7) Knowingly committing or performing with a frequency as to indicate a general business practice any of the following unfair claims settlement practices: (A) Misrepresenting to claimants pertinent facts or provisions relating to any coverage at issue. (B) Failing to acknowledge and act promptly upon communications with respect to claims arising under those interindemnity arrangements. (C) Failing to adopt and implement reasonable standards for the prompt investigation and processing of claims arising under those interindemnity arrangements. (D) Failing to affirm or deny coverage of claims within a reasonable time after proof of claim requirements have been completed and submitted by the participating member. (E) Not attempting in good faith to effectuate prompt, fair, and equitable settlements of claims in which liability has become reasonably clear. (F) Compelling participating members to institute litigation to recover amounts due under an interindemnity arrangement by offering substantially less than the amounts ultimately recovered in actions brought by those participating members when those participating members have made claims under those interindemnity arrangements for amounts reasonably similar to the amounts ultimately recovered. (G) Attempting to settle a claim by a participating member for less than the amount to which a reasonable person would have believed they were entitled by reference to written or printed advertising material accompanying or made part of an application for membership in an interindemnity arrangement. (H) Attempting to settle claims on the basis of an interindemnity arrangement that was altered without notice to the participating member. (I) Failing, after payment of a claim, to inform participating members, upon request by them, of the coverage under which payment has been made. (J) Making known to claimants a practice of the cooperative corporation or interindemnity arrangement of appealing from arbitration awards in favor of claimants for the purpose of compelling them to accept settlements or compromises less than the amount awarded in arbitration. (K) Delaying the investigation or payment of claims by requiring a claimant, or their physician, to submit a preliminary claim report, and then requiring the subsequent submission of formal proof of loss forms, both of which submissions contain substantially the same information. (L) Failing to settle claims promptly, where liability has become apparent, under one portion of an interindemnity arrangement in order to influence settlements under other portions of the interindemnity arrangement. (M) Failing to provide promptly a reasonable explanation of the basis relied on in the interindemnity arrangement, in relation to the facts of applicable law, for the denial of a claim or for the offer of a compromise settlement. (N) Directly advising a claimant not to obtain the services of an attorney. (O) Misleading a claimant as to the applicable statute of limitations. (h) Notwithstanding any contrary provisions of Part 2 (commencing with Section 12200) of Division 3 of Title 1 of the Corporations Code, it shall not be necessary to hold a meeting of members of the cooperative corporation for the purpose of electing directors if the bylaws provide the election may be held by first-class mail balloting or balloting by electronic transmission. First-class mail balloting or balloting by electronic transmission may also be used in conjunction with a meeting at which directors are to be elected and all mail and electronic ballots shall count toward establishing a quorum for the meeting for the limited purpose of the issues set forth in the mail and electronic ballot. Directors shall be elected as follows: (1) The candidates receiving the highest number of votes, up to the number of directors to be elected, by a specified date at least 45 days but not later than 60 days after the ballots are first mailed, postage prepaid, to the members (or the date of a meeting of members held in conjunction therewith) shall be elected. (2) In the event that no candidate receives a majority of the votes cast for a vacant office, a runoff election shall be held between the two candidates receiving the highest number of votes cast. The runoff election shall be held at least 45 days but not more than 60 days after the ballots for the election are mailed, postage prepaid. In the event that there is more than one office for which no candidate receives a majority of the votes cast, the candidates for the runoff shall be twice the number of vacant offices, and shall be those persons who received the highest number of votes therefor. A record of the mail and electronic ballots shall be kept on file for a period of three months after all vacant board positions have been filled, and shall be subject to inspection at any reasonable time by any members of the cooperative corporation. (i) No officer, director, trustee, or member of the interindemnity arrangement or the cooperative corporation, or any entity in which that person has a material financial interest, shall enter into or renew any transaction or contract with the trust unless the material facts as to the transaction or contract and as to the interest of the person are fully disclosed to the participating members, and the transaction or contract is approved by an affirmative vote of at least 75 percent of the membership present at a meeting, in person or by proxy. If any transaction or contract is to be submitted to members at a properly called meeting, the membership shall be notified of the meeting and of the transaction or contract by first-class mail, postage prepaid, or by electronic transmission at least 45 days prior to the meeting. (j) Services provided to the trust pursuant to a delegated contractual arrangement shall be embodied in a written contract. Each written contract shall provide for reasonable consideration to the parties. In addition, each written contract shall be disclosed annually to participating members in a disclosure report containing the information described in subparagraph (H) of paragraph (3) of subdivision (d). The disclosure report shall be sent to participating members by first-class mail, postage prepaid, or by electronic transmission, and shall be sent separately from any statements, records, or other documents. The disclosure requirements of this subdivision shall apply to all existing and future written contracts. (k) Upon request of the Commissioner of Financial Protection and Innovation, an interindemnity arrangement shall immediately forward to the commissioner a current list of participating members, including the names, addresses, and telephone numbers of those members. (l) Notwithstanding any provision to the contrary, whenever the membership of a cooperative organization, organized pursuant to Part 2 (commencing with Section 12200) of Division 3 of Title 1 of the Corporations Code and consisting solely of physicians and surgeons licensed in this state amounts to 2,000 or more members and the trust fund is at least forty million dollars ($40,000,000), which is available to the public for malpractice claims or other claims authorized by this section, the cooperative is authorized to admit members without a contribution to that trust fund if assessments are charged to each of those members within the first 50 months in an amount equal to the amount of the contribution to the reserve fund that would otherwise be required. (Amended by Stats. 2023, Ch. 204, Sec. 8. (AB 1140) Effective January 1, 2024.) - 12800. Verify source ↗
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 8. SERVICE CONTRACTS [12800 - 12865] ( Part 8 added by Stats. 2003, Ch. 439, Sec. 5. )
This section defines key terms for vehicle service contracts and says a provider must certify certain indemnity benefits as incidental when filing a specimen contract.
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 8. SERVICE CONTRACTS [12800 - 12865] ( Part 8 added by Stats. 2003, Ch. 439, Sec. 5. ) ## 12800. The following definitions apply for purposes of this part: (a) “Motor vehicle” means a self-propelled device operated solely or primarily upon land and may include both self-propelled motor homes or recreational vehicles, non-self-propelled camping and recreational trailers, off-road vehicles, and trailers designed to transport off-road vehicles. However, “motor vehicle” shall not include a self-propelled vehicle, or a component part of such a vehicle, that has any of the following characteristics: (1) Has a gross vehicle weight rating of 30,000 pounds or more, and is not a recreational vehicle as defined by Section 18010 of the Health and Safety Code. (2) Is designed to transport more than 15 passengers, including the driver. (3) Is used in the transportation of materials considered hazardous pursuant to the Hazardous Materials Transportation Act (49 U.S.C. Sec. 5101 et seq.), as amended. (b) “Watercraft” means a vessel, as defined in Section 21 of the Harbors and Navigation Code, and may include any non-self-propelled trailer used to transport such watercraft upon land. (c) (1) “Vehicle service contract” means a contract or agreement for a separately stated consideration and for a specific duration to repair, replace, or maintain a motor vehicle or watercraft, or to indemnify for the repair, replacement, or maintenance of a motor vehicle or watercraft, necessitated by an operational or structural failure due to a defect in materials or workmanship, or due to normal wear and tear. (2) (A) A vehicle service contract may also provide for the incidental payment of indemnity under limited circumstances only in the form of the following additional benefits: coverage for towing, substitute transportation, emergency road service, rental car reimbursement, reimbursement of deductible amounts under a manufacturer’s warranty, and reimbursement for travel, lodging, or meals. (B) A provider seeking to offer a vehicle service contract, including any of the benefits described in subparagraph (A), shall, when filing a specimen of the contract in accordance with subdivision (a) of Section 12820, certify that the indemnity benefits provided are incidental. For purposes of subparagraph (A) and this certification, indemnity benefits are incidental if the cost to provide them based on historical data, or projected data if historical data is unavailable or insufficient, is substantially less than the cost of providing all the benefits described in paragraphs (1), (3), (4), and (5). The commissioner may request the historical or projected data at any time. (3) “Vehicle service contract” also includes an agreement of a term of at least one year, for separately stated consideration, that promises routine maintenance. (4) Notwithstanding Section 116, and paragraphs (1) and (2) of this subdivision, a vehicle service contract also includes one or more of the following: (A) An agreement that promises the repair or replacement of a tire or wheel necessitated by wear and tear, defect, or damage caused by a road hazard. However, an agreement that promises the repair or replacement of a tire necessitated by wear and tear, defect, or damage caused by a road hazard, in which the obligor is the tire manufacturer, is exempt from the requirements of this part. A warranty provided by a tire or wheel distributor or retailer is exempt from the requirements of this part as long as the warranty covers only defects in the material or workmanship of the tire or wheel. (B) An agreement that promises the repair or replacement of glass on a vehicle necessitated by wear and tear, defect, or damage caused by a road hazard. However, a warranty provided by a vehicle glass or glass sealant manufacturer is exempt from the requirements of this part. A warranty provided by a vehicle glass distributor or retailer is exempt from the requirements of this part as long as the warranty covers only defects in the material or workmanship of the vehicle glass. (C) An agreement that promises the removal of a dent, ding, or crease without affecting the existing paint finish using paintless dent repair techniques, and which expressly excludes the replacement of vehicle body panels, sanding, bonding, or painting. (D) An agreement that promises the replacement of a motor vehicle key or key fob in the event that the key or key fob becomes inoperable or is lost or stolen. (5) “Vehicle service contract” also includes an agreement covering any of a vehicle’s mechanical components, provided with or without separate consideration, that promises to repair, replace, or maintain a motor vehicle or watercraft, or to indemnify for the repair, replacement, or maintenance of a motor vehicle or watercraft, conditioned upon the use of a specific brand or brands of lubricant, treatment, fluid, or additive. (d) “Service contract administrator” or “administrator” means any person, other than an obligor, who performs or arranges, directly or indirectly, any of the following activities: (1) Providing sellers with service contract forms. (2) Participating in the adjustment of claims arising from service contracts. (3) Coordinating the performance or arrangement of any of the benefits permissible under subdivision (c). (4) Collecting, maintaining, or disbursing of moneys to compensate any person for claims, repairs, or refunds pursuant to a vehicle service contract. (e) “Purchaser” means any person who purchases a vehicle service contract from a seller. (f) “Seller” means either of the following: (1) With respect to motor vehicles, a dealer or lessor-retailer licensed in one of those capacities by the Department of Motor Vehicles and who sells vehicle service contracts incidental to their business of selling or leasing motor vehicles. (2) With respect to watercraft, a person who sells vehicle service contracts incidental to that person’s business of selling or leasing watercraft vehicles. (g) “Obligor” means the entity legally obligated under the terms of a service contract. (h) “Road hazard” means a hazard that is encountered while driving a motor vehicle and that may include, but is not limited to, potholes, rocks, debris, metal parts, glass, plastic, curbs, or composite scraps. (Amended by Stats. 2025, Ch. 558, Sec. 26. (AB 487) Effective January 1, 2026.) - 12805. Verify source ↗
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 8. SERVICE CONTRACTS [12800 - 12865] ( Part 8 added by Stats. 2003, Ch. 439, Sec. 5. )
Some vehicle service and maintenance-related agreements are not treated as insurance, and certain listed agreements are exempt from parts of this chapter.
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 8. SERVICE CONTRACTS [12800 - 12865] ( Part 8 added by Stats. 2003, Ch. 439, Sec. 5. ) ## 12805. (a) Notwithstanding Sections 103 and 116, the following types of agreements covering watercraft or motor vehicles shall not constitute insurance: (1) A vehicle service contract that does each of the following: (A) Names as the obligor a motor vehicle manufacturer or distributor licensed in that capacity by the Department of Motor Vehicles, or a watercraft manufacturer. (B) Covers only motor vehicles or watercraft manufactured, distributed, or sold by that obligor. (2) A vehicle service contract in which the obligor is a seller, provided that the obligor complies with all provisions of this part except Section 12815. (3) A vehicle service contract sold by a seller in which the obligor is a party other than the seller, provided that the obligor complies with all provisions of this part. (4) An agreement in which the obligor is a motor vehicle or watercraft part manufacturer, distributor, or retailer, that covers no more than the following items: (A) The repair or replacement of a part manufactured, distributed, or retailed by that obligor. (B) Consequential and incidental damage resulting from the failure of that part. (5) An agreement in which the obligor is a repair facility, that is entered into pursuant and subsequent to repair work previously performed by that repair facility, and that is limited in scope to the following: (A) The repair or replacement of the part that was previously repaired. (B) Consequential and incidental damage resulting from the failure of that part. (6) An agreement promising only routine maintenance that does not constitute a vehicle service contract. (7) An agreement whereby an employer promises, or a third party contracted by the employer and acting on the employer’s behalf provides, mileage reimbursement or routine vehicle maintenance or noncollision repairs, or any combination of these benefits, to the employer’s employees for personal vehicles used in the employer’s business. (b) The types of agreements described in paragraphs (4) to (7), inclusive, of subdivision (a) are exempt from all provisions of this part. (c) Vehicle service contracts described in paragraph (1) of subdivision (a) are exempt from the provisions of Sections 12815, 12830, 12835, and 12845. (Amended by Stats. 2016, Ch. 386, Sec. 4. (AB 2354) Effective January 1, 2017.) - 1281. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [1280 - 1284] ( Article 1 enacted by Stats. 1935, Ch. 145. )
Reciprocal and interinsurance contracts, related participants, and related matters are subject to this code, unless this chapter exempts them.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [1280 - 1284] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 1281. Reciprocal or interinsurance contracts, the exchange thereof, the subscribers, attorneys in fact, agents, and representatives, and all matters incident to or concerned with such contracts and relationship, shall be subject to and regulated by all of the provisions of this code, whether or not such provisions specifically refer to reciprocals or interinsurance exchanges, except as otherwise exempted in this chapter. When any provision of this code, other than in this chapter, is made applicable to reciprocal insurers, such provision shall be construed in accordance with the fundamental nature of a reciprocal insurer. In the event of any direct conflicts between such other law and the provisions of this chapter, the latter shall prevail. Such other law may, however, be used to supplement or explain the provisions of this chapter. (Amended by Stats. 1971, Ch. 341.) - 12810. Verify source ↗
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 8. SERVICE CONTRACTS [12800 - 12865] ( Part 8 added by Stats. 2003, Ch. 439, Sec. 5. )
Only a seller may sell or offer a vehicle service contract to a purchaser, and sellers and obligors may not use a fronting company arrangement to evade that rule.
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 8. SERVICE CONTRACTS [12800 - 12865] ( Part 8 added by Stats. 2003, Ch. 439, Sec. 5. ) ## 12810. (a) No person, other than a seller, shall sell or offer for sale a vehicle service contract to a purchaser. (b) No obligor shall use a seller as a fronting company and no seller shall act as a fronting company. For purposes of this section, a “fronting company” is a seller that authorizes a third-party obligor to use its name or business to evade or circumvent the provisions of subdivision (a). (Added by Stats. 2003, Ch. 439, Sec. 5. Effective January 1, 2004. Operative July 1, 2004, by Sec. 7 of Ch. 439.) - 12815. Verify source ↗
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 8. SERVICE CONTRACTS [12800 - 12865] ( Part 8 added by Stats. 2003, Ch. 439, Sec. 5. )
Certain service-contract businesses must be licensed, and the section sets license fees and an exemption for applicants.
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 8. SERVICE CONTRACTS [12800 - 12865] ( Part 8 added by Stats. 2003, Ch. 439, Sec. 5. ) ## 12815. (a) An obligor who is not a seller shall possess a vehicle service contract provider license. A vehicle service contract provider license shall be applied for and maintained, and its holder shall be subject to disciplinary action, as if it were a property broker-agent and casualty broker-agent license, with the following exceptions: (1) An applicant for a vehicle service contract provider license is exempt from having to satisfy continuing education requirements, and from having to pass a qualifying exam. (2) The fee to obtain a vehicle service contract provider license shall be four thousand nine hundred thirty-nine dollars ($4,939). The fee to renew a vehicle service contract provider license shall be eight hundred forty-seven dollars ($847). (b) A service contract administrator shall be licensed as a property broker-agent and casualty broker-agent. (Amended by Stats. 2025, Ch. 566, Sec. 10. (AB 943) Effective January 1, 2026.) - 1282. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [1280 - 1284] ( Article 1 enacted by Stats. 1935, Ch. 145. )
Many Insurance Code provisions do not apply to reciprocal or interinsurance exchanges and related persons unless another part of the code specifically makes them applicable.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [1280 - 1284] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 1282. (a) The following provisions of this code shall not be applicable to reciprocal or interinsurance exchanges and their contracts, subscribers, attorneys in fact, agents, and representatives, unless such provisions are referred to and specifically made applicable or incorporated by reference by other portions of this code, and, in such event, such provisions shall be applicable only to the extent required by such reference or incorporation: (1) Sections 700.01, 700.02, 700.03, and 700.04; (2) Sections 707, 708, 709, 710, and 711; (3) Section 760.5; (4) Sections 984, 986, and 987 of Article 13 (commencing with Section 980) of Chapter 1, Part 2, Division 1, relating to insolvency; (5) Sections 1044, 1045, and 1047; (6) Sections 1104.2, 1104.3, 1104.4, 1104.5, 1104.6, 1104.7, and 1104.8, except with respect to incorporated attorneys in fact; (7) Section 1140; (8) Section 1140.5, except with respect to incorporated attorneys in fact; (9) Section 1152; (10) Sections 1153, 1153.5, and 1154; (11) Article 2.5 (commencing with Section 1160.1) of Chapter 2, Part 2, Division 1, relating to life insurer investments in housing projects; (12) Section 1194.8; (13) Article 5 (commencing with Section 1220) of Chapter 2, Part 2, Division 1, relating to investments in loans on life insurance policies; (14) Article 2 (commencing with Section 1580) of Chapter 4, Part 2, Division 1, relating to alien insurers; (15) Article 3 (commencing with Section 1600) of Chapter 4, Part 2, Division 1, relating to agent for service of process; (16) Article 16 (commencing with Section 1758.1) of Chapter 5, Part 2, Division 1, relating to variable contract agents; (17) Chapter 6 (commencing with Section 1760) of Part 2, Division 1, relating to surplus line brokers; (18) Chapter 8 (commencing with Section 1831) of Part 2, Division 1, relating to life insurance analysts; (19) Articles 1 (commencing with Section 3010) and 2 (commencing with Section 3030) of Chapter 3, Part 1, Division 2, relating to incorporated fire and marine insurers; (20) Chapter 4 (commencing with Section 4010) of Part 1, Division 2, relating to general mutual insurers; (21) Chapter 5 (commencing with Section 5050) of Part 1, Division 2, relating to county mutual fire insurers; (22) Chapter 6 (commencing with Section 7080) of Part 1, Division 2, relating to county mutual fire reinsurers; (23) Chapter 7 (commencing with Section 9080) of Part 1, Division 2, relating to fraternal fire insurers; (24) Articles 3 (commencing with Section 10150) and 3a (commencing with Section 10159.1) of Chapter 1, Part 2, Division 2, relating to life insurance policies; (25) Sections 10170, 10171, 10172, and 10173, relating to payment and proceeds of life insurance policies; (26) Chapter 2 (commencing with Section 10200) of Part 2, Division 2, relating to group life policies; (27) Chapter 2.5 (commencing with Section 10220) of Part 2, Division 2, relating to blanket life policies; (28) Chapter 3 (commencing with Section 10240) of Part 2, Division 2, relating to burial contracts; (29) Sections 10430, 10431, 10432, and 10433, relating to restrictions on business of life insurers; (30) Articles 1a (commencing with Section 10440), 2 (commencing with Section 10450), 3 (commencing with Section 10478), 3a (commencing with Section 10489.1), 4 (commencing with Section 10490), and 5 (commencing with Section 10506) of Chapter 5, Part 2, Division 2, relating to internal affairs of mutual insurers, registration and valuation of life policies, standard valuation law, exempt societies, pension funds and separate accounts; (31) Chapter 6 (commencing with Section 10510) of Part 2, Divison 2, relating to incorporated life insurers issuing policies on a reserve basis; (32) Chapter 10 (commencing with Section 10970) of Part 2, Division 2, relating to fraternal benefit societies; (33) Chapter 10A (commencing with Section 11400) of Part 2, Division 2, relating to firemen’s, policemen’s, or peace officers’ benefit and relief associations; (34) Chapter 11 (commencing with Section 11420) of Part 2, Division 2, relating to change by assessment plan life insurers to reserve plan; (35) Chapter 11A (commencing with Section 11491) of Part 2, Division 2, relating to nonprofit hospital service plans; (36) Chapter 12 (commencing with Section 11520) of Part 2, Division 2, relating to grants and annuities societies; (37) Chapter 13 (commencing with Section 11525) of Part 2, Division 2, relating to voluntary mutualization of certain incorporated insurers; (38) Article 3 (commencing with Section 11600), of Chapter 1, Part 3, Division 2, relating to capital requirements of incorporated insurers; (39) Chapter 4 (commencing with Section 11770) of Part 3, Division 2, relating to the State Compensation Insurance Fund; (40) Sections 12050, 12051, 12052, and 12110, relating to incorporated surety insurers; (41) Part 5 (commencing with Section 12140) of Division 2, relating to motor clubs; (42) Part 6 (commencing with Section 12340) of Division 2, relating to insurance covering land, but not including Sections 12640.19, 12660, and 12661. (Amended by Stats. 1980, Ch. 209, Sec. 1.) - 12820. Verify source ↗
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 8. SERVICE CONTRACTS [12800 - 12865] ( Part 8 added by Stats. 2003, Ch. 439, Sec. 5. )
Before offering or giving a vehicle service contract form to a purchaser or seller, the obligor must file a specimen with the commissioner.
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 8. SERVICE CONTRACTS [12800 - 12865] ( Part 8 added by Stats. 2003, Ch. 439, Sec. 5. ) ## 12820. (a) Prior to offering a vehicle service contract form to a purchaser or providing a vehicle service contract form to a seller, an obligor shall file with the commissioner a specimen of that vehicle service contract form. (b) A vehicle service contract form may include any or all of the benefits described in subdivision (c) of Section 12800 and shall comply with all of the following requirements: (1) (A) If an obligor has complied with Section 12830, the vehicle service contract shall include a disclosure in substantially the following form: “Performance to you under this contract is guaranteed by a California approved insurance company. You may file a claim with this insurance company if any promise made in the contract has been denied or has not been honored within 60 days after your request. The name and address of the insurance company is: (insert name and address). If you are not satisfied with the insurance company’s response, you may contact the California Department of Insurance at 1-800-927-4357 or access the department’s Internet Web site (www.insurance.ca.gov).” (B) If an obligor has complied with Section 12836, the vehicle service contract shall include a disclosure in substantially the following form: “If any promise made in the contract has been denied or has not been honored within 60 days after your request, you may contact the California Department of Insurance at 1-800-927-4357 or access the department’s Internet Web site (www.insurance.ca.gov).” (C) The requirement that a vehicle service contract form include the department’s Internet Web site shall not apply to a form for which the department has issued a “no objection letter” as of December 31, 2016. (2) All vehicle service contract language that excludes coverage, or imposes duties upon the purchaser, shall be conspicuously printed in boldface type no smaller than the surrounding type. (3) The vehicle service contract shall do each of the following: (A) State the obligor’s full corporate name or a fictitious name approved by the commissioner, the obligor’s mailing address, the obligor’s telephone number, and the obligor’s vehicle service contract provider license number. (B) State the name of the purchaser and the name of the seller. (C) Conspicuously state the vehicle service contract’s purchase price. (D) Comply with Sections 1794.4 and 1794.41 of the Civil Code. (E) Name the administrator, if any, and provide the administrator’s license number. (4) If the vehicle service contract excludes coverage for preexisting conditions, the contract must disclose this exclusion in 12-point type. (c) The following benefits constitute insurance, whether offered as part of a vehicle service contract or in a separate agreement: (1) Indemnification for a loss caused by misplacement, theft, collision, fire, or other peril typically covered in the comprehensive coverage section of an automobile insurance policy, a homeowner’s policy, or a marine or inland marine policy, except as expressly authorized in subdivision (c) of Section 12800. (2) Locksmith services, unless offered as part of an emergency road service benefit. (d) This section shall become operative on January 1, 2017. (Amended (as added by Stats. 2015, Ch. 348, Sec. 27) by Stats. 2016, Ch. 386, Sec. 5. (AB 2354) Effective January 1, 2017.) - 12825. Verify source ↗
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 8. SERVICE CONTRACTS [12800 - 12865] ( Part 8 added by Stats. 2003, Ch. 439, Sec. 5. )
An obligor may cancel a service contract only under stated conditions and must give notice and refunds as required.
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 8. SERVICE CONTRACTS [12800 - 12865] ( Part 8 added by Stats. 2003, Ch. 439, Sec. 5. ) ## 12825. (a) In addition to any other right of rescission an obligor or purchaser may have, an obligor may include a provision in a service contract that reserves to the obligor the right to cancel the service contract within 60 days under the following conditions: (1) Notice of cancellation is mailed to the purchaser postmarked before the 61st day after the date the contract was sold by the seller. (2) The obligor provides the purchaser with a refund equal to the full purchase price stated on the contract within 30 days from the date of cancellation. However, if the obligor has paid a claim, or has advised the purchaser in writing that it will pay a claim, it may provide a pro rata refund, less the amount of any claims paid prior to cancellation. (3) The service contract ceases to be valid no less than five days after the postmark date of the notice. (4) The notice states the specific grounds for the cancellation. (b) An obligor may at any time cancel a service contract for nonpayment by the purchaser, conditioned upon each of the following: (1) Notice of cancellation is mailed to the purchaser. (2) If any refund is owed pursuant to Section 1794.41 of the Civil Code, the refund is paid within 30 days of the date of cancellation. (3) The service contract ceases to be valid no less than five days after the postmark date of the notice. (4) The notice states the specific grounds for the cancellation. (c) An obligor may at any time cancel a service contract for material misrepresentation or fraud by the purchaser, conditioned upon each of the following: (1) Notice of cancellation is mailed to the purchaser (2) A pro rata refund of the purchase price stated on the contract is paid within 30 days of the date of cancellation. (3) The notice states the specific nature of the misrepresentation. (d) An obligor who cancels a contract is liable for any claim reported to a person designated in the contract for the reporting of claims if the claim is reported prior to the effective date of cancellation and is covered by the contract. For the purpose of this subdivision, a purchaser is deemed to have reported a claim if he or she has completed the first step required under the contract for reporting a claim. (e) An obligor canceling a contract pursuant to subdivision (b), (c), or (d) who pays a claim, or has advised the purchaser in writing that he or she will pay a claim, may provide a prorata rather than full refund, less the amount of any claims paid prior to cancellation. (Added by Stats. 2003, Ch. 439, Sec. 5. Effective January 1, 2004. Operative July 1, 2004, by Sec. 7 of Ch. 439.) - 1283. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [1280 - 1284] ( Article 1 enacted by Stats. 1935, Ch. 145. )
Part 7, Division 2 of the Revenue and Taxation Code applies to reciprocal or interinsurance exchanges.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [1280 - 1284] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 1283. The provisions of Part 7, Division 2 of the Revenue and Taxation Code shall be applicable to reciprocal or interinsurance exchanges. (Added by Stats. 1941, Ch. 112.) - 12830. Verify source ↗
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 8. SERVICE CONTRACTS [12800 - 12865] ( Part 8 added by Stats. 2003, Ch. 439, Sec. 5. )
An obligor must file an insurance policy with the commissioner before taking on vehicle service contract obligations, and the policy has to meet specified insurer, capital, and cancellation-notice rules.
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 8. SERVICE CONTRACTS [12800 - 12865] ( Part 8 added by Stats. 2003, Ch. 439, Sec. 5. ) ## 12830. (a) Prior to incurring an obligation under a vehicle service contract, an obligor shall file with the commissioner, to the attention of the legal division, and receive the commissioner’s approval to use, a copy of an insurance policy covering 100 percent of the obligor’s vehicle service contract obligations. The policy must be issued by an insurer admitted in this state and authorized by the commissioner to issue that insurance in this state. The policy may also be issued by a risk retention group, as that term is defined in 15 U.S.C. Sec. 3901(a)(4), as long as that risk retention group is in full compliance with the federal Liability Risk Retention Act of 1986 (15 U.S.C. Sec. 3901 and following), is in good standing in its domiciliary jurisdiction, and has registered with the commissioner pursuant to Chapter 1.5 (commencing with Section 125) of Part 1 of Division 1. The insurance required by this subdivision shall be subject to the following: (1) The insurer or risk retention group shall, at the time the policy is filed with the commissioner, and continuously thereafter, be rated “B++” or better by A. M. Best Company, Inc., maintain surplus as to policyholders and paid-in capital of at least fifteen million dollars ($15,000,000), and annually file audited financial statements with the commissioner. (2) The commissioner may authorize an insurer or risk retention group that has surplus as to policyholders and paid-in capital of less than fifteen million dollars ($15,000,000) but at least equal to ten million dollars ($10,000,000) to issue the insurance required by this paragraph if the insurer or risk retention group demonstrates to the satisfaction of the commissioner that the company maintains a ratio of direct written premiums, wherever written, to surplus as to policyholders and paid-in capital of not more than 3 to 1. (3) An obligor required to maintain insurance pursuant to this paragraph who is an affiliate of a distributor of new motor vehicles licensed as such in any state prior to January 1, 2003, and continuously thereafter, is exempt from the requirement that its insurer or risk retention group satisfy the rating, surplus, and paid-in capital requirements of paragraph (1). This exemption shall apply only if the distributor sold or distributed at least 25,000 new motor vehicles to licensed dealers in the preceding five years. For the purpose of this paragraph, “affiliate” has the meaning set forth in subdivision (a) of Section 1215. (b) An insurance policy filed with the commissioner pursuant to subdivision (a) shall state the name of the obligor. The policy shall provide that all purchasers of vehicle service contracts shall be entitled to satisfaction by the insurer of any and all obligations arising under vehicle service contracts of the named obligor, upon the existence of all of the following conditions and no others: (1) The service contract obligor refuses or fails to satisfy an obligation arising under the vehicle service contract within 60 days of the date the purchaser submits proof of loss to the obligor. (2) The purchaser provides written notice to the insurer that the obligor has failed to comply with an obligation under the vehicle service contract. (3) The purchaser possesses a vehicle service contract sold after the inception and prior to any cancellation of the insurance policy required by subdivision (a), and the vehicle service contract recites the name of the obligor that is insured by the policy as the obligor of the service contract. (c) An insurer’s liability under a policy filed pursuant to subdivision (a) shall not be negated by any failure of the seller, an administrator, the obligor, or agents of any of these persons, to report the issuance of a vehicle service contract or to remit moneys to another person pursuant to a contractual agreement. The policy must state that the insurer is deemed to have received the premium for the policy upon payment by the purchaser for a vehicle service contract insured by that policy. (d) In lieu of complying with Section 12836, an obligor shall have on file with the commissioner only one active policy from one insurer at any time. Unless exempt under paragraph (1) of subdivision (a) of Section 12805, an obligor shall comply with either this section or Section 12836, but not both. (e) No policy cancellation by an insurer shall be valid unless a notice of the intent to cancel the policy was filed with the commissioner 30 days prior to the effective date of the cancellation, or 10 days prior in the event that the cancellation is due to fraud, material misrepresentation, or defalcation by the obligor or its administrator, if any. (Amended by Stats. 2023, Ch. 204, Sec. 16. (AB 1140) Effective January 1, 2024.) - 12835. Verify source ↗
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 8. SERVICE CONTRACTS [12800 - 12865] ( Part 8 added by Stats. 2003, Ch. 439, Sec. 5. )
If an insurer cancels a filed policy, the named obligor must either file a replacement policy before the old one ends or stop acting as obligor until the replacement is effective and accepted by the commissioner.
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 8. SERVICE CONTRACTS [12800 - 12865] ( Part 8 added by Stats. 2003, Ch. 439, Sec. 5. ) ## 12835. (a) In the event an insurer cancels a policy that it has filed with the commissioner pursuant to Section 12830, the obligor named on the policy shall do either of the following: (1) File a copy of a new policy with the commissioner, before the termination of the prior policy, providing no lapse in coverage following the termination of the prior policy. (2) Discontinue acting as an obligor as of the termination date of the policy until a new policy becomes effective and has been accepted and acknowledged by the commissioner. (b) This section shall not relieve an obligor from any obligation incurred under service contracts issued with its name as obligor prior to the date the policy was terminated. (Added by Stats. 2003, Ch. 439, Sec. 5. Effective January 1, 2004. Operative July 1, 2004, by Sec. 7 of Ch. 439.) - 12836. Verify source ↗
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 8. SERVICE CONTRACTS [12800 - 12865] ( Part 8 added by Stats. 2003, Ch. 439, Sec. 5. )
An obligor, or its parent company, may meet the net worth requirement by showing the commissioner it has $100 million in net worth instead of complying with Section 12830.
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 8. SERVICE CONTRACTS [12800 - 12865] ( Part 8 added by Stats. 2003, Ch. 439, Sec. 5. ) ## 12836. In lieu of complying with Section 12830, an obligor or its parent company may establish to the commissioner’s satisfaction that it possesses a net worth of one hundred million dollars ($100,000,000). The obligor shall, upon request, provide the commissioner with all documents and affidavits necessary to establish the net worth, including, but not limited to, a copy of the obligor’s financial statements or the obligor’s parent company’s financial statements, and affidavits by the president and chief financial officer attesting to the net worth of the obligor or the obligor’s parent company. If the obligor elects to meet the net worth requirement through the parent company, the parent company shall agree in writing to guarantee the obligations of the obligor relating to contracts of the obligor issued in this state. (Added by Stats. 2007, Ch. 326, Sec. 4. Effective January 1, 2008.) - 1284. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [1280 - 1284] ( Article 1 enacted by Stats. 1935, Ch. 145. )
A reciprocal or interinsurance exchange that meets all listed conditions is exempt from this code’s reserve requirements.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [1280 - 1284] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 1284. Notwithstanding any other provision of this chapter or of this code, any reciprocal or interinsurance exchange which meets all of the conditions of this section shall be exempted from all reserve requirements of this code to which it would otherwise be subject: (a) The subscribers are comprised of a local hospital district formed pursuant to Division 23 (commencing with Section 32000) of the Health and Safety Code and the individual participating members of its attending medical staff, or any hospital (as defined in Section 1250 of the Health and Safety Code) and the individual participating members of its attending medical staff. As used in this section, “attending medical staff” refers to licensed physicians and surgeons, podiatrists, and dentists who have hospital privileges at any hospital and not to interns or residents who are employees of such hospital. (b) The physicians and surgeons on the attending medical staff are independent contractors, whether individually, through professional corporations, or through partnership or clinic arrangements, and the creation of the reciprocal or interinsurance exchange will not affect the prerogatives of such physicians and surgeons in accepting patients, charging fees, or similar issues in the management of a medical practice. This subdivision shall not be construed to limit the authority of a peer review committee to impose such restrictions on the staff privileges of a participating member of the attending medical staff as deemed warranted by the peer review procedure and medical audit methods provided by subdivision (h). (c) The initial capitalization for the reciprocal or interinsurance exchange specified in subdivisions (d), (e), and (f) shall be equivalent to the total professional and comprehensive general patient liability losses paid by the hospital and its participating medical staff members during the 10 calendar years immediately preceding the year in which the application for the organizational permit is filed. For the medical staff, “total professional and comprehensive general patient liability losses” shall include all losses paid by the participating medical staff members, whether based on their practice in the hospital or outside the hospital. Such combined total shall be funded or secured by equal contributions from the hospital and, collectively, the individual participating members of its attending medical staff. Such funds shall be used to pay for the losses incurred for awards, settlements, and legal fees relating to alleged acts of medical malpractice committed by the hospital or any or all of its participating medical staff members, whether committed in or out of the hospital, and for the operational costs of the reciprocal or interinsurance exchange. Upon determination of the aggregate paid professional and comprehensive general patient liability claims of the preceding 10 years by a survey, such paid claims shall be categorized as provided by subdivisions (d) and (e). In the case of a hospital which has been in existence for less than 10 years, or which has substantially expanded its facilities over the preceding 10 years, or which has paid for no professional liability losses during the preceding 10 years, the commissioner may establish such capitalization requirements as he deems necessary and proper as compared to the amounts specified in subdivisions (d) and (e). (d) A primary medical liability risk fund shall be maintained in an amount at least equivalent to the aggregate dollar amount of paid incident claims of one hundred thousand dollars ($100,000) or less per each incident for both the hospital and the participating members of the attending medical staff as provided by subdivision (c). (e) A catastrophic medical liability risk fund shall be maintained in an amount at least equivalent to the aggregate dollar amount of paid incident claims in excess of one hundred thousand dollars ($100,000) per incident for both the hospital and the participating members of the attending medical staff as provided in subdivision (c). These funds shall be either (1) deposited as cash or secured by letters of credit, certificates of deposit or promissory notes, or (2) be obtained through an executed and delivered loan commitment with a duration of at least one year by a banking institution qualified to do business in California or other forms of credit or assets readily convertible to cash to meet liabilities of the reciprocal or interinsurance exchange organized pursuant to this section. (f) All funds or assets collected by a reciprocal or interinsurance exchange established under this section and maintained in a form as set forth in subdivisions (d) and (e) shall be admitted assets valued at face value and be held in accordance with Section 1370 of the Insurance Code, except that a credit commitment shall not be considered an admitted asset for the purpose of regulating investment of assets. (g) The reciprocal or interinsurance exchange may seek from a licensed insurer, or secure in accordance with Chapter 6 (commencing with Section 1760) of Part 2 of Division 1, excess risk coverage for amounts above the self-retention limit of subdivisions (c), (d), and (e). The hospital and the individual members of the attending medical staff shall have unlimited several liability pursuant to Section 1395 to contribute to any liability not covered by such excess risk coverage insurance. Such liability shall be based upon each subscriber’s share of the total liability of the reciprocal or interinsurance exchange as determined by a formula adopted by its board of directors. In the event that a subscriber fails to pay any portion of an assessment, then, without releasing the defaulting subscriber from any obligation to the reciprocal or interinsurance exchange, the remaining subscribers shall be charged with the unpaid assessment in accordance with the adopted formula. (h) The amounts specified in subdivisions (d), and (e) shall be available in the aggregate to meet the professional and comprehensive general patient liabilities of the hospital and the participating members of the attending medical staff, and shall be replenished annually, or more frequently, if necessary, to an amount equivalent to that specified in subdivision (c) or (q), whichever is greater. Such total shall be maintained by a ratio of contributions annually determined by the governing board of the reciprocal or interinsurance exchange as fair, just and reasonable between the hospital and the participating members of the attending medical staff. Assessments may be required as determined to be necessary by the governing board and shall be due within 60 days of notice thereof. Failure to pay such assessments when due shall constitute grounds for termination of policy benefits or coverage. (i) Any member of the attending medical staff participating in the program shall, as a condition of such participation, be subject to an extensive peer review procedure and a medical audit method of documenting the quality of medical care. (j) Any system of rating or assessing individual participating members of the attending medical staff on the basis of their respective risk exposure shall be fair, just and reasonable. (k) A promissory note, for the purposes of subdivision (e), shall be secured, and such security shall be perfected, by real or personal property having a market value one and one-half times the face value of the note. (l) “Hospital,” as used in this section, shall also include any two or more hospitals when either of the following conditions is met: (i) They are governed by the same hospital district; or (ii) Where there is a medical staff subject to a unified medical audit and peer review procedure. (m) Any reciprocal or interinsurance exchange which meets all of the conditions of this section shall be exempt from the California Insurance Guarantee Association established pursuant to Article 14.2 (commencing with Section 1063) of Chapter 1 of Part 2 of Division 1. (n) For the purposes of Section 985, minimum capitalization shall be either the initial capitalization as provided in subdivision (c) or the minimum capitalization required by subdivision (q), whichever is greater. (o) In the event that the reciprocal or interinsurance exchange has reasonable cause to believe that its minimum capitalization may be impaired by current liabilities, including reported claims, it shall issue within 30 days to its subscribers notices of assessments in amounts sufficient to cure the impairment. Within 30 days of such notice the subscribers shall pay the assessment or present forms of indebtedness as provided by subdivision (e), except that with regard to a promissory note issued by a person or entity other than a banking institution qualified to do business in California, such note shall be secured by assets sufficient to assure payment of the debt should a default occur. (p) Any notice of assessment issued pursuant to this section shall be considered an admitted asset at face value and reported as such for the purpose of determining solvency under Section 985. (q) Minimum capitalization of a reciprocal or interinsurance exchange organized and conducted pursuant to this section shall be determined annually. For the first year following issuance of a certificate of authority, the minimum capitalization shall be that specified in subdivision (c). Each year thereafter, the reciprocal or interinsurance exchange shall conduct a new survey of its subscribers to reestablish their total professional and comprehensive patient liability loss history as provided by subdivision (r). If such recalculation of such history discloses total losses exceeding the existing minimum capitalization by 20 percent, the minimum capitalization shall be increased to the amount of such new loss history within six months. Nothing in this subdivision shall be construed to preclude the reciprocal or interinsurance exchange from capitalizing at a level exceeding the minimum capitalization required by this section. (r) The survey of subscribers which establishes total and comprehensive general patient loss liability history shall be annually recalculated to reflect the following: (1) All such losses paid by, or on behalf of, the hospital for the immediately preceding 10 years; (2) All such losses paid by, or on behalf of, participating individual members for the immediately preceding 10-calendar-year period during which they held staff privileges at the subscriber hospital; and (3) All such losses paid by, or on behalf of, participating individual members of the attending medical staff during any portion of the immediately preceding five-calendar-year period in which they were not members of the subscriber hospital staff. (Amended by Stats. 1977, Ch. 904.) - 12840. Verify source ↗
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 8. SERVICE CONTRACTS [12800 - 12865] ( Part 8 added by Stats. 2003, Ch. 439, Sec. 5. )
Obligors, administrators, and certain insurers must keep service-contract records, preserve them for at least three years after contract expiration, and make them available to the commissioner on request.
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 8. SERVICE CONTRACTS [12800 - 12865] ( Part 8 added by Stats. 2003, Ch. 439, Sec. 5. ) ## 12840. (a) Every obligor or its administrator shall maintain at its principal office complete and accurate accounts, books, and records of all transactions among the obligor, its administrator, if any, sellers, insurers, and purchasers. Records maintained pursuant to this section shall be made available to the commissioner upon reasonable request. Any computerized recordkeeping system must be capable of producing a legible hard copy of all required records. Accounts, books, and records shall include: (1) A complete set of accounting records, including, but not limited to, a general ledger, cash receipts and disbursements journals, accounts receivable registers, and accounts payable registers. (2) Copies of each type of service contract sold. (3) The name and address of each service contract purchaser to the extent that the name and address have been furnished by the service contract purchaser. (4) A list of the locations where service contracts are marketed, sold, or offered for sale. (5) Written claims files which shall contain at least the dates and descriptions of claims related to the service contracts. (b) All required records pertaining to a service contract shall be maintained by the obligor, its administrator, or the insurer underwriting the contract, for at least three years after the expiration of the contract. (c) Every insurer that has issued a policy to an obligor shall have an ongoing right to access that obligor’s books and records in order to permit the insurer to fulfill all obligations to purchasers. (d) The commissioner may examine and investigate the affairs of every obligor and any administrator of an obligor. Any examination or investigation shall be at the expense of the obligor or the administrator, in the discretion of the commissioner. Any information contained in the books and records, including, but not limited to, the identity and addresses of sellers and purchasers of service contracts, shall be confidential, except that the commissioner may use the information in any proceeding or investigation instituted against an obligor or an administrator. (e) An obligor’s failure to keep or maintain the required accounts, books, or records, or to provide the commissioner with full and immediate access to those records, shall be grounds for the immediate suspension or revocation of the obligor’s vehicle service contract provider’s license, and also shall be grounds for the commissioner to issue a cease and desist order pursuant to Section 1065.2. (Added by Stats. 2003, Ch. 439, Sec. 5. Effective January 1, 2004. Operative July 1, 2004, by Sec. 7 of Ch. 439.) - 12845. Verify source ↗
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 8. SERVICE CONTRACTS [12800 - 12865] ( Part 8 added by Stats. 2003, Ch. 439, Sec. 5. )
Vehicle service contract obligors and administrators who provide forms to sellers or purchasers must comply with Sections 12815, 12830, and 12835, or face criminal and injunctive consequences.
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 8. SERVICE CONTRACTS [12800 - 12865] ( Part 8 added by Stats. 2003, Ch. 439, Sec. 5. ) ## 12845. Any vehicle service contract obligor or administrator that provides vehicle service contract forms to sellers or purchasers, directly or indirectly, and fails to comply with Sections 12815, 12830 and 12835, is guilty of a public offense punishable by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code, or by a fine not exceeding five hundred thousand dollars ($500,000), or both, and shall be enjoined from further violations by a court of competent jurisdiction on petition of the commissioner. This section shall not apply to a seller who is an obligor under vehicle service contracts it sells. The commissioner may issue a cease and desist order pursuant to Section 1065.2 to an obligor or administrator who violates Section 12830 or 12835. The commissioner may issue a cease and desist order pursuant to Section 12921.8 to an obligor or administrator in violation of Section 12815. (Amended by Stats. 2011, Ch. 15, Sec. 220. (AB 109) Effective April 4, 2011. Operative October 1, 2011, by Sec. 636 of Ch. 15, as amended by Stats. 2011, Ch. 39, Sec. 68.) - 12850. Verify source ↗
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 8. SERVICE CONTRACTS [12800 - 12865] ( Part 8 added by Stats. 2003, Ch. 439, Sec. 5. )
An obligor must prove a claim is not covered and that a claim settlement amount is proper. A participating seller of a service contract must not make its commission or compensation depend on savings from claim adjustment or payment.
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 8. SERVICE CONTRACTS [12800 - 12865] ( Part 8 added by Stats. 2003, Ch. 439, Sec. 5. ) ## 12850. (a) An obligor has the burden of proving that a claim is not covered by a service contract. An obligor has the burden of proving that a claim settlement amount is proper under the terms of the contract. (b) No seller of a service contract who participates in or influences, directly or indirectly, the processing, administration, or adjustment of claims, shall enter into any agreement or understanding the effect of which is to make the amount of the seller’s commission or compensation contingent upon savings effected in the adjustment, settlement, or payment of losses covered by the contract. (Added by Stats. 2003, Ch. 439, Sec. 5. Effective January 1, 2004. Operative July 1, 2004, by Sec. 7 of Ch. 439.) - 12855. Verify source ↗
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 8. SERVICE CONTRACTS [12800 - 12865] ( Part 8 added by Stats. 2003, Ch. 439, Sec. 5. )
The commissioner may adopt regulations needed or desirable to carry out this chapter.
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 8. SERVICE CONTRACTS [12800 - 12865] ( Part 8 added by Stats. 2003, Ch. 439, Sec. 5. ) ## 12855. The commissioner may adopt regulations necessary or desirable to implement this chapter. (Added by Stats. 2003, Ch. 439, Sec. 5. Effective January 1, 2004. Operative July 1, 2004, by Sec. 7 of Ch. 439.) - 12860. Verify source ↗
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 8. SERVICE CONTRACTS [12800 - 12865] ( Part 8 added by Stats. 2003, Ch. 439, Sec. 5. )
This section says the part is severable, so if one provision or its application is invalid, the rest can still remain effective if they can work without the invalid part.
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 8. SERVICE CONTRACTS [12800 - 12865] ( Part 8 added by Stats. 2003, Ch. 439, Sec. 5. ) ## 12860. The provisions of this part are severable. If any provision of this part or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application. (Added by Stats. 2003, Ch. 439, Sec. 5. Effective January 1, 2004. Operative July 1, 2004, by Sec. 7 of Ch. 439.) - 12865. Verify source ↗
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 8. SERVICE CONTRACTS [12800 - 12865] ( Part 8 added by Stats. 2003, Ch. 439, Sec. 5. )
A refund promise tied to a service contract is generally treated as insurance unless specified conditions are met, in which case it is a refund agreement.
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 8. SERVICE CONTRACTS [12800 - 12865] ( Part 8 added by Stats. 2003, Ch. 439, Sec. 5. ) ## 12865. A promise to refund some or all of the purchase price of a service contract if the purchaser does not file any claims, files a limited number of claims, or files claims the dollar amount of which does not exceed a set amount or percentage, shall constitute insurance, unless subdivisions (a) and (b) are satisfied. If conditions (a) and (b) are satisfied, the promise shall constitute a refund agreement. (a) The promise is offered without separate consideration, and the promisor complies with subdivisions (a)(1), (a)(2) or (a)(3). (1) The promisor is a service contract obligor, the promise is contained within a service contract, and the obligor has complied with all provisions of this part. (2) The promisor is a seller, the refund agreement provides no benefits other than the refund of some or all of the purchase price, and the promisor utilizes a refund agreement administrator. (3) The promisor is neither a seller nor a service contract obligor. Such a person shall be deemed a refund agreement obligor, and shall comply with subdivisions (c)(1), (c)(2) and (c)(3). (b) A person other than the seller who performs or arranges, directly or indirectly, the collection, maintenance, or disbursement of moneys to compensate any party under a refund agreement, and who also provides sellers with refund agreement forms and participates in the adjustment of refund agreement claims, shall be deemed a refund agreement administrator, and shall comply with subdivision (b)(2). (1) The sections enumerated in subdivision (b)(2) shall apply to refund agreements and refund agreement administrators. In applying those sections, the terms vehicle service contract administrator, administrator and obligor shall instead mean refund agreement administrator, the word sold shall instead mean provided and the terms vehicle service contract and service contract shall instead mean refund agreement. The sections enumerated in subdivision (b)(2) shall be construed in accordance with the nature of refund agreement forms, refund agreement administrators, and the refund agreement business. (2) The following sections shall apply and be interpreted pursuant to subdivision (b)(1): 12815(b); 12820(a), (b)(1), (b)(2), (b)(3)(A), (b)(3)(B), 12830(a), (a)(1), (a)(2), (b), (c), (d), (e); 12835; 12840; 12845; 12850; 12855. (c) (1) The sections enumerated in subdivision (c)(2) shall apply to refund agreements and refund agreement obligors. In applying those sections, the terms vehicle service contract obligor and obligor shall instead mean refund agreement obligor, the word sold shall instead mean provided and the terms vehicle service contract and service contract shall instead mean refund agreement. The sections enumerated in subdivision (c)(2) shall be construed in accordance with the nature of refund agreement forms, refund agreement obligors, and the refund agreement business. (2) The following sections shall apply and be interpreted pursuant to subdivision (c)(1): 12810(b); 12815(a); 12820(a), (b)(1), (b)(2), (3)(A), (3)(B); 12830(a), (a)(1), (a)(2), (b), (c), (d), (e); 12835; 12840; 12845; 12850; 12855. (3) A refund agreement obligor may not promise any benefit other than a refund of some or all of the purchase price of a service contract if the purchaser does not file any claims, files a limited number of claims, or files claims the dollar amount of which does not exceed a set amount or percentage. (4) No person other than a seller shall provide or offer to provide a refund agreement to a purchaser. (Added by Stats. 2003, Ch. 439, Sec. 5. Effective January 1, 2004. Operative July 1, 2004, by Sec. 7 of Ch. 439.) - 12880. Verify source ↗
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 9. Pet Insurance [12880 - 12880.8] ( Part 9 added by Stats. 2014, Ch. 896, Sec. 1. )
This section defines key terms used in the pet insurance part of the Insurance Code.
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 9. Pet Insurance [12880 - 12880.8] ( Part 9 added by Stats. 2014, Ch. 896, Sec. 1. ) ## 12880. For purposes of this part, the following definitions shall apply: (a) “Chronic condition” means a condition that can be treated or managed, but not cured. (b) “Congenital anomaly or disorder” means a condition that is present from birth, whether inherited or caused by the environment, which may cause or otherwise contribute to illness or disease. (c) “Hereditary disorder” means an abnormality that is genetically transmitted from parent to offspring and may cause illness or disease. (d) “Orthopedic” refers to conditions affecting the bones, skeletal muscle, cartilage, tendons, ligaments, and joints, including elbow dysplasia, hip dysplasia, intervertebral disc degeneration, patellar luxation, and ruptured cranial cruciate ligaments. “Orthopedic” does not include cancers or metabolic, hemopoietic, or autoimmune diseases. (e) “Pet insurance” means an individual or group property insurance policy that provides coverage for accidents and illnesses of pets, and other veterinary expenses. (f) “Preexisting condition” means any condition for which a veterinarian provided medical advice, the pet received treatment for, or the pet displayed signs or symptoms consistent with the stated condition prior to the effective date of a pet insurance policy or during any waiting period. (g) “Producer” means a person licensed pursuant to Section 1625 or 1625.5 who transacts pet insurance in California. (h) “Renewal” has the same meaning as defined in subdivision (e) of Section 660. (i) “Veterinarian” means an individual who holds a valid license to practice veterinary medicine from the Veterinary Medical Board pursuant to Chapter 11 (commencing with Section 4800) of Division 2 of the Business and Professions Code or other appropriate licensing entity in the jurisdiction in which the individual practices. (j) “Veterinary dental care” means the prevention, diagnosis, and treatment of conditions, diseases, and disorders of the oral cavity, the maxillofacial region, and associated structures. (k) “Veterinary expenses” means the costs associated with medical advice, diagnosis, care, or treatment provided by a veterinarian, including, but not limited to, veterinary dental care, the cost of drugs prescribed by a veterinarian, and services provided under the supervision of a veterinarian. (l) “Waiting period” means the period of time specified in a pet insurance policy that is required to transpire before some or all of the coverage in the policy can begin. (m) “Wellness program” means a subscription or reimbursement-based program that is separate from an insurance policy and that provides goods and services to promote the general health, safety, or well-being of the pet. (Amended by Stats. 2024, Ch. 612, Sec. 1. (SB 1217) Effective January 1, 2025.) - 12880.1. Verify source ↗
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 9. Pet Insurance [12880 - 12880.8] ( Part 9 added by Stats. 2014, Ch. 896, Sec. 1. )
A pet insurance policy is covered by this part if it is marketed, issued, amended, renewed, or delivered to a California resident on or after July 1, 2015.
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 9. Pet Insurance [12880 - 12880.8] ( Part 9 added by Stats. 2014, Ch. 896, Sec. 1. ) ## 12880.1. A policy of pet insurance that is marketed, issued, amended, renewed, or delivered, whether or not in California, to a California resident, on or after July 1, 2015, regardless of the situs of the contract or master group policyholder, or the jurisdiction in which the contract was issued or delivered, is subject to this part. (Added by Stats. 2014, Ch. 896, Sec. 1. (AB 2056) Effective January 1, 2015.) - 12880.2. Verify source ↗
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 9. Pet Insurance [12880 - 12880.8] ( Part 9 added by Stats. 2014, Ch. 896, Sec. 1. )
Pet insurers in California must give consumers detailed pre-sale disclosures and certain documents, and they must provide a 30-day free-look cancellation notice and refund rule for new policies.
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 9. Pet Insurance [12880 - 12880.8] ( Part 9 added by Stats. 2014, Ch. 896, Sec. 1. ) ## 12880.2. (a) An insurer transacting pet insurance in California shall disclose all of the following to consumers: (1) If the policy excludes coverage due to any of the following: (A) A preexisting condition. (B) A hereditary disorder. (C) A congenital anomaly or disorder. (D) A chronic condition. (2) If the policy includes any other exclusion, the following statement: “Other exclusions may apply. Please refer to the exclusions section of the policy for more information.” (3) Any policy provision that limits coverage through a waiting period, a deductible, coinsurance, or an annual or lifetime policy limit. (4) Whether the insurer reduces coverage or increases premiums based on the insured’s claim history, the age of the covered pet, or a change in the geographic location of the insured. (b) (1) If a pet insurer uses any of the terms in paragraph (1) of subdivision (a) in a policy of pet insurance, the insurer shall use the definition of those terms as set forth in Section 12880 and include the definitions of the terms in the policy. The pet insurer shall also make those definitions available before the sale of a policy, through a link on the main page of the insurer’s internet website, or as a hard copy if hard copy policy documents are requested by or provided to a consumer. (2) This subdivision and Section 12880 do not prohibit or limit the types of exclusions pet insurers may use in their policies. This subdivision does not require pet insurers to have any of the limitations or exclusions defined in Section 12880. (c) Before the sale of a policy, a pet insurer shall clearly disclose a summary description of the basis or formula on which the insurer determines claim payments under a pet insurance policy within the policy and through a link on the main page of the insurer’s internet website, or as a hard copy if hard copy policy documents are requested by or provided to a consumer. (d) A pet insurer that uses a benefit schedule to determine claim payment under a pet insurance policy shall do both of the following before the sale of a policy: (1) Clearly disclose the applicable benefit schedule in the policy. (2) Disclose all benefit schedules used by the insurer under its pet insurance policies through a link on the main page of the insurer’s internet website, or as a hard copy if hard copy policy documents are requested by or provided to a consumer. (e) A pet insurer that determines claim payments under a pet insurance policy based on usual and customary fees, or any other reimbursement limitation based on prevailing veterinary service provider charges, shall do both of the following before the sale of a policy: (1) Include a usual and customary fee limitation provision in the policy that clearly describes the insurer’s basis for determining usual and customary fees and how that basis is applied in calculating claim payments. (2) Disclose the insurer’s basis for determining usual and customary fees through a link on the main page of the insurer’s internet website, or as a hard copy if hard copy policy documents are requested by or provided to a consumer. (f) If a medical examination by a licensed veterinarian is required to effectuate coverage, the pet insurer shall clearly and conspicuously disclose the required aspects of the examination before a policy purchase and disclose that examination documentation may result in a preexisting condition exclusion before the sale of a policy. (g) Waiting periods and the requirements applicable to waiting periods shall be clearly and prominently disclosed to consumers before a policy purchase. (h) The insurer shall create a summary of all policy provisions required in subdivisions (a) to (g), inclusive, and subdivision (j) into a separate document titled “Insurer Disclosure of Important Policy Provisions.” (i) The insurer shall post the “Insurer Disclosure of Important Policy Provisions” document required in subdivision (h) through a link on the main page of the insurer’s internet website, or as a hard copy if hard copy policy documents are requested by or provided to a consumer. (j) (1) In connection with the issuance of a new pet insurance policy, the insurer shall provide the insured with a copy of the “Insurer Disclosure of Important Policy Provisions” document required pursuant to subdivision (h) in at least 12-point type when it delivers the policy. (2) In addition, the pet insurance policy shall have clearly printed thereon or attached thereto a notice stating that, after receipt of the policy by the owner, the policy may be returned by the insured for cancellation by delivering it or mailing it to the insurer or to the agent through whom it was purchased. (A) The period of time set forth by the insurer for return of the policy shall be clearly stated on the notice, and this free look period shall be not less than 30 days. The insured may return the policy to the insurer or the agent through whom the policy was purchased at any time during the free look period specified in the notice. (B) The delivery or mailing of the policy by the insured pursuant to this paragraph shall void the policy from the beginning, and the parties shall be in the same position as if a policy or contract had not been issued. (C) All premiums paid and any policy fee paid for the policy shall be refunded to the insured within 30 days from the date that the insurer is notified of the cancellation. However, if the insurer has paid any claim, or has advised the insured in writing that a claim will be paid, the 30-day free look right pursuant to this paragraph is inapplicable and instead the policy provisions relating to cancellation apply to any refund. (k) The disclosures required in this section shall be in addition to any other disclosure requirements required by law or regulation. (Amended by Stats. 2024, Ch. 612, Sec. 2. (SB 1217) Effective January 1, 2025.) - 12880.3. Verify source ↗
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 9. Pet Insurance [12880 - 12880.8] ( Part 9 added by Stats. 2014, Ch. 896, Sec. 1. )
Violating a Pet Insurance provision can trigger a civil penalty set by the commissioner, up to $5,000 per violation or $10,000 per willful violation.
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 9. Pet Insurance [12880 - 12880.8] ( Part 9 added by Stats. 2014, Ch. 896, Sec. 1. ) ## 12880.3. (a) A person who violates a provision of this part is liable to the state for a civil penalty to be determined by the commissioner, not to exceed five thousand dollars ($5,000) for each violation, or, if the violation was willful, a civil penalty not to exceed ten thousand dollars ($10,000) for each violation. The commissioner may establish the acts that constitute a distinct violation for purposes of this section. However, when the issuance, amendment, or servicing of a policy or endorsement is inadvertent, all of those acts constitute a single violation for purposes of this section. (b) The penalty imposed by this section shall be imposed by and determined by the commissioner pursuant to Section 12880.4. The penalty imposed by this section is appealable by means of any remedy provided by Section 12940 or by Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. (Added by Stats. 2014, Ch. 896, Sec. 1. (AB 2056) Effective January 1, 2015.) - 12880.4. Verify source ↗
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 9. Pet Insurance [12880 - 12880.8] ( Part 9 added by Stats. 2014, Ch. 896, Sec. 1. )
The commissioner may start enforcement by serving an order to show cause, and if the charges are justified, must order payment of the penalty and a stop to the violating conduct.
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 9. Pet Insurance [12880 - 12880.8] ( Part 9 added by Stats. 2014, Ch. 896, Sec. 1. ) ## 12880.4. (a) Whenever the commissioner shall have reason to believe that a person has engaged or is engaging in this state in a violation of this part, and that a proceeding by the commissioner in respect thereto would be to the interest of the public, he or she shall issue and serve upon that person an order to show cause containing a statement of the charges in that respect, a statement of that person’s potential liability under this part, and a notice of a hearing thereon to be held at a time and place fixed therein, which shall not be less than 30 days after the service thereof, for the purpose of determining whether the commissioner should issue an order to that person to pay the penalty imposed by Section 12880.3 and to cease and desist those methods, acts, or practices, or any of them, that violate this part. (b) If the charges or any of them are found to be justified, the commissioner shall issue and cause to be served upon that person an order requiring that person to pay the penalty imposed by Section 12880.3 and to cease and desist from engaging in those methods, acts, or practices found to be in violation of this part. (c) The hearing shall be conducted in accordance with the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), except that the hearings may be conducted by an administrative law judge in the administrative law bureau when the proceedings involve a common question of law or fact with another proceeding arising under other Insurance Code sections that may be conducted by administrative law bureau administrative law judges. The commissioner and the appointed administrative law judge shall have all the powers granted under the Administrative Procedure Act. (d) The person is entitled to have the proceedings and the order reviewed by means of any remedy provided by Section 12940 or by the Administrative Procedure Act. (Amended by Stats. 2015, Ch. 303, Sec. 374. (AB 731) Effective January 1, 2016.) - 12880.5. Verify source ↗
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 9. Pet Insurance [12880 - 12880.8] ( Part 9 added by Stats. 2014, Ch. 896, Sec. 1. )
The commissioner may adopt reasonable rules and regulations needed to administer this part.
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 9. Pet Insurance [12880 - 12880.8] ( Part 9 added by Stats. 2014, Ch. 896, Sec. 1. ) ## 12880.5. The commissioner may adopt reasonable rules and regulations, as are necessary to administer this part, in accordance with the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code). (Added by Stats. 2014, Ch. 896, Sec. 1. (AB 2056) Effective January 1, 2015.) - 12880.6. Verify source ↗
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 9. Pet Insurance [12880 - 12880.8] ( Part 9 added by Stats. 2014, Ch. 896, Sec. 1. )
When a pet insurance policy is issued or delivered, the insurer must give the policyholder a written disclosure in 12-point boldface type.
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 9. Pet Insurance [12880 - 12880.8] ( Part 9 added by Stats. 2014, Ch. 896, Sec. 1. ) ## 12880.6. At the time a pet insurance policy is issued or delivered to a policyholder, the insurer shall include a written disclosure with all of the following information, printed in 12-point boldface type: (a) The department’s mailing address, toll-free telephone number established pursuant to Section 12921.1, and internet website address. (b) The address and customer service telephone number of the insurer or the agent or broker of record. (c) A statement that the department should be contacted only after discussions with the insurer, or its agent or other representative, have failed to produce a satisfactory resolution of the problem. (d) If the policy was issued or delivered by an agent or broker, a statement advising the policyholder to contact the broker or agent for assistance. (Added by Stats. 2019, Ch. 166, Sec. 1. (AB 1535) Effective January 1, 2020.) - 12880.7. Verify source ↗
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 9. Pet Insurance [12880 - 12880.8] ( Part 9 added by Stats. 2014, Ch. 896, Sec. 1. )
Pet insurers may use preexisting-condition exclusions and waiting periods only within stated limits, must disclose them, and must issue coverage promptly after a complete application and valid payment.
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 9. Pet Insurance [12880 - 12880.8] ( Part 9 added by Stats. 2014, Ch. 896, Sec. 1. ) ## 12880.7. (a) After disclosure to the consumer, a pet insurer may issue policies that exclude coverage on the basis of one or more preexisting conditions. A condition for which coverage is afforded on a policy shall not be considered a preexisting condition on a renewal of the policy. The pet insurer has the burden of proving that the preexisting condition exclusion applies to the condition for which a claim is being made. (b) After disclosure to the consumer, a pet insurer may issue policies that impose waiting periods upon commencement of coverage that do not exceed 30 days for illnesses or orthopedic conditions not resulting from an accident. A pet insurance policy shall not impose a waiting period for accidents. (1) A pet insurer utilizing a waiting period shall include a provision in its contract that allows the waiting period to be waived upon completion of a medical examination. A pet insurer may require the examination to be conducted by a licensed veterinarian after the purchase of the policy. (2) (A) A medical examination conducted pursuant to paragraph (1) shall be paid for by the policyholder, unless the policy specifies that the pet insurer will pay for the examination. (B) A pet insurer may specify elements to be included as part of the medical examination conducted pursuant to paragraph (1) and may require documentation of those elements, if those specifications do not unreasonably restrict an insured’s ability to waive the waiting period. (3) Waiting periods, and the requirements applicable to the waiting periods, shall be clearly and prominently disclosed to consumers before the policy purchase. (4) (A) Upon receipt of a complete application for coverage and valid payment information, a pet insurer shall issue coverage to be effective no later than 12:01 a.m. on the second consecutive day. (B) Notwithstanding subparagraph (A): (i) A pet insurer may elect to conduct individualized underwriting on a specific pet, in which case coverage shall be effective no later than 12:01 a.m. on the next day after the pet insurer has determined the pet is eligible for coverage. (ii) If pet insurance coverage is acquired by an individual through an employer or organization, the effective date of the pet insurance coverage may be postponed to align with the eligibility requirements, benefits effective date, or payment transmission date chosen by the employer or organization. (C) The date and time at which coverage becomes effective shall be prominently disclosed to the consumer. (D) For purposes of this paragraph, “individualized underwriting” may include examinations, tests, and any other diagnostic measures that the pet insurer may require, but shall not include any waiting or deferral periods. (c) A waiting period shall not be applied to a renewal of existing coverage. (d) A pet insurer shall not require a veterinary examination of the covered pet as a condition of policy renewal. (e) If a pet insurer includes any prescriptive, wellness, or noninsurance benefits in the policy form, then those benefits are made part of the policy contract and shall comply with all applicable laws and regulations for insurance policies. (f) A consumer’s eligibility to purchase a pet insurance policy shall not be based on participation, or lack of participation, in a separate wellness program. (Added by Stats. 2024, Ch. 612, Sec. 3. (SB 1217) Effective January 1, 2025.) - 12880.8. Verify source ↗
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 9. Pet Insurance [12880 - 12880.8] ( Part 9 added by Stats. 2014, Ch. 896, Sec. 1. )
Pet insurers and producers cannot market wellness programs as pet insurance, and if they sell a wellness program they must keep it separate from pet insurance in marketing, pricing, payments, terms, disclosures, and advertising.
## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 9. Pet Insurance [12880 - 12880.8] ( Part 9 added by Stats. 2014, Ch. 896, Sec. 1. ) ## 12880.8. (a) A pet insurer or producer shall not market a wellness program as pet insurance. Marketing materials for pet insurance shall be separate from marketing materials for wellness programs. (b) If a wellness program is sold by a pet insurer or producer, all of the following shall apply: (1) The seller shall clearly and conspicuously disclose during the sales process that the wellness program is not a regulated insurance product and that a pet owner may purchase pet insurance without having to purchase a wellness program. (2) The purchase or renewal of the wellness program shall not be a requirement to the purchase or renewal of pet insurance. (3) The costs of the wellness program shall be separate and identifiable from a pet insurance policy sold by the pet insurer or producer. (4) A payment transaction for pet insurance shall be separate from a payment transaction for a wellness program. (5) The terms and conditions for a wellness program shall be separate from the terms and conditions of a pet insurance policy sold by the pet insurer or producer. (6) Documents and correspondence provided to a consumer regarding a wellness program shall clearly identify the entity providing the wellness program. (7) The products or coverages available through the wellness program shall not duplicate products or coverages available through the pet insurance policy. (8) The advertising of the wellness program shall not be misleading or false and shall comply with this section. (c) Coverages included in the pet insurance policy contract described as “wellness” benefits are insurance. (d) (1) A wellness program sold by an insurer shall be deemed to be insurance. (2) Notwithstanding paragraph (1), a wellness program sold by an insurer shall not be deemed to be insurance if all of the following are true: (A) The wellness program services are provided by an entity other than an insurer. (B) The wellness program is marketed under the name of the entity providing wellness program services. (C) The wellness program does not constitute insurance pursuant to subdivision (e). (e) If a wellness program undertakes to indemnify a person against loss, damage, or liability arising from a contingent or unknown event, it is transacting insurance and is subject to this code. (Added by Stats. 2024, Ch. 612, Sec. 4. (SB 1217) Effective January 1, 2025.) - 12900. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Appointment, Qualification, and Offices [12900 - 12907] ( Chapter 1 enacted by Stats. 1935, Ch. 145. )
The insurance commissioner must be elected by the people, with the election held in the same time, place, and manner as the Governor, and the term limit is two four-year terms.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Appointment, Qualification, and Offices [12900 - 12907] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## 12900. (a) The commissioner shall be elected by the people in the same time, place, and manner as the Governor not to exceed two four-year terms. (b) Should a vacancy occur during the term of office, legislative confirmation shall be required for the position of commissioner in the same manner and procedure as that required by Section 5 of Article V of the California Constitution. (Amended by Stats. 1993, Ch. 1227, Sec. 4. Effective January 1, 1994. Note: This section was added on Nov. 8, 1988, by initiative Prop. 103.) - 12901. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Appointment, Qualification, and Offices [12900 - 12907] ( Chapter 1 enacted by Stats. 1935, Ch. 145. )
The commissioner must be qualified for the office, and the commissioner, deputies, and employees are barred from working for or having interests in insurers or licensees, with limited exceptions.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Appointment, Qualification, and Offices [12900 - 12907] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## 12901. The commissioner shall be a person competent and fully qualified to perform the duties of the office. Neither the commissioner nor any deputy or employee shall during the commissioner’s, deputy’s, or employee’s tenure of office be an officer, agent, or employee of an insurer or directly or indirectly interested in any insurer or licensee under this code, except (a) as a policyholder or (b) by virtue of relationship by blood or marriage to any person interested in any insurer or licensee. If the commissioner or any deputy or employee holds any license or permit issued under this code, that commissioner, deputy, or employee shall surrender it for cancellation within 10 days after appointment and qualification. Upon termination of the commissioner’s, deputy’s, or employee’s office or employment, that license or permit shall be reissued for the balance of the then current license or permit year without fee or penalty. (Amended by Stats. 2021, Ch. 50, Sec. 240. (AB 378) Effective January 1, 2022.) - 12902. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Appointment, Qualification, and Offices [12900 - 12907] ( Chapter 1 enacted by Stats. 1935, Ch. 145. )
The commissioner’s annual salary is set by another law in the Government Code.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Appointment, Qualification, and Offices [12900 - 12907] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## 12902. The annual salary of the commissioner is provided for by Chapter 6 of Part 1 of Division 3 of Title 2 of the Government Code. (Amended by Stats. 1951, Ch. 1613.) - 12903. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Appointment, Qualification, and Offices [12900 - 12907] ( Chapter 1 enacted by Stats. 1935, Ch. 145. )
The commissioner may hire certain assistants, clerks, and stenographic reporters, and may spend money for needed travel and other expenses. People hired under this section must do the work assigned to them, subject to civil service laws.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Appointment, Qualification, and Offices [12900 - 12907] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## 12903. The commissioner may employ actuarial, technical, and administrative assistants and clerks, as the commissioner may need to discharge in proper manner the duties imposed upon the commissioner by law. The commissioner may also employ stenographic reporters to take and transcribe the testimony in any formal hearing or investigation before the commissioner, deputy, or person authorized by the commissioner. Those employed persons shall perform the duties assigned to them by the commissioner, subject to the provisions of the civil service laws. The commissioner may incur traveling and other expenses as are necessary, convenient, or advisable for the performance of the commissioner’s duties. The provisions of this section shall not be deemed to affect or modify positions or seniority of officers or employees existing and held in the office of the commissioner immediately prior to the date this section takes effect, and all persons then serving in any capacity therein shall continue and remain in that capacity without change of position or seniority, subject to the provisions of the law regulating civil service in the same manner and to the same extent as prior to the date this section takes effect. (Amended by Stats. 2021, Ch. 50, Sec. 241. (AB 378) Effective January 1, 2022.) - 12903.1. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Appointment, Qualification, and Offices [12900 - 12907] ( Chapter 1 enacted by Stats. 1935, Ch. 145. )
The commissioner may not accept or benefit from certain travel payments or reimbursements tied to regulated sources or related private attorneys/law firms.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Appointment, Qualification, and Offices [12900 - 12907] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## 12903.1. (a) The commissioner may not accept, use, or in any manner benefit from payments or reimbursements made to the department for travel from any of the following: (1) A single source that is subject to regulation by the commissioner. (2) A private attorney or law firm that is under contract or is bidding on or under consideration for a contract to represent either the department or the commissioner in the commissioner’s official capacity. (3) A private attorney or law firm that seeks to be awarded, or has been awarded, advocacy fees under subdivision (b) of Section 1861.10. (4) A private attorney or law firm that has a client subject to regulation by the commissioner. (b) For purposes of this section, any payment or reimbursement provided by a representative of a person or entity subject to regulation by the commissioner shall be deemed to be provided by the regulated person or entity. (c) (1) The Attorney General or any other person within this state may bring a civil action for the violation of this section. The court may assess a civil penalty in the amount of three times the amount of the unlawful benefit or payment received by the commissioner. (2) An action under this subdivision shall be filed within five years of the date on which the violation occurred. If the commissioner engages in fraudulent concealment, the five-year period shall be tolled for the period of the concealment. For the purposes of this paragraph, “fraudulent concealment” means the commissioner knowingly concealed facts related to the commissioner’s travel expenditures or reimbursements. (Amended by Stats. 2021, Ch. 50, Sec. 242. (AB 378) Effective January 1, 2022.) - 12903.5. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Appointment, Qualification, and Offices [12900 - 12907] ( Chapter 1 enacted by Stats. 1935, Ch. 145. )
The Personnel Board may set higher compensation rates for insurance examiners who are working on examinations outside the state, if the commissioner recommends it.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Appointment, Qualification, and Offices [12900 - 12907] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## 12903.5. On the recommendation of the commissioner the Personnel Board may establish rates of compensation for insurance examiners engaged in examinations out of this State which are in excess of the rates based on the regular monthly salary ranges established for such examiners. (Amended by Stats. 1949, Ch. 173.) - 12904. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Appointment, Qualification, and Offices [12900 - 12907] ( Chapter 1 enacted by Stats. 1935, Ch. 145. )
The commissioner may buy reporting services, books, and reports to help administer insurance laws.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Appointment, Qualification, and Offices [12900 - 12907] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## 12904. In the administration of the provisions of this code and other insurance laws, the commissioner may purchase reports of financial and character reporting services, and other books and reports as in the commissioner’s opinion will aid in administration. (Amended by Stats. 2021, Ch. 50, Sec. 243. (AB 378) Effective January 1, 2022.) - 12905. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Appointment, Qualification, and Offices [12900 - 12907] ( Chapter 1 enacted by Stats. 1935, Ch. 145. )
The commissioner must maintain offices in Sacramento, Los Angeles, San Diego, and the San Francisco Bay area.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Appointment, Qualification, and Offices [12900 - 12907] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## 12905. The commissioner shall maintain offices in Sacramento, Los Angeles, San Diego, and the San Francisco Bay area. (Amended by Stats. 2018, Ch. 37, Sec. 44. (AB 1817) Effective June 27, 2018.) - 12906. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Appointment, Qualification, and Offices [12900 - 12907] ( Chapter 1 enacted by Stats. 1935, Ch. 145. )
The Department of Insurance is made an independent department and is under the control of the Insurance Commissioner.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Appointment, Qualification, and Offices [12900 - 12907] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## 12906. The governmental agency unit heretofore known as the Department of Insurance in the Business, Transportation and Housing Agency is hereby made an independent department. The Department of Insurance is under the control of the Insurance Commissioner. The removal from the Business, Transportation and Housing Agency of the Department of Insurance, effected by this section, shall not affect in any manner the deputies or employees of such governmental agency unit, except as otherwise provided by the act enacted in the 1990 portion of the 1989–90 Regular Session that amended this section, and, except as so provided, their employments and positions are hereby expressly continued in existence. The Insurance Commissioner is not a head of a department within the meaning of Sections 1061 and 11151 of the Government Code. (Amended by Stats. 1990, Ch. 1239, Sec. 5.) - 12907. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Appointment, Qualification, and Offices [12900 - 12907] ( Chapter 1 enacted by Stats. 1935, Ch. 145. )
The Governor appoints certain existing Department of Insurance positions, and those positions are exempt from the state civil service system.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Appointment, Qualification, and Offices [12900 - 12907] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## 12907. The following existing positions in the Department of Insurance shall be appointed by the Governor and are exempt from the state civil service system: (a) Chief executive officer. (b) Deputy commissioner for the office of the ombudsman. (c) Career executive assignment IV, in the administration and licensing services division. (Added by Stats. 2002, Ch. 1124, Sec. 38. Effective September 30, 2002.) - 12919. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. )
Communications to the insurance commissioner’s office about a certificate or license holder or applicant are treated as official confidence.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 12919. Communications to the commissioner or any person in the commissioner’s office in respect to any fact concerning the holder of, or applicant for, any certificate or license issued under this code are made to the commissioner in official confidence within the meaning of Sections 1040 and 1041 of the Evidence Code. Liability shall not exist and no action or proceeding shall lie for or on account of any communication or the making thereof, but the existence of the communication shall not be deemed to dispense with or nullify any requirement of notice, hearing, or production of evidence before the commissioner as otherwise required by law. (Amended by Stats. 2021, Ch. 50, Sec. 244. (AB 378) Effective January 1, 2022.) - 12920. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. )
The commissioner must decide whether required securities are sufficient and valid, and must require them to be supplemented or renewed if they are insufficient or invalid.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 12920. The commissioner shall determine the sufficiency and validity of all securities required to be given by persons engaged, or to be engaged, in insurance business, and shall cause such security to be supplemented or renewed in case of the insufficiency or invalidity thereof. (Enacted by Stats. 1935, Ch. 145.) - 12920.5. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. )
The commissioner must refuse any bond if, in the commissioner’s opinion, the principal and surety are affiliated in a way that could make one party’s insolvency affect the other’s solvency, or make that uncertain.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 12920.5. In addition to and independent of any and all other proper causes for refusal by the commissioner to approve or accept any bond filed or presented for filing with the commissioner under any provision of this code or other laws, the commissioner shall decline to approve, accept, or file any bond, if, in the commissioner’s opinion, the principal and the surety are affiliated in any manner whereby insolvency of the one party would affect the solvency of the other or whereby it is made uncertain whether or not that result might occur. (Amended by Stats. 2021, Ch. 50, Sec. 245. (AB 378) Effective January 1, 2022.) - 12921. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. )
The commissioner must carry out duties under insurance laws, may delegate certain settlement powers, may accept records electronically or on paper, and may not agree to certain settlement terms unless the code specifically allows it.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 12921. (a) The commissioner shall perform all duties imposed upon the commissioner by the provisions of this code and other laws regulating the business of insurance in this state, and shall enforce the execution of those provisions and laws. (b) In an administrative action to enforce the provisions of this code and other laws regulating the business of insurance in this state, any settlement is subject to all of the following: (1) The commissioner may delegate the power to negotiate the terms and conditions of a settlement to designated deputy commissioners. The commissioner may delegate the power to approve a settlement, unless the settlement involves any of the following: (A) An insurer. (B) A managing general agent or production agent that manages the business of an insurer. (C) A title company. (D) A home protection company. (E) An insurance adjuster whose claims practices are at issue. (F) An insurance agent or broker, or an applicant for an insurance agent or broker license, who has allegedly engaged in theft, fraud, or the misappropriation of premium or other funds in an amount that exceeds fifty thousand dollars ($50,000). (2) Unless specifically provided for in a provision of this code, the commissioner may not agree to any of the following: (A) That the respondent contribute, deposit, or transfer any moneys or other resources to a nonprofit entity. (B) That a respondent contribute, deposit, or transfer any fine, penalty, assessment, cost, or fee except to the commissioner for deposit in the appropriate state fund pursuant to Section 12975.7. (C) That the commissioner may or shall direct the transfer, distribution, or payment to another person or entity of any fine, penalty, assessment, cost, or fee. (D) The use of the commissioner’s name, likeness, or voice in any printed material or audio or visual medium, either for general distribution or for distribution to specific recipients. (3) The commissioner may only agree to payment to those persons or entities to whom payment may be due because of the respondent’s violation of a provision of this code or other law regulating the business of insurance in this state. (4) A settlement may only include the sanctions provided by this code or other laws regulating the business of insurance in this state, except that the settlement may include attorney’s fees, costs of the department in bringing the enforcement action, and future costs of the department to ensure compliance with the settlement agreement. (c) Notwithstanding any other law, the commissioner may accept documents submitted for filing or approval, process transactions, and maintain records in electronic form or as paper documents, and may adopt regulations to further this subdivision. (Amended by Stats. 2021, Ch. 50, Sec. 246. (AB 378) Effective January 1, 2022.) - 12921.1. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. )
The commissioner must create a complaints program by July 1, 1991, and insurers must give the department a designated contact person’s details and use any commissioner-established complaint system.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 12921.1. (a) The commissioner shall establish a program on or before July 1, 1991, to investigate complaints and respond to inquiries received pursuant to Section 12921.3, to comply with Section 12921.4, and, when warranted, to bring enforcement actions against insurers or production agencies, as those terms are defined in subdivision (a) of Section 1748.5. The program shall include, but not be limited to, the following: (1) A toll-free telephone number published in telephone books throughout the state, dedicated to the handling of complaints and inquiries. (2) Public service announcements to inform consumers of the toll-free telephone number and how to register a complaint or make an inquiry to the department. (3) A simple, standardized complaint form designed to assure that complaints will be properly registered and tracked. (4) Retention of records on complaints for at least three years after the complaint has been closed. (5) Guidelines to disseminate complaint and enforcement information on individual insurers to the public, that shall include, but not be limited to, the following: (A) License status. (B) Number and type of complaints closed within the last full calendar year, with analogous statistics from the prior two years for comparison. The proportion of those complaints determined by the department to require that corrective action be taken against the insurer, or leading to insurer compromise, or other remedy for the complainant, as compared to those that are found to be without merit. This information shall be disseminated in a fashion that will facilitate identification of meritless complaints and discourage their consideration by consumers and others interested in the records of insurers. (C) Number and type of violations found, by reference to the line of insurance and the law violated. For the purposes of this subparagraph, the department shall separately report this information for health insurers. (D) Number and type of enforcement actions taken. (E) Ratio of complaints received to total policies in force, or premium dollars paid in a given line, or both. Private passenger automobile insurance ratios shall be calculated as the number of complaints received to total car years earned in the period studied. (F) Any other information the department deems is appropriate public information regarding the complaint record of the insurer that will assist the public in selecting an insurer. However, nothing in this section shall be construed to permit disclosure of information or documents in the possession of the department to the extent that the information and those documents are protected from disclosure under any other provision of law. (6) Procedures and average processing times for each step of complaint mediation, investigation, and enforcement. These procedures shall be consistent with those in Article 6.5 (commencing with Section 790) of Chapter 1 of Part 2 of Division 1 for complaints within the purview of that article, consistent with those in Article 7 (commencing with Section 1858) of Chapter 9 of Part 2 of Division 1 for complaints within the purview of that article, and consistent with any other provisions of law requiring certain procedures to be followed by the department in investigating or prosecuting complaints against insurers or production agencies. (7) A list of criteria to determine which violations should be pursued through enforcement action, and enforcement guidelines that set forth appropriate penalties for violations based on the nature, severity, and frequency of the violations. (8) Referral of complaints not within the department’s jurisdiction to appropriate public and private agencies. (9) Complaint handling goals that can be tested against surveys carried out pursuant to subdivision (a) of Section 12921.4. (10) Inclusion in its annual report to the Governor, required by Section 12922, detailed information regarding the program required by this section, that shall include, but not be limited to: a description of the operation of the complaint handling process, listing civil, criminal, and administrative actions taken pursuant to complaints received; the percentage of the department’s personnel years devoted to the handling and resolution of complaints; and suggestions for legislation to improve the complaint handling apparatus and to increase the amount of enforcement action undertaken by the department pursuant to complaints if further enforcement is deemed necessary to ensure proper compliance by insurers or production agencies with the law. (b) The commissioner shall promulgate a regulation that sets forth the criteria that the department shall apply to determine if a complaint is deemed to be justified prior to the public release of a complaint against a specifically named insurer or production agency. (c) The commissioner shall provide to the insurer or production agency a description of any complaint against the insurer or production agency that the commissioner has received and has deemed to be justified at least 30 days prior to public release of a report summarizing the information required by this section. This description shall include all of the following: (1) The name of the complainant. (2) The date the complaint was filed. (3) A succinct description of the facts of the complaint. (4) A statement of the department’s rationale for determining that the complaint was justified that applies the department’s criteria to the facts of the complaint. (d) An insurer shall provide to the department the name, mailing address, telephone number, and facsimile number of a person whom the insurer designates as the recipient of all notices, correspondence, and other contacts from the department concerning complaints described in this section. The insurer may change the designation at any time by providing written notice to the Consumer Services Division of the department. (e) The commissioner may establish an Internet-accessible complaints response system to distribute and receive complaint information as described in subdivisions (a) and (c). Insurers shall be required to submit and receive complaint information, including, but not limited to, requested claim files, underwriting files, correspondence, and other supporting documents, using any system established by the commissioner pursuant to this subdivision. (f) For the purposes of this section, notices, correspondence, and other contacts with the designated person shall be deemed contact with the insurer. (Amended by Stats. 2016, Ch. 304, Sec. 20. (AB 2884) Effective January 1, 2017.) - 12921.15. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. )
The commissioner must prepare a written report on insurer complaint and enforcement information, and the department must make it available in several ways. The commissioner may also publish justified complaints about a production agency if appropriate.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 12921.15. (a) On or before July 1, 1999, the commissioner shall prepare a written report, to be made available by the department to interested individuals upon written request, that details complaint and enforcement information on individual insurers in accordance with guidelines established under paragraph (5) of subdivision (a) of Section 12921.1. The report shall be made available by mail through the department’s consumer toll-free telephone number and through the department’s Internet website and transmitted via electronic mail if the individual has the ability to obtain the report in this manner. No complaint information shall be included in the report required by this section that has not been provided to the insurer in accordance with subdivision (c) of Section 12921.1 (b) The commissioner may also, if deemed appropriate, publish the record of complaints against the production agency that have been determined by the department to be justified and that will assist the public in selecting a production agency. No complaint data shall be published that has not been provided to the production agency in accordance with subdivision (c) of Section 12921.1. (Amended by Stats. 2005, Ch. 312, Sec. 10. Effective January 1, 2006.) - 12921.2. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. )
Certain public records must be available for inspection and copying at specified department offices, and copy fees cannot exceed actual production cost.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 12921.2. All public records of the department and the commissioner subject to disclosure under Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code shall be available for inspection and copying pursuant to those provisions at the offices of the department in the City of Oakland, the City of Los Angeles, and the City of Sacramento. Adequate copy facilities for this purpose shall be made available. Notwithstanding any other law, a person requesting copies of these records shall receive the copies from employees of the department and the fee charged for the copies shall not exceed the actual cost of producing the copies. (Amended by Stats. 2022, Ch. 28, Sec. 119. (SB 1380) Effective January 1, 2023.) - 12921.3. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. )
The commissioner must handle complaints and inquiries about insurance claims, investigate complaints, and provide public education and information on insurance matters. The commissioner may also defer an investigation until related disputes or actions are final.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 12921.3. (a) The commissioner, in person or through employees of the department, shall receive complaints and inquiries, investigate complaints, prosecute insurers or production agencies when appropriate and according to guidelines determined pursuant to Section 12921.1, and respond to complaints and inquiries by members of the public concerning the handling of insurance claims, including, but not limited to, violations of Article 10 (commencing with Section 1861) of Chapter 9 of Part 2 of Division 1, by insurers or production agencies, or alleged misconduct by insurers or production agencies. (b) The commissioner shall not decline to investigate complaints for any of the following reasons: (1) The insured is represented by an attorney in a dispute with an insurer, or is in mediation or arbitration. (2) The insured has a civil action against an insurer. (3) The complaint is from an attorney, if the complaint is based upon evidence or reasonable beliefs about violations of law known to an attorney because of a civil action. (c) The commissioner may defer the investigation until the finality of a dispute, mediation, arbitration, or civil action involving the claim is known. (d) The commissioner, as he or she deems appropriate, and pursuant to Section 12921.1, shall provide for the education of, and dissemination of information to, members of the general public or licensees of the department concerning insurance matters. (Amended by Stats. 2005, Ch. 723, Sec. 9.5. Effective January 1, 2006.) - 12921.4. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. )
The commissioner must acknowledge certain written complaints within 10 working days and report final action within 30 days. The department must also send a complaint evaluation form with final-action notices.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 12921.4. (a) The commissioner shall, upon receipt of a written complaint with respect to the handling of an insurance claim or other obligation under a policy by an insurer or production agency, or alleged misconduct by an insurer or production agency, notify the complainant of the receipt of the complaint within 10 working days of receipt. Thereafter, the commissioner shall notify the complainant of the final action taken on that complaint within 30 days of the final action. The department shall include, with each notification of final action, or, at a minimum, with a number of randomly selected notifications of final action sufficient to assure the validity of results, a complaint handling evaluation form. This form shall clearly and concisely seek an evaluation of the department’s performance in handling the complainant’s grievance. The areas of evaluation shall include, but not be limited to: whether the complaint was handled in a fair and reasonable manner, evaluated thoroughly and without bias; the time required for resolution of the complaint; whether the complaint was referred and, if so, whether it was referred within a satisfactory time; whether the staff involved in handling the complaint demonstrated an adequate knowledge of the issues involved in the complaint; whether the complainant was satisfied with the result of the department’s intervention; and whether the complainant would recommend the department’s complaint handling services to others. The commissioner shall, if deemed appropriate, notify insurers or production agencies against whom the complaint is made of the nature of the complaint, may request appropriate relief for the complainant, and may meet and confer with the complainant and the insurer in order to mediate the complaint. This section shall not be construed to give the commissioner power to adjudicate claims. (b) The commissioner shall ascertain patterns of complaints by insurer, geographic area, insurance line, type of violation, and any other valid basis the commissioner may deem appropriate for further investigation, and periodically evaluate the complaint patterns to determine additional audit, investigative, or enforcement actions which may be taken by the commissioner, and report on all actions taken with respect to those patterns of complaints in the commissioner’s annual report to the Governor pursuant to Section 12922, and to the public. For the purposes of this subdivision, complaints mean those written complaints received by the commissioner under subdivision (a), and written complaints received by the commissioner from any other sources, alleging misconduct or unlawful acts by insurers or production agencies. (Amended by Stats. 2021, Ch. 50, Sec. 247. (AB 378) Effective January 1, 2022.) - 12921.5. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. )
The commissioner may meet with insurance-related persons and organizations, and may share information about California insurance laws to help the public and support enforcement.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 12921.5. The commissioner may in person or through employees of the division meet with persons, organizations and associations interested in insurance for the purpose of securing cooperation in the enforcement of the insurance laws of this State and may disseminate information concerning the insurance laws of this State for the assistance and information of the public. (Added by Stats. 1941, Ch. 379.) - 12921.6. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. )
The commissioner may set or add filing review fees in some cases, and people charged under this section can ask for reasonable substantiation of the fee.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 12921.6. (a) (1) If no fee is designated in this code for the review of filings required to be made pursuant to this code, the commissioner may establish a fee to permit the department to recover the actual cost of review of those filings. The fee so established shall not be increased by more than twenty-five dollars ($25), unless the increase is made by law. (2) If this code designates a fee for any required filing, which fee the commissioner determines to be inadequate to cover the actual cost of review, the commissioner may assess an additional fee pursuant to this section not to exceed 25 percent of the fee designated by the code for the filing. (3) Any person assessed a fee under this section shall be entitled, upon request, to receive reasonable substantiation from the department for the fee assessed, based upon the cost records of the department. (4) As used in this section, “filings” means those items which the insurers are required to file with the department or commissioner pursuant to this code. (b) The fee provided for by this section shall be assessed without regard to the requirements of Section 12978 as to uniformity of increase, but shall be based upon the actual cost to the department for the review of the filing. (c) As used in this section, “person” means any person or entity subject to examination by the commissioner, or purporting to do insurance business in this state, or in the process of organization with intent to do insurance business in this state, or from whom the commissioner’s certificate of authority is required for the transaction of business, or whose certificate of authority is revoked or suspended. (Added by Stats. 1988, Ch. 855, Sec. 3.) - 12921.7. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. )
Before submitting an emergency regulation to the Office of Administrative Law, the commissioner must mail advance notice to people, groups, or associations that previously asked for regulatory notices.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 12921.7. Notwithstanding any other provision of law, the following shall apply to the adoption by the commissioner of any regulation as an emergency regulation pursuant to subdivision (b) of Section 11346.1 of the Government Code. (a) At least 5 working days prior to submission of the emergency regulation to the Office of Administrative Law, the commissioner shall mail a notice of proposed emergency action to every person, group, or association who had previously filed a request for notice of regulatory actions with the commissioner. (b) The notice of proposed emergency action shall include the following: (1) A description of the problem and the necessity for the regulation. (2) A description of the justification for adoption of the regulation as an emergency regulation. (3) A copy of the text of the proposed emergency regulation. (Added by Stats. 1992, Ch. 793, Sec. 1. Effective January 1, 1993.) - 12921.8. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. )
The commissioner may issue cease and desist orders, impose monetary penalties, and conduct hearings and reviews under the Administrative Procedure Act for certain unlicensed activity and aiding or abetting it.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 12921.8. (a) The commissioner may do the following: (1) Issue a cease and desist order to a person who has acted in a capacity for which a license, registration, or certificate of authority from the commissioner was required but not possessed. (2) Issue a cease and desist order to a person who has aided or abetted a person described in paragraph (1). (3) Impose a monetary penalty, pursuant to an order to show cause, on a person described in paragraph (1) or (2). The monetary penalty shall be the greater of the following: (A) Five times the amount of money received by the person for acting in the capacity for which the license, registration, or certificate of authority was required but not possessed. (B) Five thousand dollars ($5,000) for each day the person acted in the capacity for which the license, registration, or certificate of authority was required but not possessed. In the absence of contrary evidence, it shall be presumed that a person continuously acted in a capacity for which a license, registration, or certificate of authority was required on each day from the date of the earliest such act until the date those acts were discontinued, as proven by the person at a hearing. (b) A person to whom a cease and desist order or order to show cause has been issued, may, within seven days after service of the order, if a hearing has not already been scheduled by the commissioner, request a hearing by filing a request for the hearing with the commissioner. The hearing shall be conducted in accordance with the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340), Chapter 4 (commencing with Section 11370), Chapter 4.5 (commencing with Section 11400), and Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), and the commissioner shall have all the powers granted therein. (c) A person who has a hearing pursuant to subdivision (b) shall be entitled to have the proceedings and the order of the commissioner reviewed by means of any remedy provided by the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340), Chapter 4 (commencing with Section 11370), Chapter 4.5 (commencing with Section 11400), and Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code). (Amended by Stats. 2023, Ch. 204, Sec. 17. (AB 1140) Effective January 1, 2024.) - 12921.9. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. )
Letters or legal opinions signed by the Commissioner or Chief Counsel and responding to an inquiry must be made public; the department may remove identifying details before publication.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 12921.9. (a) A letter or legal opinion signed by the Commissioner or the Chief Counsel of the Department of Insurance that was prepared in response to an inquiry from an insured or other person or entity and that discusses either generally or in connection with a specific fact situation the application of the Insurance Code or regulations promulgated by the commissioner shall be made public. The department may redact the name, address, policy number, and other identifying information regarding a particular insured or other person or entity from the letter or legal opinion when it is made public. (b) A letter or legal opinion made public pursuant to this section shall not be construed as establishing an agency guideline, criterion, bulletin, manual, instruction, order, standard of general application, rule, or regulation, as those terms are described in Sections 11340.5 and 11342.600 of the Government Code. (Added by Stats. 2001, Ch. 727, Sec. 16. Effective January 1, 2002.) - 12922. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. )
The commissioner must file an annual report by August 1 each year with specified insurance information and office revenue details.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 12922. The commissioner shall, on or before the first day of August in each year, make a report to the Governor, the Legislature, and to the committees of the Senate and Assembly having jurisdiction over insurance containing a tabular statement and synopsis of the reports which have been filed in the commissioner’s office and showing, generally, the condition of the insurance business and interests in this state, and other matters concerning insurance. The report shall also contain a detailed verified statement, of the moneys and fees of office received by the commissioner, and for what purpose. (Amended by Stats. 2021, Ch. 50, Sec. 248. (AB 378) Effective January 1, 2022.) - 12922.5. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. )
The commissioner must convene a working group to identify, assess, and recommend risk transfer market mechanisms focused on natural infrastructure and climate-risk reduction.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 12922.5. (a) The commissioner shall convene a working group to identify, assess, and recommend risk transfer market mechanisms that: (1) Promote investment in natural infrastructure to reduce the risks of climate change related to catastrophic events. (2) Create incentives for investment in natural infrastructure to reduce risks to communities. (3) Provide mitigation incentives for private investment in natural lands to lessen exposure and reduce climate risks to public safety, property, utilities, and infrastructure. (b) To the extent that the working group recommends risk transfer market mechanisms that would be provided by insurance and reinsurance companies, the working group shall recommend mechanisms that: (1) Are profitable to insurance and reinsurance companies. (2) If appropriate, apply to communities or regions, rather than individual land parcels. (c) The policies recommended pursuant to subdivisions (a) and (b) shall include all of the following questions: (1) What are the California analogies to examples in other countries for creating incentives for investment in natural infrastructure as part of insurance policies that mitigate elemental risks? (2) Can we use insurance to create incentives for wetland restoration to help defend the coast against storm surge? (3) Can we create incentives for forests to be managed to reduce the risk of major fires? (4) Can we reduce the exposure of insurance companies to climate change-related losses through innovative state policies or insurance pricing mechanisms that reward good behavior and charge premiums for actions that increase public safety risks or losses of property or environmental attributes? (5) Can we develop rating systems based on community risk factors to climate events, and use insurance incentives to make a community more resilient? (Amended by Stats. 2019, Ch. 497, Sec. 181. (AB 991) Effective January 1, 2020.) - 12923. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. )
The Insurance Commissioner must issue reasonable rules and regulations, after notice and hearing, to define when an actuary must sign certain filed documents and to carry out the statutory competence standard.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 12923. (a) With respect to all classes of insurance (1) to (20), inclusive, as defined in Sections 101 to 120, inclusive, “actuary,” for the purposes of this section, means either of the following: (1) A member of the American Academy of Actuaries. (2) An individual who has demonstrated by training and experience actuarial competence to the satisfaction of the Insurance Commissioner. (b) The commissioner shall, after notice and hearing, pursuant to Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, promulgate reasonable rules and regulations which do all of the following: (1) Describe the documents which must be signed by an actuary when the documents are filed with the commissioner. (2) Implement paragraph (2) of subdivision (a). (Amended by Stats. 1985, Ch. 106, Sec. 105.) - 12923.5. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. )
The Department of Managed Health Care and the Department of Insurance must maintain a joint working group, review specified codes and processes, report findings for approval, and file the approved final report annually for five years.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 12923.5. (a) The Department of Managed Health Care and the Department of Insurance shall maintain a joint senior level working group to ensure clarity for health care consumers about who enforces their patient rights and consistency in the regulations of these departments. (b) The joint working group shall undertake a review and examination of the Health and Safety Code, the Insurance Code, and the Welfare and Institutions Code as they apply to the Department of Managed Health Care and the Department of Insurance to ensure consistency in consumer protection. (c) The joint working group shall review and examine all of the following processes in each department: (1) Grievance and consumer complaint processes, including, but not limited to, outreach, standard complaints, including coverage and medical necessity complaints, independent medical review, and information developed for consumer use. (2) The processes used to ensure enforcement of the law, including, but not limited to, the medical survey and audit process in the Health and Safety Code and market conduct exams in the Insurance Code. (3) The processes for regulating the timely payment of claims. (d) The joint working group shall report its findings to the Insurance Commissioner and the Director of the Department of Managed Health Care for review and approval. The commissioner and the director shall submit the approved final report under signature to the Legislature by January 1 of every year for five years. (Added by Stats. 2002, Ch. 793, Sec. 2. Effective January 1, 2003.) - 12924. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. )
The insurance commissioner may compel testimony and document production through subpoenas, and witnesses generally cannot refuse on self-incrimination grounds.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 12924. (a) The commissioner may issue subpoenas and subpoenas duces tecum for witnesses to attend, testify, and produce documents before the commissioner, on any subject touching insurance business, or in aid of the commissioner’s duties. This process may be served, obeyed, and enforced as provided in the Code of Civil Procedure for civil cases. A defaulting witness may, upon application by the commissioner to the superior court, be required by order of the court to appear before the commissioner to testify as the court may order. The court may punish disobedience of its order as a contempt of court. All the provisions of the Code of Civil Procedure relating to means of production of evidence shall be applicable to any hearing or investigation under this section. The provisions of this subdivision shall not apply to proceedings required by other provisions of this code to be conducted in accordance with Chapter 5 (commencing with Section 11500), Part 1, Division 3, Title 2 of the Government Code. (b) A person shall not be excused from testifying or from producing any book, document, or other thing under the person’s control upon any hearing or investigation on the ground that the person’s testimony, or the book, document, or other thing required, may tend to incriminate the person, or may have a tendency to subject the person to punishment for a felony or misdemeanor; but no individual shall be prosecuted or be subjected to punishment for a felony or misdemeanor for or on account of any act, transaction, matter, or thing concerning which that individual is so compelled, after validly claiming the privilege against self-incrimination, to testify or produce, except for perjury or contempt committed in that testimony. (Amended by Stats. 2021, Ch. 50, Sec. 249. (AB 378) Effective January 1, 2022.) - 12925. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. )
The commissioner must keep a permanent full record of the commissioner’s proceedings, including a concise statement of the condition of each examined insurer, surplus line broker, or motor club.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 12925. The commissioner shall keep and preserve in a permanent form a full record of the commissioner’s proceedings, including a concise statement of the condition of each insurer, surplus line broker, or motor club examined as to their condition and affairs. (Amended by Stats. 2021, Ch. 50, Sec. 250. (AB 378) Effective January 1, 2022.) - 12926. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. )
The commissioner must require every insurer to fully comply with this code.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 12926. The commissioner shall require from every insurer a full compliance with all the provisions of this code. (Enacted by Stats. 1935, Ch. 145.) - 12926.1. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. )
Funds from fines, penalties, settlements, and related amounts must be deposited and, if used for public outreach, tightly limited; the commissioner’s name or likeness generally cannot be used without court good cause, and the commissioner may not raise insurer fees or assessments to comply.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 12926.1. (a) In any matter involving compliance with or enforcement of any of the provisions of this code or the other laws of this state involving any entity subject to the jurisdiction or authority of the commissioner, whether the matter is a formal administrative accusation or adjudication, a formal or potential judicial action, or other enforcement tool, and whether or not the matter is settled or prosecuted to resolution, the use of any funds that are imposed as fines or penalties of any sort, or collected by means of settlement, or paid or reserved in any manner as a result of the action, shall be subject to the limitations of this section. (b) Fines, penalties, fees, and costs shall be deposited in the appropriate fund as provided by law. (c) Any funds ordered, or allocated by a settlement, to be used for public outreach of any sort, shall be subject to all of the following limitations: (1) The commissioner’s name, likeness, or voice shall not be used in any printed, audio, or visual material that is released either for general distribution or to specific recipients unless a court finds good cause to do so. (2) The message shall be limited to information relevant to the enforcement action or compliance issues that generated the funds. (3) The primary focus of any public outreach where the purpose is to advise members of the public of rights affecting pecuniary or property interests shall be to provide specific information needed by the affected persons to obtain or protect those rights. (4) No funds subject to this subdivision shall be used for general education of the public about insurance issues, except to the extent that the education relates to the type of violations that caused the enforcement or compliance action, and otherwise complies with the limitations of this section. (5) No funds subject to this subdivision shall be spent or otherwise disposed of unless the expenditure or disposal has been approved by a court of competent jurisdiction. (d) (1) This section may be enforced by an affected individual with an interest in the matter or a policyholder of an insurer that is a party to a settlement with the department, a city attorney, a district attorney, or the Attorney General, who may bring an action against the commissioner in the superior court in any county where a violation of this section has occurred. (2) A court may issue injunctions or provide other equitable remedies as appear to the court to be appropriate, and shall order payment by the commissioner from nonpublic funds to a prevailing party who has brought an action under this section of an amount sufficient to compensate the party for all attorneys’ fees, costs of litigation, and expenses incurred in bringing and prosecuting the action. For the purposes of this section, “nonpublic funds” does not include assets of an insurer or other party to a settlement that are not part of a valid and voluntary settlement with the department or commissioner. (e) The commissioner may not increase fees or assessments against insurers in order to comply with this section. (Added by Stats. 2000, Ch. 1089, Sec. 1. Effective January 1, 2001.) - 12926.2. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. )
This section defines “extraordinary circumstances” and limits how they can be referenced in settlement agreements, unless the agreement states the exact time period involved.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 12926.2. (a) As used in this section, “extraordinary circumstances” means circumstances outside of the control of a licensee that severely and materially affect the licensee’s ability to conduct normal business operations. (b) In determining noncompliance with this code and regulations adopted pursuant to this code, and appropriate penalties, if any, the commissioner may consider evidence concerning the existence of extraordinary circumstances. (c) A settlement agreement between the commissioner and an insurer may not contain a provision referencing the existence of extraordinary circumstances relative to the subject matter at issue, unless the agreement specifies the precise period of time during which extraordinary circumstances were in existence. Except as provided in subdivision (d), extraordinary circumstances may not be stated to exist for a duration of more than six months. (d) A settlement agreement may concede the existence of extraordinary circumstances for a period of time exceeding six months if all of the following conditions are met: (1) The commissioner makes a finding in the agreement that extraordinary circumstances existed for more than six months, and documents in that finding facts supporting that conclusion. (2) The finding identifies the public purpose justifying the extension of extraordinary circumstances beyond the six-month period. (3) The beginning and ending date, by month and year, of the commencement and termination of the extraordinary circumstances are identified. (Added by Stats. 2001, Ch. 727, Sec. 17. Effective January 1, 2002.) - 12927. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. )
When the code requires the commissioner or insurers to make statements, estimates, percentages, payments, or calculations, they must use lawful money of the United States.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 12927. All statements, estimates, percentages, payments, and calculations, required by this code to be made, either by the commissioner or insurers, shall be made on the basis of lawful money of the United States. (Enacted by Stats. 1935, Ch. 145.) - 12928. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. )
If the commissioner learns that an insurer, its agents, officers, employees, or any other person has violated penal provisions of the code or other laws, the commissioner must certify the facts to the county district attorney.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 12928. Whenever the commissioner ascertains that any insurer or any of its agents, officers or employees or any other person is guilty of violating any of the penal provisions of this code or of other laws he shall certify the facts of the violation to the district attorney of the county in which such offense was committed. (Enacted by Stats. 1935, Ch. 145.) - 12928.5. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. )
The Insurance Commissioner may order an insurance contract canceled, notify the insured, bar certain insurance activity for up to five years, and suspend, revoke, or deny licenses or certificates of authority for violations.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 12928.5. Whenever facts exist by reason of which, under any provision of this code, or other laws the commissioner may suspend, revoke, or deny any license or certificate of authority granted under any provision of this code, if the making or maintenance in force of a contract of insurance is one of the circumstances out of which facts arise, or, if, by reason of the existence of those facts, or in connection therewith a contract of insurance is made or maintained in force, the commissioner may, in lieu of or in addition to, the suspension, revocation, or denial of license or certificate, by order require the immediate cancellation of the contract, unless the contract, by its terms, is not subject to cancellation by the insurer and the insured did not knowingly participate in the wrongful acts. The commissioner may also notify the insured, stating the reason why the cancellation was required. In such a case, whether or not the particular contract is thus required to be canceled or is subject to cancellation, the commissioner may order the insurer, insurance agent, broker, solicitor, surplus line broker, or life agent soliciting, negotiating, or effecting the insurance to refrain from effecting insurance upon the property, risk, or insured under the contract for not exceeding five years from the date of the order. The commissioner may suspend or revoke, or deny an application for, any license or certificate of authority granted under any provision of this code to any applicant or licensee violating any order issued by the commissioner pursuant to this section. (Amended by Stats. 2021, Ch. 50, Sec. 251. (AB 378) Effective January 1, 2022.) - 12928.6. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. )
The commissioner may sue in superior court to stop violations and may seek enforcement of restitution, monetary penalty, or cost orders. The clerk must enter a judgment within five court days if the stated requirements are met.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 12928.6. (a) Whenever the commissioner believes, from evidence satisfactory to the commissioner, that a person is violating or about to violate this code or an order or requirement of the commissioner issued or promulgated pursuant to authority expressly granted the commissioner by this code or by law, the commissioner may bring an action in the name of the people of the State of California in the superior court of the State of California against the person to enjoin that person from continuing the violation or engaging therein or doing any act in furtherance thereof. In that action, an order or judgment may be entered awarding the preliminary or final injunction as is proper. (b) (1) The commissioner may apply to the clerk of the superior court for a judgment to enforce an order requiring a person to pay restitution, a monetary penalty, or reimburse the department for costs incurred by the department in prosecuting a matter. The commissioner’s application shall include a certified copy of the order and any associated decision. (2) Subject to the requirements of paragraph (3), the order and decision shall constitute a sufficient showing to warrant issuance of a judgment in the amount ordered by the commissioner, plus interest. The clerk of the court shall accordingly enter a judgment within five court days. (3) For an order to qualify for a judgment pursuant to this section, the application shall be accompanied by a declaration given by the legal counsel for the commissioner affirming on information and belief that a petition for mandamus or other legal action for relief from the order has either been denied, or the time for the filing of a petition or action has lapsed. (4) A judgment entered under this section has the same force and effect as, and is subject to all the laws relating to, a judgment in a civil action, and may be enforced in the same manner as any other judgment of the court in which it is entered. (Amended by Stats. 2022, Ch. 540, Sec. 1. (SB 1040) Effective January 1, 2023.) - 12928.7. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. )
The commissioner may order restitution, and sometimes rescission, against a respondent when the legal conditions in this section are met.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 12928.7. (a) The commissioner may order a respondent to provide restitution for a loss arising from the respondent’s conduct. If the facts and equity permit, with a restitution order, the commissioner may issue an order of rescission enforceable on any person subject to the commissioner’s jurisdiction. (b) A restitution order under this section shall meet all of the following requirements: (1) The respondent shall be subject to the commissioner’s jurisdiction. (2) The restitution order shall be ancillary to another proceeding authorized by this code in which the commissioner does both of the following: (A) Determines the respondent violated this code or the standards of conduct applicable to persons acting in the capacity the respondent was acting in or purporting to act in when the loss occurred. (B) Issues an order imposing a cease and desist order, an order for a monetary penalty, or another sanction with respect to the respondent’s conduct. (3) The restitution order shall cite the factual basis for the restitution order. (4) The restitution order shall state the persons, or classes of persons, who suffered a loss. (5) The restitution order shall state the amount to be paid or property to be returned as restitution. (c) A rescission or restitution order shall be subject to judicial review in the same manner and at the same time as the order to which it is ancillary. (d) A rescission or restitution order may be judicially enforced in an action brought by the commissioner, the Attorney General, a district attorney, a city attorney, or any person owed restitution pursuant to the order. In that action, the court may award attorney’s fees and court costs to a prevailing plaintiff. (e) This section does not apply to an insurer authorized to transact business in this state or to a placement of insurance with an insurer that was in compliance with Section 1765.1 or 1765.2 at the time of the placement. This section does not apply to a person with respect to acts within the scope of a license issued under Chapter 5 (commencing with Section 1621), Chapter 5A (commencing with Section 1759), or Chapter 6 (commencing with Section 1760) of Part 2 if the person holds that license at the time of those acts or at the time an initial pleading seeking restitution is issued. (f) The commissioner may order a respondent who is ordered to provide restitution pursuant to this section to reimburse the commissioner for the commissioner’s costs of implementing and enforcing this section, including attorney’s fees. The commissioner shall not credit any funds received from a respondent towards payment of a monetary penalty until restitution has been tendered to all persons to whom restitution is owed, or to the commissioner on their behalf, as required by a restitution order. (g) This section does not limit or restrict actions, remedies, or procedures otherwise available to the commissioner, the department, or any person pursuant to an administrative or civil action to enforce any law. It is not a defense in an administrative or civil action that the commissioner did not order a person to pay restitution. (h) This section does not expand, limit, or otherwise affect the commissioner’s authority to seek or to have sought restitution, refunds, or penalties against insurers, except as expressly provided. (i) As used in this section, “restitution” means the full amount that will compensate each person for their direct and indirect financial and nonfinancial losses proximately caused by the respondent’s violations. (j) Money received by the commissioner for distribution to persons as restitution pursuant to this section or Section 12928.6 or 12976 shall be deposited into the Insurance Fund. (Added by Stats. 2022, Ch. 540, Sec. 2. (SB 1040) Effective January 1, 2023.) - 12929. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. )
The insurance commissioner may correct the commissioner’s own records and orders within six months, if the correction is fair and the error came from mistake or similar excusable causes.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 12929. Irrespective of any provision in any law of this state the commissioner, pursuant to this code, has been and is authorized to correct: by amendment, by partial deletion, or by partial addition, any record, finding, determination, order, rule, or regulation made by the commissioner upon becoming satisfied that it is fair, just, and equitable to make the correction and that any record, finding, determination, order, rule, or regulation would have included the correction except for mistake, clerical error, inadvertence, surprise, or excusable neglect. The correction shall only be made within a period of six months following the original action. When the facts are within the commissioner’s personal knowledge, the commissioner may, upon the commissioner’s own motion and ex parte, enter an order making the correction. Otherwise the commissioner shall enter an order of correction only after receipt and consideration of a written petition of a person described in Section 12923 or an employee of the Department of Insurance, accompanied in either case by a sworn affidavit of the facts constituting the mistake, clerical error, inadvertence, surprise, or excusable neglect relied upon to justify the correction requested. In such case the order may be made ex parte. In either case the order shall recite the grounds and bases for the correction and shall be promptly given the same distribution, publicity, and circulation as was given the matter being corrected. If, within 60 days following the making of the order of correction anyone objects thereto in writing, the commissioner shall set the matter for hearing, giving the same notice thereof, if any, as was given to the proceeding which gave rise to the original record, finding, determination, order, rule, or regulation. (Amended by Stats. 2021, Ch. 50, Sec. 253. (AB 378) Effective January 1, 2022.) - 12930. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. )
The commissioner must give any district attorney certified copies of the commissioner’s papers or records for evidence purposes, without charge to the county.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 12930. Offenses under this code, or under other laws relating to insurers, shall be prosecuted and tried in all respects as provided in the Penal Code for public offenses. For the purpose of evidence the commissioner shall furnish to any district attorney, without cost to the county, certified copies of any papers or records of the office of the commissioner. (Enacted by Stats. 1935, Ch. 145.) - 12931. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. )
This section lets certain plaintiffs serve legal papers on the Insurance Commissioner instead of the usual recipient, but only in listed situations and only if the required copies, fee, mailings, and filings are completed.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 12931. (a) Service of legal process, notices, or other papers described in or referred to by Section 1452, 1605, 1610, 1612, 11104, or 11105 may be made upon the commissioner in the instances enumerated in this section and under the circumstances prescribed in this section by delivering to the commissioner, the commissioner’s deputy, or the commissioner’s designated agent for service of process two copies thereof for each person or party defendant so served accompanied by payment of a substituted service fee as determined pursuant to Section 12978 for each person or party, and by complying with the other provisions of this section. (b) The situations under which such service may be so made and the circumstances under which these provisions apply are: (1) Where for any reason the person desiring to have service so made elects to serve the commissioner instead of the attorney in fact, as stipulated pursuant to Section 1323, of a reciprocal or interinsurance exchange, domestic, foreign, admitted, or nonadmitted. (2) Where service is to be made on an admitted foreign or alien insurer, when service cannot be made on the principal statutory agent of such insurer duly appointed pursuant to Article 3 (commencing with Section 1600) of Chapter 4 of Part 2 of Division 1 for reasons specified in Section 1604 or otherwise recognized by law. (3) In actions against nonadmitted insurers, including nonadmitted fraternal benefit societies and reciprocals, under the circumstances described in Article 4 (commencing with Section 1610) of Chapter 4 of Part 2 of Division 1. This provision shall not apply to actions brought under insurance policies or certificates issued by nonadmitted insurers placed by surplus line brokers or special lines surplus line brokers where such insurance contract names a resident of this state as agent for service of process. (4) In actions involving admitted and formerly admitted fraternal benefit societies as described in Section 11104. (c) Upon receipt of two copies of the process, notice, or papers to be served and the fee above prescribed, the commissioner shall promptly mail one of the copies by certified mail (or by registered mail if it is addressed to an area outside of the United States where certified mail service is not available) to the defendant or person to be served at the last principal place of business of the defendant or person to be served, known to the commissioner by the commissioner’s official records in the case of a licensee; otherwise, in the case of a nonadmitted insurer, to its last principal place of business known to the commissioner from national directories or reference books or other reliable information available in the commissioner’s office. The commissioner shall keep a record of all services made upon the commissioner pursuant to this section. The other copy of the process, notice, or papers shall be retained among the commissioner’s official public records for a period not to exceed two years, absent special circumstances which in the commissioner’s judgment compel longer retention. (d) Service made in the manner provided for in this section is valid and sufficient and gives jurisdiction over the person of a nonadmitted or unauthorized defendant, provided notice of such service and a copy of the process, notice, or papers being served are sent within 10 days thereafter by certified mail (or by registered mail if it is addressed to an area outside of the United States where certified mail service is not available) by plaintiff or plaintiff’s attorney to the defendant at its last known principal place of business, and the receipt or the receipt of defendant’s agent for such copy, showing the name of the sender and the name and address of the addressee-defendant thereon, and the affidavit of plaintiff or plaintiff’s attorney showing compliance with this section, are filed with the clerk of the court in which such action is pending on or before the date the defendant is required to appear, or within further time as the court may allow. In case of service made pursuant to this section upon a licensee of the commissioner required by law to keep the licensee’s current business address or that of its agent for service of process on file with the commissioner, the service shall be valid if the commissioner mailed, postage prepaid, a copy of the process, notice, or papers to the defendant or licensee intended to be served to the licensee’s current address as shown by the commissioner’s records, or, in the case of an insurer, to its manager, president, or secretary, and an affidavit of compliance by plaintiff or plaintiff’s attorney at law is made and filed at the place and within the time mentioned in this subdivision. (e) A plaintiff or complainant shall not be entitled to a judgment by default in any action, suit, or proceeding in which service of process is effected in the manner provided in this section until the expiration of 30 days from the date on which the affidavit of compliance is filed. (f) This section does not limit or abridge the right to serve any process, notice, papers, or demand upon any insurer in any other manner now or hereafter permitted by law. (Amended by Stats. 2024, Ch. 444, Sec. 8. (SB 577) Effective January 1, 2025.) - 12935. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. )
The commissioner must create and provide certain insurance information sheets in Spanish and Vietnamese, and those sheets must include a prominent disclaimer.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 12935. (a) The commissioner, by January 1, 1997, shall develop and make available to the general public, in the two most common non-English languages spoken in the state, which are Spanish and Vietnamese, informational sheets that provide a general explanation in those languages, of the terms most commonly used in passenger automobile and pickup truck liability insurance policies. (b) These informational sheets are intended to provide only the general explanation of these insurance terms, and in the case of a dispute between an insurer and an insured, the policy as written in English will prevail. The development of informational sheets or the use of these informational sheets by insureds, insurers, agents, brokers, or the state shall not be interpreted as creating a duty or obligation to provide additional information or insurance policies in a non-English language. (c) An informational sheet developed by the commissioner shall include a disclaimer, prominently displayed in 24-point type print at the beginning of the informational sheet, in the non-English language, that contains all of the following information: (1) The informational sheet is for informational purposes only. (2) The actual terms of an insurance policy prevail over the information provided in the informational sheet. (3) In the case of a dispute, the insurance policy is controlling and a court will rely on the policy as it is written in English to resolve the dispute. (4) The policy is the sole source of rights and obligations of the insurer and the insured. (5) The information contained in the informational sheets does not create rights or obligations on the part of the insured, the insurer, the agent, the broker, or the state. (6) The informational sheet is not intended to be a substitute for the actual policy written in English. (d) The commissioner may develop informational sheets regarding other forms of insurance. (e) The commissioner may develop informational sheets in foreign languages, other than Spanish and Vietnamese, as needed. (f) Once developed by the commissioner, he or she may produce public service announcements concerning the availability of these informational sheets, to be utilized in those communities that the commissioner deems would benefit from the information. (g) This section does not prevent an insurer or licensee from advertising an insurance policy, or the availability of a foreign language informational sheet, or the availability of a translation of an insurance policy, in a language other than English if the advertisement clearly states that the insurance policy is only available in English. However, in the case of a dispute, the insurance policy is controlling and any of those advertisements for insurance policies, informational sheets, or translations shall not be construed to modify or change the insurance policy. (Added by Stats. 1995, Ch. 909, Sec. 2. Effective January 1, 1996.) - 12936. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. )
Escheated insurance funds must be transferred to the General Fund for loan repayment, and certain valid policyholder claims for escheated rebates may be paid by the Controller.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 12936. (a) (1) Escheated funds deposited in the Insurance Fund pursuant to subdivision (a) of Section 1523 of the Code of Civil Procedure shall be transferred to the General Fund on June 30, 1998, to repay the principal and interest on the General Fund loan provided pursuant to Item 0845-001-0001 of the Budget Act of 1996, and such funds are hereby continuously appropriated for that purpose. (2) If the Director of Finance determines that funds subject to escheat for the 1997–98 fiscal year are insufficient to repay the General Fund loan plus the interest owed, funds subject to escheat in the 1998–99 fiscal year, up to the amount necessary to repay the General Fund loan plus the interest owed, shall be available for expenditure by the commissioner to repay the principal and interest on the General Fund loan. Notwithstanding the loan repayment date specified in Item 0845-001-0001 of the Budget Act of 1996, such a determination by the Director of Finance shall trigger an extension of the loan repayment date to June 30, 1999. (b) A policyholder who was entitled to a rebate pursuant to settlement or order of the commissioner and who has not received the escheated rebate may submit a claim to the Controller. The Controller shall pay the claim from among the Proposition 103 refunds that have escheated to the state and been deposited in the Unclaimed Property Fund upon verification that the claim is valid. (Amended by Stats. 1998, Ch. 963, Sec. 3. Effective September 29, 1998.) - 12937. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. )
The commissioner may use escheated Insurance Fund money for certain expenses, must pay valid claims from that fund, and a qualified policyholder may file a claim.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 12937. (a) Escheated funds deposited in the Insurance Fund pursuant to subdivision (b) of Section 1517 of the Code of Civil Procedure shall be available for expenditure by the commissioner to fund proceedings and to pay expenses on nonasseted estates for which liabilities have been or will be incurred. (b) A policyholder who was entitled to funds described in subdivision (a) pursuant to an order of distribution and who has not previously received an appropriate distribution may submit a claim to the commissioner. The commissioner shall pay the claim from the escheated funds deposited in the Insurance Fund pursuant to subdivision (a) upon verification that the claim is valid. (c) The department shall not be required to conduct outreach programs to attempt to locate policyholders described in subdivision (b). (Added by Stats. 1996, Ch. 187, Sec. 5. Effective July 19, 1996.) - 12938. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. )
The department must publish specified market conduct examination information, keep it current, and redact identifying or privileged policyholder information.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Generally [12919 - 12938] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 12938. Notwithstanding any other provision of law, the department shall make available for public inspection and publish on its Internet Web site all of the information described in subdivisions (a) and (b). This information shall be maintained in a current, up-to-date condition. All identifying and privileged information regarding individual policyholders shall be redacted from documents available for public inspection and on the Internet Web site. (a) All fully executed stipulations, orders, decisions, settlements, or other forms of agreement resolving market conduct examinations, whether the examinations were finalized, terminated, or suspended, that pertain to unfair or deceptive practices in the business of insurance as defined in Section 790.03. (b) (1) Every adopted report of a market conduct examination of unfair or deceptive practices in the business of insurance as defined in Section 790.03 that is adopted as filed, or as modified or corrected, by the commissioner pursuant to Section 734.1. (2) The commissioner upon adopting the report shall transmit a copy of the report, either electronically or by certified United States mail, to a representative that the examined insurer designated by that insurer to receive the report, or in the case of an examination of more than one insurer in an insurer group, to a single representative of the group designated to receive the report on behalf of all examined insurers. Within 20 business days after the transmittal, the examined insurer may submit comments to the commissioner relating to the adopted report. The comments shall be in a form and length as provided by regulation. (3) Twenty business days after the transmittal the commissioner shall publish on the department’s Internet Web site the adopted report and any comments submitted by the examined insurer unless a court of competent jurisdiction has stayed the publication of the report. (c) This section may not be construed to require the disclosure of company workpapers or other company documents discovered during the course of an examination or any preliminary report of the examination, except as otherwise permitted by law. (Amended by Stats. 2011, Ch. 411, Sec. 58. (AB 1416) Effective January 1, 2012.) - 12939. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1.1. The California Community Development Financial Institution Tax Credit Program [12939 - 12939.2] ( Article 1.1 added by Stats. 2006, Ch. 580, Sec. 1. )
The Legislature states that California should use tax credits to encourage more private investment in community development financial institutions (CDFIs).
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1.1. The California Community Development Financial Institution Tax Credit Program [12939 - 12939.2] ( Article 1.1 added by Stats. 2006, Ch. 580, Sec. 1. ) ## 12939. The Legislature finds and declares all of the following: (a) There are specialized financial institutions in California that are specifically dedicated to, and whose core purpose is to, provide financial products and services to people and communities underserved by traditional financial markets and to support renewable energy projects, energy efficiency improvements, economic development, and affordable housing in these communities. These community development financial institutions or CDFIs seek to bridge the growing gap that exists between the financial products and services, renewable energy generation, energy efficiency improvements, economic development, and affordable housing available to the economic mainstream and those offered to low-income people and communities, as well as the nonprofit institutions that serve them. In addition, they serve a critical role in addressing issues of poverty and access to credit in economically disadvantaged communities by providing services, including, but not limited to, credit counseling to consumers, financial literacy training, home ownership counseling, entrepreneurial education, and technical assistance to small business owners. (b) These mission-driven financial institutions require additional capital in order to expand their ability to provide financial products and services, and to promote needed renewable energy generation projects, energy efficiency improvements, economic development, and affordable housing for low-income individuals and communities, and the businesses and nonprofit agencies that serve them. For example, some offer responsible alternatives to high-cost check-cashing services and payday lenders that have moved into low-income communities. Others help finance small businesses, affordable housing, and community services and facilities that, in turn, help stabilize low-income neighborhoods and alleviate poverty. (c) In carrying out their mission, funding community development is given priority over providing high returns to investors. (d) It is the intent of the Legislature to provide an incentive in the form of California tax credits to attract much needed additional private capital investments that would not otherwise be available to CDFIs without the benefit of such incentive. It is the expectation of the Legislature that CDFIs will leverage these new investment dollars for the direct benefit of economically disadvantaged communities and low-income people in California. (Amended by Stats. 2010, Ch. 418, Sec. 4. (AB 1011) Effective January 1, 2011.) - 12939.1. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1.1. The California Community Development Financial Institution Tax Credit Program [12939 - 12939.2] ( Article 1.1 added by Stats. 2006, Ch. 580, Sec. 1. )
The department, COIN, or a successor must require certain CDFIs to submit reports, may set the report format, and must include program information in a biennial report. The Legislative Analyst must also prepare a specified analysis by December 31, 2010.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1.1. The California Community Development Financial Institution Tax Credit Program [12939 - 12939.2] ( Article 1.1 added by Stats. 2006, Ch. 580, Sec. 1. ) ## 12939.1. (a) The department, California Organized Investment Network (COIN), or any successor thereof, shall require the CDFIs receiving tax credit investments pursuant to Sections 12209, 17053.57, and 23657 of the Revenue and Taxation Code to submit reports to the department, COIN, or any successor thereof, on their use of the program and may specify by notice to those CDFIs the form, content, and manner of the reports. (b) Biennially the department, COIN, or any successor thereof, shall include in the report required by Section 12922, information on the CDFI tax credit program based on the reports submitted by the CDFIs pursuant to subdivision (a). (c) On or before December 31, 2010, the Legislative Analyst shall prepare an analysis, based upon data provided by the Franchise Tax Board, the Department of Insurance, and COIN, to the Legislative Analyst on or before September 30, 2010, of the tax credit investments provided for in Sections 12209, 17053.57, and 23657 of the Revenue and Taxation Code, including, but not limited to, the credits’ fiscal impact, what programs, projects, and other uses were funded or carried out by the CDFIs that were supported in whole or in part by the tax credit investments, and the resulting benefits to economically disadvantaged communities and low income people in California. (Added by Stats. 2006, Ch. 580, Sec. 1. Effective September 28, 2006.) - 12939.2. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1.1. The California Community Development Financial Institution Tax Credit Program [12939 - 12939.2] ( Article 1.1 added by Stats. 2006, Ch. 580, Sec. 1. )
The commissioner may create and appoint an advisory board, and the board must have specified members, elect its own chair and vice chair, meet at least three times a year, and carry out listed advisory duties.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1.1. The California Community Development Financial Institution Tax Credit Program [12939 - 12939.2] ( Article 1.1 added by Stats. 2006, Ch. 580, Sec. 1. ) ## 12939.2. (a) The commissioner may establish and appoint a California Organized Investment Network Advisory Board. (b) For purposes of this section, all of the following shall apply: (1) “Commissioner” means the Insurance Commissioner of this state. (2) “Board” means the California Organized Investment Network Advisory Board. (3) “Licensed attorney” means an attorney who resides in this state who has successfully passed the California bar examination and has been admitted to practice in this state or has otherwise been licensed to practice law in this state by the State Bar of California. (c) The board shall include the commissioner, or the commissioner’s designee, three executives in the insurance investment industry, and one volunteer from each of the following categories: (1) A licensed attorney practicing insurance law. (2) A member of the public, appointed by the Speaker of the Assembly. (3) A member of the public, appointed by the Senate Committee on Rules. (4) A member of a consumer advocacy group. (5) An affordable housing practitioner. (6) A local economic development practitioner. (7) A member of a financial institution or a community development financial institution. (8) A representative with experience seeking investments for underserved or low-to-moderate-income or rural communities. (9) A representative with experience seeking investments that provide environmental benefits. (d) The board shall elect, from among its members, a chair and vice chair. (e) The term of each member shall be for two years. (f) The board shall have all of the following powers and duties: (1) To advise the California Organized Investment Network, or its successor, on the best methods to increase the level of insurance industry capital in safe and sound investments while providing fair returns to investors and social or economic benefits to underserved and low-to-moderate-income communities, as well as environmental benefits. (2) To meet a minimum of three or more times per year, or as deemed necessary by the commissioner. (3) To facilitate contacts among executives at insurance companies, community-based organizations, and community development financial institutions. (4) To recommend programmatic guidelines, but not specific allocations of the tax credit amount, to the California Organized Investment Network program. (g) The members of the board shall not receive compensation from the state for their services under this section, but, when called to attend a meeting of the board, may be reimbursed for their actual and necessary expenses incurred in connection with the meeting. (h) This section shall remain in effect only until January 1, 2029, and as of that date is repealed. (Amended by Stats. 2019, Ch. 186, Sec. 4. (AB 1099) Effective January 1, 2020. Repealed as of January 1, 2029, by its own provisions.) - 12940. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Review of Commissioner’s Acts [12940- 12940.] ( Article 2 enacted by Stats. 1935, Ch. 145. )
The commissioner’s acts and orders may be reviewed, or otherwise acted on, by a court if law permits it.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Review of Commissioner’s Acts [12940- 12940.] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 12940. The acts and orders of the commissioner are subject to such review, or other action by a court of competent jurisdiction, as is permitted or authorized by law. (Enacted by Stats. 1935, Ch. 145.) - 12950. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Procuring Information on Policies [12950 - 12960] ( Article 3 enacted by Stats. 1935, Ch. 145. )
A policy owner, assignee, pledgee, or payee who wants information about a policy may apply to the commissioner for a certificate of the facts or information desired.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Procuring Information on Policies [12950 - 12960] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 12950. Any person interested as owner, assignee, pledgee or payee, of any policy and desiring any information about such policy, may apply to the commissioner for a certificate of the facts or information desired. Such application, filed in duplicate, shall be accompanied by an affidavit, in duplicate, showing his interest in the policy. (Amended by Stats. 1972, Ch. 181.) - 12951. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Procuring Information on Policies [12950 - 12960] ( Article 3 enacted by Stats. 1935, Ch. 145. )
If the commissioner’s records show the requested facts, the commissioner must prepare a certificate. If not, the commissioner may send the insurer an order requiring an affidavit with the information, and may send that order to a foreign insurer’s service agent by certified mail.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Procuring Information on Policies [12950 - 12960] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 12951. If the records of his office show the facts or information desired, the commissioner shall prepare his certificate reciting such facts or information. If his records do not show the facts or information desired, he may deliver or mail by certified mail an order to the insurer, directing it to state such information or facts in an affidavit and deliver such affidavit to him. If such insurer is a foreign insurer, the commissioner may deliver or mail by certified mail such order to its agent for service of process. (Amended by Stats. 1972, Ch. 181.) - 12952. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Procuring Information on Policies [12950 - 12960] ( Article 3 enacted by Stats. 1935, Ch. 145. )
The insurer must make a full, true, and correct statement of all desired facts and information in its possession in the affidavit.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Procuring Information on Policies [12950 - 12960] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 12952. In such affidavit the insurer shall make a full, true and correct statement of all the desired facts and information in its possession, regardless of the location of its record of such information. (Enacted by Stats. 1935, Ch. 145.) - 12953. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Procuring Information on Policies [12950 - 12960] ( Article 3 enacted by Stats. 1935, Ch. 145. )
If an insurer does not file and deliver the required affidavit to the commissioner within 90 days after the order is delivered, the commissioner must revoke the insurer’s certificate of authority.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Procuring Information on Policies [12950 - 12960] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 12953. If such insurer neglects or refuses to make and deliver such affidavit to the commissioner within ninety days from the date of the delivery of the order by the commissioner to it or its agent for service of process, the commissioner shall revoke the certificate of authority of the insurer. (Enacted by Stats. 1935, Ch. 145.) - 12954. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Procuring Information on Policies [12950 - 12960] ( Article 3 enacted by Stats. 1935, Ch. 145. )
The commissioner must certify the insurer’s affidavit to the applicant right away, and the certified affidavit must then be delivered to the applicant in person or by prepaid U.S. mail.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Procuring Information on Policies [12950 - 12960] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 12954. Immediately after receiving such affidavit from an insurer the commissioner shall certify such affidavit to the applicant. Such affidavit so certified by the commissioner shall be delivered to the applicant personally or by depositing it in the United States post office, addressed to the applicant, with postage prepaid thereon. (Enacted by Stats. 1935, Ch. 145.) - 12955. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Procuring Information on Policies [12950 - 12960] ( Article 3 enacted by Stats. 1935, Ch. 145. )
If a policy loss is claimed and the policy is lost or destroyed, the applicant’s rights and the deadlines for notice of loss and proof of loss are stayed after the applicant gives the commissioner an affidavit, until five days after the commissioner delivers the insurer’s affidavit to the applicant.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Procuring Information on Policies [12950 - 12960] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 12955. If a loss is sustained under a policy of insurance and such policy has been lost or destroyed, all rights of every kind and nature, the time for the presentation of notice of loss, and the time for the presentation of proof of loss are stayed from the date such applicant delivers to the commissioner the affidavit showing his interest until and after five days after the date of the delivery by the commissioner to the applicant of the affidavit furnished by the insurer. (Enacted by Stats. 1935, Ch. 145.) - 12956. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Procuring Information on Policies [12950 - 12960] ( Article 3 enacted by Stats. 1935, Ch. 145. )
Policy forms filed with the commissioner are generally open to public inspection, but the commissioner may keep some information private when public welfare or an insurer’s welfare requires it.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Procuring Information on Policies [12950 - 12960] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 12956. Forms of policies filed with the commissioner and writings in respect thereto shall be open to public inspection except where, in his judgment, the public welfare or the welfare of any insurer demands that any portion thereof be not made public. In such cases he may withhold such information from public inspection for such time as in his judgment is necessary or advisable. (Added by Stats. 1937, Ch. 724.) - 12957. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Procuring Information on Policies [12950 - 12960] ( Article 3 enacted by Stats. 1935, Ch. 145. )
The commissioner may not withdraw approval of a previously approved policy except on grounds that would justify original disapproval, and any withdrawal must be written and state the reason.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Procuring Information on Policies [12950 - 12960] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 12957. The commissioner shall not withdraw approval of a previously approved policy, except upon those grounds as, in the commissioner’s opinion, would authorize disapproval upon original submission thereof. Any withdrawal of approval shall be in writing and shall specify the ground thereof. If the insurer demands a hearing on a withdrawal, the hearing shall be granted and commenced within 30 days of the filing of a written demand with the commissioner. Unless the hearing is commenced, the notice of withdrawal shall become ineffective upon the 31st day from and after the date of filing of the demand. This section shall not apply to policies subject to the provisions of subdivision (f) of Section 10291.5, or to policies, contracts, or agreements that were approved under an alternative filing and approval procedure as provided for in subdivision (f) of Section 10506.4 or subdivision (c) of Section 10507.5. (Amended by Stats. 2021, Ch. 50, Sec. 255. (AB 378) Effective January 1, 2022.) - 12959. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Procuring Information on Policies [12950 - 12960] ( Article 3 enacted by Stats. 1935, Ch. 145. )
The commissioner must publish and distribute an annual comparison of insurance rates report, make it available to consumers, and prepare it to help consumers compare coverages and rates. False rate information and failure to comply with a required data call can trigger civil penalties.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Procuring Information on Policies [12950 - 12960] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 12959. (a) On January 1, 1990, and on every January 1, thereafter, the commissioner shall publish and distribute a comparison of insurance rates report for those lines of insurance which, in the comissioner’s judgment, are of most interest to individual purchasers of personal lines of coverage. The report shall be available to consumers. The distribution shall be designed to make consumers throughout the state aware of the content of the report. This report shall be prepared by the commissioner in a manner designed to provide information useful to consumers so that they may make informed comparisons of coverages and rates. (b) The submission of any false rate information by any such insurer pursuant to a request of the commissioner for the purpose of compiling comparative data for the report to be published as required in subdivision (a), shall be punishable by a civil penalty not to exceed one hundred thousand dollars ($100,000). Any person subject to regulation by the commissioner pursuant to this code that fails to comply with a data call required by the department pursuant to this section shall be liable to the state for a civil penalty in an amount not exceeding five thousand dollars ($5,000) for each 30-day period that the person is not in compliance, unless the failure to comply is willful, in which case the civil penalty shall be in an amount not to exceed ten thousand dollars ($10,000) for each 30-day period that the person is not in compliance, but not to exceed an aggregate amount of one hundred thousand dollars ($100,000). In determining the level of the penalty, the commissioner shall consider the good faith of the insurer and any similar prior violations by the insurer under this code. (Amended by Stats. 2002, Ch. 1076, Sec. 2. Effective January 1, 2003.) - 12960. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Procuring Information on Policies [12950 - 12960] ( Article 3 enacted by Stats. 1935, Ch. 145. )
The commissioner must issue a bulletin by February 1, 2023 asking insurers for rate applications, and must require those applications to be submitted by July 1, 2023.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Procuring Information on Policies [12950 - 12960] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 12960. The commissioner shall, by February 1, 2023, distribute a bulletin soliciting rate applications from insurers to account for the change to the financial responsibility law in Division 7 (commencing with Section 16000) of the Vehicle Code that will go into operation on January 1, 2025, and require the applications to be submitted by July 1, 2023. A rate change shall only go into effect on or after January 1, 2025, the operative date of the change in the financial responsibility law. (Added by Stats. 2022, Ch. 717, Sec. 1. (SB 1107) Effective January 1, 2023.) - 12962. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3.5. Reporting [12962 - 12969] ( Article 3.5 added by Stats. 1990, Ch. 1110, Sec. 5. )
The commissioner must include the listed matters in the annual report submitted under Section 12922 and provide it to the Governor, the Legislature, and the relevant insurance committees.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3.5. Reporting [12962 - 12969] ( Article 3.5 added by Stats. 1990, Ch. 1110, Sec. 5. ) ## 12962. The commissioner shall report to the Governor, the Legislature, and to the committees of the Senate and Assembly having jurisdiction over insurance all of the following in the annual report submitted pursuant to Section 12922: (a) An analysis of the information required by Sections 674.5, 1857.7, 1857.9, and 12963, including, but not limited to, all of the following: (1) An aggregate and an average for all insurers for each item of information required by these sections. (2) The number of insurers reporting policies written for each class during the calendar year. (3) For each class, the number of insurers reporting a combined loss ratio of 100 percent or more, and the number reporting a combined loss ratio of under 100 percent. (4) An analysis of adjustments made to loss reserves for prior years. (5) The change in any item required to be included by paragraphs (1) to (4), inclusive, from the immediately prior year. (b) An analysis of the activities of the department in implementing the provisions of Proposition 103 on the November 8, 1988, general election ballot, as set forth in Article 10 (commencing with Section 1861.01) of Chapter 9 of Part 2 of Division 1. (c) Recommendations and proposals, including suggested legislation, to protect consumers from arbitrary insurance rates and practices, to encourage a competitive insurance marketplace, to provide for an accountable commissioner, and to ensure that insurance is fair, available, and affordable for all Californians. (d) The requirements of this section shall be satisfied if the analysis required by this section is included in the annual report to the Governor required by Section 12922, and a copy of that report is provided to the Legislature. (Amended by Stats. 2012, Ch. 786, Sec. 44. (AB 2303) Effective January 1, 2013.) - 12963. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3.5. Reporting [12962 - 12969] ( Article 3.5 added by Stats. 1990, Ch. 1110, Sec. 5. )
Insurers covering public-entity liability must report specified claims data to the commissioner when requested.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3.5. Reporting [12962 - 12969] ( Article 3.5 added by Stats. 1990, Ch. 1110, Sec. 5. ) ## 12963. Each insurer transacting insurance, as defined in Sections 108 and 116, covering liability for any public entity, as defined in Section 811.2 of the Government Code, where the public entity is the named insured, shall report specified data to the commissioner by type of claim, upon request of the commissioner, which may, for a specified period, include, but not be limited to, the following: (a) The total number of insureds. (b) The total amount of premiums received from insureds, both written and earned. (c) The number of claims reported to the insurer and the number of claims reported closed. (d) The total number of claims outstanding, together with the monetary amount reserved for loss and allocated loss expense. (e) The number of claims closed with payment to the claimant, the total monetary amount paid thereon, and the total allocated loss expense paid thereon. (f) The monetary amount paid on claims with allocated loss expense paid. (g) The number of claims closed without payment to the claimant and the allocated loss expense paid thereon. (h) The monetary amount reserved on claims incurred but not reported to the insurer. (i) The number of lawsuits filed against the insurers insureds. (j) A distribution by size of payment for those claims closed showing the number of claims and total amount paid for each monetary category, as determined by the commissioner. As used in this section, the type of claims to be reported shall include, but not be limited to, workers’ compensation, liability, personal injury other than automobile, property damage other than automobile liability, liability based upon the dangerous condition of public property, and other general liability claims. (Amended by Stats. 1995, Ch. 586, Sec. 2. Effective January 1, 1996.) - 12965. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3.5. Reporting [12962 - 12969] ( Article 3.5 added by Stats. 1990, Ch. 1110, Sec. 5. )
Data and other information that must be filed or reported under this article may be sent electronically to the receiver’s electronic data processing system.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3.5. Reporting [12962 - 12969] ( Article 3.5 added by Stats. 1990, Ch. 1110, Sec. 5. ) ## 12965. The data and other information required to be filed or reported under this article may be transmitted by electronic media or data transmision to the receiver’s electronic data processing system. (Added by Stats. 1990, Ch. 1110, Sec. 5.) - 12967. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3.5. Reporting [12962 - 12969] ( Article 3.5 added by Stats. 1990, Ch. 1110, Sec. 5. )
The department must organize and carry out Holocaust-era insurance claims research, records gathering, and database work, and the oversight committee must review and recommend on related settlements.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3.5. Reporting [12962 - 12969] ( Article 3.5 added by Stats. 1990, Ch. 1110, Sec. 5. ) ## 12967. (a) (1) The department shall develop and implement a coordinated approach to gather, review, and analyze the archives of insurers and other archives and records, using onsite teams and the oversight committee, to provide for research and investigation into insurance policies, unpaid insurance claims, and related matters of victims of the Holocaust or of the Nazi-controlled German government or its allies, and the beneficiaries and heirs of those victims, and for losses arising from the activities of the Nazi-controlled German government or its allies for insurance policies issued before and during World War II by insurers who have affiliates or subsidiaries authorized to do business in California. Information compiled shall be placed in a centralized database for the retention of policy and claimant data, and the data shall be used to implement this section and Section 790.15. (2) The department has an affirmative duty to play an independent role in representing the interests of Holocaust survivors where necessary, including the duty to carry out research, investigations, and advocacy. The department shall cooperate with, participate in, promote coordination with, and to the extent feasible and consistent with the purposes of this section, work jointly with the National Association of Insurance Commissioners and the international commission on Holocaust survivor claims or any other entity involved in the documentation, resolution, settlement, or distribution of insurance claims, including the documentation of unpaid claims and the distribution of proceeds, and the establishment and maintenance of a database to contain information relevant to claimants and documents and historical information. The department shall work to recover information and records that will strengthen the claims of California residents. (3) The department shall employ insurance archaeologists, economists, attorneys, accountants, and other specialists, in this country and in Europe, to implement this section. The department shall work jointly with the National Association of Insurance Commissioners and other organizations for this purpose. The department’s cooperation with other states shall be for the purpose of advancing survivors’ claims while avoiding duplication of efforts, and shall be dependent upon contributions by other states. (4) In order to ensure that Holocaust survivors receive the most aggressive and independent representation possible in pursuit of their historic claims, in contracting with accounting firms, law firms, economists, or others to implement this section, the department shall, to the maximum extent possible, avoid any potential or actual conflict of interest by doing the following: (A) Seek and give preference to firms that are entirely free of any associations with firms representing insurers and nations from which Holocaust survivors are seeking just treatment of their claims. (B) If the department finds that it is necessary to contract with a firm or firms that have conflicts or potential conflicts of interest, those conflicts or potential conflicts of interest shall be disclosed to the commissioner, and the following requirements shall apply: (i) The contract shall contain a provision that expresses a formal commitment on the part of the firm to aggressively pursue a maximum just settlement for Holocaust survivors and their families without regard to any adverse impacts on insurers, affiliates of insurers, nations, or others that may have employed the firm or affiliates of the firm that is contracting with the commissioner to assist in carrying out the commissioner’s responsibilities under this section. (ii) If any conflict or potential conflict exists between the firm, or an affiliate of the firm, and an insurer, an affiliate of an insurer, a nation or others directly or indirectly involving Holocaust claims, the firm shall disclose both the fact of the conflict or potential conflict, and all relevant information describing the nature of the conflict or potential conflict. (iii) If a conflict or potential conflict exists between the firm, or an affiliate of the firm, and an insurer, an affiliate of an insurer, a nation, or others that does not directly or indirectly involve Holocaust claims, the firm shall disclose the fact of the conflict or potential conflict and identify the source of the conflict or potential conflict, but need not describe the particular circumstances or facts that create the conflict or potential conflict. (C) The department may take whatever special measures it deems necessary to avoid either the appearance or the reality of conflicts that may undermine public confidence in the integrity of the effort to secure justice for Holocaust survivors. (b) The funding of the activities provided for by this section for the 1998–99 fiscal year shall be from funds transferred pursuant to subdivision (b) of Section 1523 of the Code of Civil Procedure, which funds are hereby appropriated to the commissioner for that purpose. The commissioner shall seek reimbursement of those funds as provided in subdivision (c). Funding for subsequent fiscal years shall be subject to the Budget Act and based on a plan submitted by the commissioner to the Legislature outlining the plan for reimbursement of expenses of the department by affected insurers. Funds made available to implement this section shall be used to develop and implement a coordinated approach to gather, review, and analyze the archives of affected insurance groups, and other archives and records, using onsite teams and the oversight committee. These funds shall also be used to fund the necessary expenses of the Holocaust Era Insurance Claims Oversight Committee established in subdivision (d). The information compiled shall be placed in a centralized database for the retention of policy and claimant data, and that data shall be used by the department to implement this section. (c) (1) Any funds recovered by the department for the purpose of reimbursing the state for costs associated with investigation and enforcement actions under this section shall not be deposited in the Insurance Fund, but instead shall be delivered to the Controller for deposit into the General Fund. (2) To the maximum extent possible, the department shall seek reimbursement for its costs incurred in implementing this section, including funds transferred pursuant to subdivision (b) of Section 1523 of the Code of Civil Procedure, from any settlements reached with affected insurers. (d) (1) There is established a seven-member Holocaust Era Insurance Claims Oversight Committee, that shall be known as the oversight committee, and whose members shall be appointed as follows: (A) Four members shall be appointed by the Governor. (B) One member shall be appointed by the President pro Tempore of the Senate. (C) One member shall be appointed by the Speaker of the Assembly. (D) One member shall be appointed by the Commissioner of Insurance. (2) The Governor shall designate one of the Governor’s appointees as the chairperson of the committee. (3) Each member of the committee shall serve at the pleasure of the authority that appointed the member to serve on the committee. (4) The oversight committee shall be composed of qualified individuals with experience in Holocaust claims cases, similar investigations, archival research, and international law. The oversight committee shall also include Holocaust survivors. No member of the oversight committee shall have a potential or actual conflict of interest, or shall be employed by a person who has a potential or actual conflict of interest. (5) The appointments shall be expedited because of the urgency due to survivors’ needs. (6) The oversight committee shall have the following authority and shall do all of the following: (A) Review and make recommendations concerning any insurance settlement negotiation or offer relating to a Holocaust era insurance claim in which the department is involved. (B) Review and make recommendations to the commissioner on the priorities for expenditure of funds and use of resources by the department for Holocaust era insurance claims-related activities. (C) Recommend whether a proposed settlement of a Holocaust era insurance claim submitted to the committee pursuant to paragraph (7) is equitable before the department finalizes the settlement agreement. (7) The commissioner, in the event of a proposed settlement of any policy or group of policies relating to Holocaust era insurance claims, shall confer with the committee prior to the department finalizing the settlement agreement. The department may not finalize a proposed settlement of a Holocaust era insurance claim unless the committee, pursuant to subparagraph (C) of paragraph (6), recommends that the proposed settlement is equitable. (Amended by Stats. 2021, Ch. 50, Sec. 256. (AB 378) Effective January 1, 2022.) - 12968. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3.5. Reporting [12962 - 12969] ( Article 3.5 added by Stats. 1990, Ch. 1110, Sec. 5. )
The department must publish certain enforcement pleadings, orders, and related documents on its website, and remove them within 30 days if the enforcement action is withdrawn.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3.5. Reporting [12962 - 12969] ( Article 3.5 added by Stats. 1990, Ch. 1110, Sec. 5. ) ## 12968. (a) Every pleading issued by the commissioner to initiate a formal enforcement action under this code against a licensee or applicant, and every order issued by the commissioner or a court of competent jurisdiction or other document that resolves a formal enforcement action, shall be displayed on the department’s internet website, if the document is a public record that is not exempt from disclosure to the public pursuant to the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code). (b) Notwithstanding Section 12969, if an enforcement action against a licensee or applicant is withdrawn, then each pleading, document, or order against that licensee or applicant shall be removed from the department’s internet website within 30 days of the withdrawal of the action. If a pleading, document, or order contains allegations against multiple licensees or applicants, and the department withdraws all allegations against any one or more of the licensees or applicants, then the department shall post, on its internet website, a pleading, document, or order that clarifies that the enforcement action against that specific licensee or applicant has been withdrawn. (Amended by Stats. 2021, Ch. 615, Sec. 317. (AB 474) Effective January 1, 2022. Operative January 1, 2023, pursuant to Sec. 463 of Stats. 2021, Ch. 615.) - 12969. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3.5. Reporting [12962 - 12969] ( Article 3.5 added by Stats. 1990, Ch. 1110, Sec. 5. )
The department must remove certain disciplinary or enforcement orders and pleadings from its website 10 years after the action becomes final, or 10 years after a restricted license restriction is removed.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3.5. Reporting [12962 - 12969] ( Article 3.5 added by Stats. 1990, Ch. 1110, Sec. 5. ) ## 12969. An order or pleading posted on the department’s internet website that is related to a disciplinary proceeding or enforcement action under this code against a licensee or applicant, or that is related to a restricted license, shall be removed from the site 10 years from the date the disciplinary or enforcement action becomes final or, in actions resulting in the issuance of a restricted license, 10 years from the date the restriction on the license is removed. This section does not apply to an order or pleading related to an enforcement action resulting in a suspended or revoked license. This section is intended to apply solely to the department’s internet website and shall not be construed to require the department to permanently remove any information from its public record. (Amended by Stats. 2019, Ch. 201, Sec. 13. (AB 1813) Effective January 1, 2020.) - 12970. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Fees [12970 - 12980] ( Article 4 enacted by Stats. 1935, Ch. 145. )
The commissioner must require advance payment of a fee for copying microfilm records, set at $0.30 per page.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Fees [12970 - 12980] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 12970. The commissioner shall require the payment in advance of a fee for copying microfilm records in the amount of thirty cents ($0.30) per page. (Amended by Stats. 1985, Ch. 770, Sec. 27.5.) - 12970.1. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Fees [12970 - 12980] ( Article 4 enacted by Stats. 1935, Ch. 145. )
The commissioner must charge extra payment for copies delivered by a more expensive method than ordinary first-class mail, in an amount about equal to the postage or other delivery charges.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Fees [12970 - 12980] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 12970.1. In addition to all other fees required for furnishing copies of instruments or documents filed in his office, the commissioner shall require the payment, in lawful money of the United States, of an amount approximately equal to the postage or other delivery charges he must pay for delivery of the copies so furnished if at the request of the person ordering them they are delivered by any more expensive means than ordinary first-class United States mail. (Added by Stats. 1959, Ch. 542.) - 12972. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Fees [12970 - 12980] ( Article 4 enacted by Stats. 1935, Ch. 145. )
The commissioner must collect a $1 fee in advance before attaching the commissioner’s seal of office to any paper or document not specified in the code.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Fees [12970 - 12980] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 12972. The commissioner shall require the payment of one dollar ($1), in advance, as a fee for attaching the commissioner’s seal of office to any paper or document not specified in this code. (Amended by Stats. 2021, Ch. 50, Sec. 257. (AB 378) Effective January 1, 2022.) - 12973. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Fees [12970 - 12980] ( Article 4 enacted by Stats. 1935, Ch. 145. )
The commissioner must charge advance fees for issuing certificates when no other fee is specified.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Fees [12970 - 12980] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 12973. The commissioner shall require, in advance, as a fee for issuing certificates when the fee is not otherwise specified, the following amounts: (a) Twenty-two dollars ($22), if there is sufficient demand so that the commissioner in the commissioner’s discretion has prepared a form of the certificate in advance that requires only the filling in of blanks for completion. (b) For issuing any other certificate, the reasonable cost of preparing and issuing that certificate, but not to exceed fifty dollars ($50) for the first copy of the certificate and nine dollars ($9) for each additional copy. (Amended by Stats. 2021, Ch. 50, Sec. 258. (AB 378) Effective January 1, 2022.) - 12973.5. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Fees [12970 - 12980] ( Article 4 enacted by Stats. 1935, Ch. 145. )
The commissioner must charge and collect certain fees in advance for specified application filings and qualifying examination applications.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Fees [12970 - 12980] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 12973.5. The commissioner shall charge and collect, in advance, the following fees: (a) For filing any application for a license, permit, or certificate of authority when a fee for either filing the application or issuing the license, permit, or certificate is not elsewhere specified in this code, twenty-two dollars ($22). (b) For filing any application to take any qualifying examination required by this code to be taken by a licensee other than an insurer, or to be taken by any applicant for a license other than a certificate of authority when a fee for filing that application or giving that examination is not elsewhere specified in this code, seventy-two dollars ($72). (Amended by Stats. 2017, Ch. 534, Sec. 88. (AB 1699) Effective January 1, 2018.) - 12973.6. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Fees [12970 - 12980] ( Article 4 enacted by Stats. 1935, Ch. 145. )
If a check for a tax, fee, or penalty is dishonored on first presentation, the commissioner must charge and collect an extra $14 fee.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Fees [12970 - 12980] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 12973.6. If a check in payment of a tax, fee, or penalty is not paid by the bank on which it is drawn on its first presentation, the commissioner shall charge and collect an additional fee of fourteen dollars ($14). (Amended by Stats. 2017, Ch. 534, Sec. 89. (AB 1699) Effective January 1, 2018.) - 12973.7. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Fees [12970 - 12980] ( Article 4 enacted by Stats. 1935, Ch. 145. )
If the code does not already set a fee or charge for certain materials, the commissioner may set and collect a fee up to reasonable cost. Publications and other printed matter must be distributed and sold by the Department of General Services.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Fees [12970 - 12980] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 12973.7. Where provision for fees or charges for documents, transcripts, or other materials which may be furnished by the commissioner is not specifically made in this code, the commissioner may fix and collect fees therefor not in excess of reasonable cost. All publications and other printed matter shall be distributed and sold by the Department of General Services. (Amended by Stats. 1965, Ch. 371.) - 12973.9. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Fees [12970 - 12980] ( Article 4 enacted by Stats. 1935, Ch. 145. )
When certain insurance policy or certificate materials must be filed with, submitted to, or approved by the commissioner, fees must be paid to the commissioner. The commissioner sets the fee schedule, may set different fees for different document types, and must remit collected fees to the Insurance Fund.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Fees [12970 - 12980] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 12973.9. Whenever by the provisions of this code a form of policy or certificate and any endorsement, rider, application, amendment, fill-in material, classification of rates, certificate or premium to be used therewith, is required to be filed with, submitted to, or approved by the commissioner, fees as provided for by this section shall be paid to the commissioner to cover the expenses of processing and indexing the same and maintaining copies of the same. The required fee shall be prescribed by the commissioner for each type document submitted, depending on its nature and the kind of processing required. The commissioner may prescribe different fees for different types of documents, and in the case of documents submitted for approval or authorization of use, shall prescribe a fee only for the final approval or authorization for use, if any. The commissioner shall determine the fee, or fees, by estimating in advance the commissioner’s total costs of performing these services for all types of documents for a specified period of time, estimating the total number of documents of various kinds which will be submitted for processing during such time and equitably distributing the total cost on a per document basis. The commissioner shall, after notice and hearing, promulgate such reasonable rules and regulations as are necessary to establish the standard or standards by which the commissioner shall determine the original fee schedule or any amended fee schedule. Any rule or regulation shall be promulgated in accordance with the procedure provided in Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code and shall be effective 90 days after adoption by the commissioner, except the first fee schedule adopted by the commissioner under such regulation may be retroactive to the effective date of this section. All fees received by the commissioner under this section shall be remitted to the credit of the Insurance Fund pursuant to the provisions of Section 12975.7. Without in any manner affecting the applicability of this section to any other provisions of this code, it is expressly provided herein that the provisions of this section apply to the forms required to be filed, submitted, or approved under the following sections of this code: 779.8, 795.5, 1320, 9080.1, 10205, 10225, 10270, 10270.1, 10270.5, 10270.57, 10270.9, 10270.93, 10290, 10292, 10506, 11027, 11029, 11066, 11069, 11513, 11522, 11658, 12250, and 12640.18. (Amended by Stats. 1981, Ch. 714, Sec. 312.) - 12975. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Fees [12970 - 12980] ( Article 4 enacted by Stats. 1935, Ch. 145. )
The commissioner may use Department of Insurance appropriations to pay certain advance expenses when the code gives the commissioner a duty, right, privilege, or power and the expense must be paid from non-Insurance Fund sources.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Fees [12970 - 12980] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 12975. Whenever, by the provisions of this code a duty, right, privilege, or power is imposed or conferred upon the commissioner, but it is provided that the expense of performance of that duty or exercise of that right, privilege, or power is to be paid in advance or otherwise out of sources other than the Insurance Fund, the commissioner may defray that expense, or any portion thereof, out of the appropriation for the support of the Department of Insurance without regard to prospect of repayment. The repayment of those moneys, not to exceed one thousand one hundred twenty-one dollars ($1,121) shall be a debt of and a lien against the assets of every person otherwise chargeable with that payment and shall constitute a preferred claim in all proceedings in bankruptcy or insolvency to the same extent as claims for compensation due employees for wages and salaries and claims for expenses of conservatorship or liquidation in proceedings under Article 14 (commencing with Section 1010) of Chapter 1 of Part 2 of Division 1. (Amended by Stats. 2017, Ch. 534, Sec. 90. (AB 1699) Effective January 1, 2018.) - 12975.1. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Fees [12970 - 12980] ( Article 4 enacted by Stats. 1935, Ch. 145. )
Examination expense moneys collected by the Department of Insurance under specified sections must be deposited in the Insurance Fund and credited to the department’s current support appropriation.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Fees [12970 - 12980] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 12975.1. All examination expense moneys collected by the Department of Insurance under the provisions of Sections 736, 1061, and 1857.4 are hereby appropriated to the department and shall be deposited in the Insurance Fund to the credit of the support appropriation for the department current at the time of the deposit. (Amended by Stats. 1982, Ch. 722, Sec. 1. Operative July 1, 1983, by Sec. 12 of Ch. 722. Note: Stats. 1988, Ch. 855, deleted the July 1, 1989, termination date in Stats. 1982, Ch. 722, Sec. 10, as amended by Stats. 1985, Ch. 770, Sec. 34.) - 12975.5. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Fees [12970 - 12980] ( Article 4 enacted by Stats. 1935, Ch. 145. )
The commissioner may take depositions in investigations or hearings and may pay certain witness expenses, including a $12 daily per diem for subpoenaed witnesses.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Fees [12970 - 12980] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 12975.5. The commissioner may, in any investigation or hearing the commissioner conducts, take or cause to be taken the deposition of any witness residing within or without this state and may pay the expense thereof out of the current support appropriation of the department. The commissioner may pay out of the appropriation to any witness subpoenaed by the commissioner the necessary and reasonable traveling expenses of any witness, to the place of hearing or investigation and return and a per diem of twelve dollars ($12) for each day that the witness is in attendance at or en route to and from the place of hearing or investigation in obedience to the subpoena. The provisions of this section shall not apply to proceedings conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, and those proceedings shall be governed solely by that chapter. (Amended by Stats. 2021, Ch. 50, Sec. 259. (AB 378) Effective January 1, 2022.) - 12975.7. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Fees [12970 - 12980] ( Article 4 enacted by Stats. 1935, Ch. 145. )
The commissioner must send certain money to the Treasurer for deposit into the Insurance Fund or, for fines and similar sanctions, into the General Fund unless another fund is specified.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Fees [12970 - 12980] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 12975.7. (a) All moneys received by the commissioner in payment of lawful fees or reimbursements pursuant to this code shall be transmitted to the Treasurer to be deposited in the State Treasury to the credit of the Insurance Fund. Unless specified in this code to be deposited in a different fund, all moneys received by the commissioner in fines, penalties, assessments, costs, or other sanctions shall be transmitted to the State Treasury for deposit in the General Fund. (b) The money in the Insurance Fund received from the commissioner pursuant to this section is hereby appropriated to pay the refunds authorized by this code. (c) The balance of the money in the Insurance Fund shall be used for the purposes specified in Section 12975.9, for the support of the Department of Insurance as authorized by the Budget Act, and for related cashflow needs. (Amended by Stats. 2004, Ch. 183, Sec. 251. Effective January 1, 2005.) - 12975.8. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Fees [12970 - 12980] ( Article 4 enacted by Stats. 1935, Ch. 145. )
This section sets up what money makes up the Insurance Fund and how it can be appropriated, loaned, transferred, carried forward, and repaid.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Fees [12970 - 12980] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 12975.8. (a) The Insurance Fund shall, in addition to the funds specified in Section 12975.7, consist of all of the following: (1) All moneys appropriated to the fund in accordance with law. (2) All moneys deposited into the State Treasury from any source whatever in payment of lawful fees or reimbursements collected by the Department of Insurance. (3) The balance remaining in the Insurance Fund at the end of the fiscal year, whether the moneys received are from an appropriation, fees, or from reimbursements for services rendered. (b) (1) All moneys in the Insurance Fund credited to the Seismic Safety Account shall be subject to an annual appropriation each fiscal year for the purposes specified in Section 12975.9. (2) All other moneys in the Insurance Fund shall be subject to an annual appropriation each fiscal year for the support of the Department of Insurance. (3) If the current cash balance in the Seismic Safety Account is not adequate to fund the amount appropriated from it in the annual Budget Act, the Insurance Fund, upon enactment of the Budget Act, shall loan to the account the amount of the appropriation, and one half of this amount shall be transferred to the Seismic Safety Commission. The second half of the appropriated amount shall be transferred to the Seismic Safety Commission from the Seismic Safety Account on or before December 31 of each year. This loan shall be repaid by revenues collected pursuant to Section 12975.9. (c) Any balance remaining in the Insurance Fund at the end of the fiscal year may be carried forward to the next succeeding fiscal year. (d) Whenever the balance in the Insurance Fund is not sufficient to cover cashflow in the payment of authorized expenditures, the department may borrow funds as may be necessary from whatever source and under terms and conditions as may be determined by the Director of Finance. Repayment shall be made from revenues received by the department for the same fiscal year for which the loan is made. (Amended by Stats. 2004, Ch. 183, Sec. 252. Effective January 1, 2005.) - 12975.9. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Fees [12970 - 12980] ( Article 4 enacted by Stats. 1935, Ch. 145. )
This section creates the Seismic Safety Account, charges a property-related assessment, and requires insurers and the department to handle invoicing, payment, reporting, and late fees.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Fees [12970 - 12980] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 12975.9. (a) The Seismic Safety Account is hereby created as a special account within the Insurance Fund. Moneys in the account are available, upon appropriation by the Legislature, for the purposes of this section to fund the department and the Alfred E. Alquist Seismic Safety Commission. (b) There is hereby imposed an assessment on each person who owns real property, commercial or residential, that is insured by a property insurance policy. The department shall calculate the annual assessment to be charged to each commercial and residential earned property exposure. The assessment shall be set annually every August 1, beginning August 1, 2014, for all commercial and residential earned property exposures reported during the previous calendar year. The annual assessment shall be set at fifteen cents ($0.15) per earned property exposure for the first three years of the implementation of this section. Each year thereafter, the annual assessment shall be based upon the number of earned property exposures from both commercial and residential insurance policies, the amount required for the support of the Alfred E. Alquist Seismic Safety Commission, the actual collection and administrative costs of the department, and the maintenance of an adequate reserve, but shall not exceed fifteen cents ($0.15) per earned property exposure. (c) The insurer, upon receipt of an invoice from the department, shall transmit payment to the department for deposit into the Seismic Safety Account. The insurer shall recover the assessment from the insured, unless the insurer elects to pay the assessment on the insured’s behalf. The insurer may provide a description of the assessment to the insured as part of its billing statement. The insurer is not required to refund any portion of an assessment because the policy or coverage is terminated prior to the expiration date of the policy or coverage. Any deficiency or excess in the amount collected in relation to the appropriation authority for the commission and the department shall be accounted for in the subsequent annual fee calculation. Any balance remaining in the Seismic Safety Account at the end of each fiscal year shall be retained in the account and carried forward to the next fiscal year. (d) Funds in the Seismic Safety Account shall be distributed, upon appropriation by the Legislature, to the Alfred E. Alquist Seismic Safety Commission for the support of the commission and to the department for the actual administrative costs incurred in collecting the assessments. (e) Any assessment collected from an insured that has not been remitted to the department shall be a debt owed to the state by the insurer. This part does not impose any obligation upon an insurer to take any legal action to enforce the collection of the assessment imposed by this section. (f) Payment of the assessment shall be considered delinquent if not paid within 45 days of the invoice date. The department is authorized to charge a late fee of 1.5 percent per month of the balance due, compounded monthly, for any amount not paid within this period in accordance with Section 12995. (g) (1) Notwithstanding Section 10231.5 of the Government Code, the department shall report by December 1 of each year, beginning on December 1, 2014, to the Legislature, the Alfred E. Alquist Seismic Safety Commission, and the Department of Finance on the assessment calculation methodology employed. (2) A report to be submitted to the Legislature pursuant to this subdivision shall be submitted in compliance with Section 9795 of the Government Code. (Amended by Stats. 2014, Ch. 407, Sec. 2. (AB 1395) Effective January 1, 2015.) - 12976. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Fees [12970 - 12980] ( Article 4 enacted by Stats. 1935, Ch. 145. )
The commissioner may demand payment of specified fines, forfeitures, taxes, assessments, restitution, and penalties, and must sue to recover unpaid amounts if payment is not made within 10 days.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Fees [12970 - 12980] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 12976. All fines, forfeitures, taxes, assessments, restitution, and penalties provided for in this code shall be due and payable on the demand of the commissioner. If payment is not made within 10 days after that demand, then the commissioner shall institute an action in the name of the people of the State of California for the purpose of recovering that moneys due. All such actions shall be subject to all the provisions of the Code of Civil Procedure which may be applicable thereto. (Amended by Stats. 2022, Ch. 540, Sec. 3. (SB 1040) Effective January 1, 2023.) - 12976.5. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Fees [12970 - 12980] ( Article 4 enacted by Stats. 1935, Ch. 145. )
Certain insurers must pay qualifying taxes by electronic funds transfer, and a 10% penalty applies if they do not.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Fees [12970 - 12980] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 12976.5. (a) On and after January 1, 1994, and before January 1, 1995, every insurer whose annual taxes exceed fifty thousand dollars ($50,000) shall make payment by electronic funds transfer. On and after January 1, 1995, every insurer whose annual taxes exceed twenty thousand dollars ($20,000) shall make payment by electronic funds transfer. The insurer shall choose one of the acceptable methods described in Section 45 for completing the electronic funds transfer. (b) Payment is deemed complete on the date the electronic funds transfer is initiated, if settlement to the state’s demand account occurs on or before the banking day following the date the transfer is initiated. If settlement to the state’s demand account does not occur on or before the banking day following the date the transfer is initiated, payment is deemed to occur on the date settlement occurs. (c) (1) Any insurer required to remit taxes by electronic funds transfer pursuant to this section who remits those taxes by means other than an appropriate electronic funds transfer, shall be assessed a penalty in an amount equal to 10 percent of the taxes due at the time of the payment. (2) If the department finds that an insurer’s failure to make payment by an appropriate electronic funds transfer in accordance with subdivision (a) is due to reasonable cause or circumstances beyond the insurer’s control, and occurred notwithstanding the exercise of ordinary care and in the absence of willful neglect, that insurer shall be relieved of the penalty provided in paragraph (1). (3) Any insurer seeking to be relieved of the penalty provided in paragraph (1) shall file with the department a statement under penalty of perjury setting forth the facts upon which the claim for relief is based. (Amended by Stats. 1995, Ch. 721, Sec. 8. Effective January 1, 1996.) - 12977. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Fees [12970 - 12980] ( Article 4 enacted by Stats. 1935, Ch. 145. )
The commissioner may authorize refunds of certain filing and service fees in specified situations, including overpayment, duplicate payment, no fee being required, insufficient fee, or certain late penalty fees.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Fees [12970 - 12980] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 12977. The commissioner may authorize the refund of money received or collected by the department in payment for the filing of applications for licenses, permits or certificates, or for the rendering of other services: (a) Where the receipt or collection has resulted in an overpayment or duplicate payment. (b) In cases where no payment is required for filing the application for the license, permit or certificate sought, or for rendering the other service. (c) Where an insufficient fee is paid and for which reason the application for the license, permit or certificate cannot be filed or the other service cannot be rendered. (d) The penalty fee required by subdivision (b) of Section 1718 upon a written showing, filed within sixty (60) days after the delinquency date, with particularity as to facts that late payment resulted from mistake, inadvertence or excusable neglect. This section does not exclude the making of refunds under other appropriate provisions of law requiring the approval of the Director of General Services before such refunds may be made. (Amended by Stats. 1965, Ch. 371.) - 12978. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Fees [12970 - 12980] ( Article 4 enacted by Stats. 1935, Ch. 145. )
The commissioner may adjust insurance-code fees to match budget needs, but increases over 10% need prior legislative approval.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Fees [12970 - 12980] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 12978. (a) Notwithstanding any other law, the commissioner may increase or decrease the fees set forth in this code, as necessary, to allow the department to meet the appropriation authorized by the annual Budget Act. However, any increase or decrease so made shall be made only in accordance with this section, and a fee increase shall not exceed 10 percent without the prior approval of the Legislature. (b) A single annual increase or decrease in fees, on a fiscal year basis, may be made by the department at any time during the year provided it is announced by bulletin issued at least 90 days prior to the effective date of that increase or decrease. The bulletin shall be sent to all affected parties and to the Assembly Committee on Insurance and the Senate Committee on Insurance. That fee increase or decrease may be rescinded by a majority vote of both houses of the Legislature not later than 60 days after the issuance of the bulletin announcing the increase or decrease. (c) If the bulletin is issued during the period between August 1 and December 1 of any year, the department shall provide notice in writing of the necessity of any fee increase or decrease as proposed in the bulletin upon issuance of the bulletin to the chairperson of the committee in each house that considers appropriations and the Chairperson of the Joint Legislative Budget Committee. (d) If written notice is provided to the commissioner within 60 days of the issuance of the bulletin announcing the increase or decrease by any of the chairpersons that there is an objection to the fee increase or decrease, the increase or decrease shall take effect February 1 of the following year unless rescinded by a majority vote of both houses of the Legislature by that date, rather than 60 days after issuance of the bulletin. (e) The department shall annually project forward its workload for the subsequent three years in order to project appropriate fee levels, and shall annually make adjustments to those fees, if necessary, based on actual workload experience. (f) The limit on the cumulative amount that the fees may be increased or decreased shall be the amount necessary to provide sufficient moneys to carry out the projected workload within the appropriations contained in the Governor’s Budget for the next succeeding fiscal year, or, to the extent that moneys received or projected to be received by the department are insufficient to carry out the projected workload within the appropriation authorized by the annual Budget Act during the then current fiscal year, an amount necessary to meet that appropriation and consistent with that projected workload. (Amended by Stats. 2017, Ch. 534, Sec. 91. (AB 1699) Effective January 1, 2018.) - 12979. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Fees [12970 - 12980] ( Article 4 enacted by Stats. 1935, Ch. 145. )
The commissioner must set a filing-fee schedule for insurers.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Fees [12970 - 12980] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 12979. Notwithstanding the provisions of Section 12978, the commissioner shall establish a schedule of filing fees to be paid by insurers to cover any administrative or operational costs arising from the provisions of Article 10 (commencing with Section 1861.01) of Chapter 9 of Part 2 of Division 1. (Added November 8, 1988, by initiative Proposition 103, Sec. 5.) - 12980. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Fees [12970 - 12980] ( Article 4 enacted by Stats. 1935, Ch. 145. )
The Financial Responsibility Penalty Account is created in the General Fund, and money in it must be spent only after an appropriation for specified insurance-related matters.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Fees [12970 - 12980] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 12980. The Financial Responsibility Penalty Account is hereby created in the General Fund. Moneys in the account shall be expended, upon appropriation therefor, for matters including, but not limited to, automobile insurance and financial responsibility of vehicle owners and operators. (Added by Stats. 1985, Ch. 1494, Sec. 1. Effective October 2, 1985.) - 12990. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Fee Oversight [12990 - 12995] ( Article 5 added by Stats. 1994, Ch. 965, Sec. 1. )
The department must adopt an accounting system that can identify costs by regulatory activity and link those costs to the fees collected.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Fee Oversight [12990 - 12995] ( Article 5 added by Stats. 1994, Ch. 965, Sec. 1. ) ## 12990. The department shall adopt an accounting system, as recommended by the State Auditor in Report No. 93030, that will allow the department to accurately identify costs by the regulatory activities and to link the costs to fees collected for those regulatory activities. (Added by Stats. 1994, Ch. 965, Sec. 1. Effective January 1, 1995.) - 12991. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Fee Oversight [12990 - 12995] ( Article 5 added by Stats. 1994, Ch. 965, Sec. 1. )
The department may not levy fees under Section 736 or 12979 after October 1, 1995 unless the fees comply with Sections 12992 and 12993.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Fee Oversight [12990 - 12995] ( Article 5 added by Stats. 1994, Ch. 965, Sec. 1. ) ## 12991. On and after October 1, 1995, the department may not levy any fee or fees under Section 736 or 12979 unless the fees are created in compliance with Sections 12992 and 12993. (Added by Stats. 1994, Ch. 965, Sec. 1. Effective January 1, 1995.) - 12992. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Fee Oversight [12990 - 12995] ( Article 5 added by Stats. 1994, Ch. 965, Sec. 1. )
The department must calculate certain actual costs and set related fees based on those costs.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Fee Oversight [12990 - 12995] ( Article 5 added by Stats. 1994, Ch. 965, Sec. 1. ) ## 12992. (a) The department shall determine the actual cost of providing each examination as authorized under Section 730 and following. The department shall then set each fee levied under Section 736 to be based on the actual cost of providing the examination. (b) The department shall determine the actual administrative and operational costs arising from the provisions of Article 10 (commencing with Section 1861.01) of Chapter 9 of Part 2 of Division 1. The department shall then set the fees assessed under Section 12979 to be based on the actual administrative and operational costs arising from the provisions of Article 10 (commencing with Section 1861.01) of Chapter 9 of Part 2 of Division 1. (Added by Stats. 1994, Ch. 965, Sec. 1. Effective January 1, 1995.) - 12993. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Fee Oversight [12990 - 12995] ( Article 5 added by Stats. 1994, Ch. 965, Sec. 1. )
The department must provide the fee schedule under Section 12992 and explain that the fees are based on the actual cost of the regulatory activity.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Fee Oversight [12990 - 12995] ( Article 5 added by Stats. 1994, Ch. 965, Sec. 1. ) ## 12993. The department shall provide the schedule of fees created under Section 12992, as well as the justification that the fees are based on the actual cost of the regulatory activity, to the Department of Finance, the Legislative Analyst, and the insurance committees in each house of the Legislature. (Added by Stats. 1994, Ch. 965, Sec. 1. Effective January 1, 1995.) - 12994. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Fee Oversight [12990 - 12995] ( Article 5 added by Stats. 1994, Ch. 965, Sec. 1. )
The department must publish a fee schedule by October 1, 1995, and the Bureau of State Audits must complete an audit of that schedule by January 15, 1996.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Fee Oversight [12990 - 12995] ( Article 5 added by Stats. 1994, Ch. 965, Sec. 1. ) ## 12994. On or before October 1, 1995, the department shall publish a schedule of all fees levied under Sections 736 and 12979. The fees shall be calculated in accordance with Sections 12992 and 12993. On or before January 15, 1996, the Bureau of State Audits shall complete an audit of the schedule of fees created by this section. The audit shall determine if the fees are in compliance with Section 12992. (Added by Stats. 1994, Ch. 965, Sec. 1. Effective January 1, 1995.) - 12995. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Fee Oversight [12990 - 12995] ( Article 5 added by Stats. 1994, Ch. 965, Sec. 1. )
Late charges apply to unpaid uncontested departmental billings after 45 days, with special rules for contested billings and late-postmarked bills.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Fee Oversight [12990 - 12995] ( Article 5 added by Stats. 1994, Ch. 965, Sec. 1. ) ## 12995. (a) Notwithstanding any other provision of this code, all uncontested departmental billings for services or assessments authorized herein, which are not paid within 45 days of the invoice date, shall be subject to a late charge, unless waived or modified by the department. The late charge shall be 11/2 percent per month of the balance due. This late charge shall be compounded monthly. (b) Billings from the department shall be postmarked within five working days of the invoice date. If the billing is postmarked more than five working days after the invoice date, the insurer shall be given 45 days from the date of the postmark to pay the amount due. In those instances where a billing is postmarked more than five working days after the invoice date, the insurer is required to submit the postmarked envelope with payment to avoid a late charge. (c) Payments shall be postmarked by the due date to avoid a late charge. Except as provided in subdivision (d), contested billings for which the original amount is paid to the department after the 45 day period shall be subject to the late charge, unless waived or modified by the department. The insurer shall provide written notice of the contested billing and shall set forth the basis for the contestability in writing to the department prior to the due date. (d) Late charges shall be tolled for the portion of the billing that is contested by an insurer. The commissioner shall consider the material submitted by the insurer and reach a decision on the contested billing within 30 days of receiving written notification that a billing is being contested. The commissioner’s written decision on contested amounts shall be final and written notification, including a revised amount, if any, shall be provided indicating the basis for the decision. This written notification shall also include an invoice date from which an insurer shall be given 30 days to remit payment. This section shall not preclude an insurer from filing a petition for writ of mandate in accordance with the provisions of the Code of Civil Procedure. (e) All late charges collected pursuant to this section shall be deposited into the General Fund. (f) This section shall not apply to the Insurance Department Schedule of Fees and Charges pursuant to Section 12978. (Added by Stats. 1997, Ch. 798, Sec. 4. Effective October 9, 1997. Operative January 1, 1998, by Sec. 8 of Ch. 798.) - 13. Verify source ↗
## Insurance Code - INS ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1935, Ch. 145. )
This section says words in the singular also cover the plural, and words in the plural also cover the singular.
## Insurance Code - INS ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1935, Ch. 145. ) ## 13. The singular number includes the plural, and the plural the singular. (Enacted by Stats. 1935, Ch. 145.) - 130. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1.5. Risk Retention [125 - 140] ( Chapter 1.5 added by Stats. 1990, Ch. 1521, Sec. 1. )
This section defines key terms used in the risk retention chapter.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1.5. Risk Retention [125 - 140] ( Chapter 1.5 added by Stats. 1990, Ch. 1521, Sec. 1. ) ## 130. The following definitions govern this chapter: (a) “Commissioner” means the Insurance Commissioner of this state or the commissioner, director, or superintendent of insurance of any other state. (b) “Domicile,” for purposes of determining the state in which a purchasing group is domiciled, means the following: (1) For a corporation, the state in which the purchasing group is incorporated and registered to do business pursuant to the federal Liability Risk Retention Act (15 U.S.C. Sec. 3901 and following). (2) For an unincorporated entity, the state of its principal place of business and in which it is registered to do business under the federal Liability Risk Retention Act (15 U.S.C. 3901 and following). (c) “Hazardous financial condition” means that, based on its present or reasonably anticipated financial condition, a risk retention group is unlikely to be able to do either of the following: (1) Meet obligations to policyholders with respect to known claims and reasonably anticipated claims. (2) Pay other obligations in the normal course of business. (d) “Insurance” means primary insurance, excess insurance, reinsurance, surplus lines insurance, and any other arrangement for shifting and distributing risk that is determined to be insurance under the laws of this state. (e) (1) “Liability” means legal liability for damages including costs of defense, legal costs and fees, and other claims expenses because of injuries to other persons, damage to their property, or other damage or loss to the other persons resulting from or arising out of any of the following: (A) Any business, whether profit or nonprofit, trade, product, services, including professional services, premises, or operations. (B) Any activity of any state or local government, or any agency or political subdivision thereof. (2) “Liability” includes financial responsibility required by the state for any activity for which an individual is required to obtain a license or certificate to provide a service. For purposes of this subdivision, a state agency has discretion to accept or deny proof of financial responsibility. (3) “Liability” does not include personal risk liability or an employer’s liability with respect to its employees other than legal liability under the Federal Employers’ Liability Act (45 U.S.C. Sec. 51 et seq.). (f) “Personal risk liability” means liability for damages because of injury to any person, damage to property, or other loss or damage resulting from any personal, familial, or household responsibilities or activities, rather than from responsibilities or activities referred to in subdivision (f). (g) “Plan of operation or a feasibility study” with respect to risk retention groups chartered in California includes analysis which presents the expected activities and results of a risk retention group including, at a minimum, all of the following: (1) Information to demonstrate that its members are engaged in businesses or activities similar or related with respect to the liability to which those members are exposed by virtue of any related, similar, or common business, trade, product, services, premises, or operations. (2) For each state in which it intends to operate, the coverages, deductibles, coverage limits, rates, and rating classification systems for each line of insurance the group intends to offer. (3) Historical and expected loss experience of the proposed members and national experience of similar exposures, to the extent that this experience is reasonably available. (4) Pro forma financial statements and projections. (5) Appropriate opinions by a qualified, independent casualty actuary, including a determination of minimum premium or participation levels required to commence operations and to prevent a hazardous financial condition. (6) Identification of management, underwriting and claims procedures, marketing methods, managerial oversight methods, investment policies and reinsurance agreements. (h) “Public entity” includes the state, the Regents of the University of California, a county, city, district, public authority, public agency, and any other political subdivision or public corporation in the state. (i) “Purchasing group” means any group which does all of the following: (1) Has as one of its purposes the purchase of liability insurance on a group basis. (2) Purchases that insurance only for its group members and only to cover their similar or related liability exposure, as described in paragraph (3). (3) Is composed of members whose businesses or activities are similar or related with respect to the liability to which members are exposed by virtue of any related, similar, or common business, trade, product, services, premises, or operations. (4) Is domiciled in any state. (j) “Risk Retention Administration Account” means an account within the Insurance Fund to be used as a depository of moneys received under this chapter or appropriated by the Legislature for the purpose of administering this chapter. (k) “Risk retention group” means any corporation, public entity, or other limited liability association formed under the laws of any state, Bermuda, or the Cayman Islands that meets all of the following criteria: (1) Whose primary activity consists of assuming and spreading all, or any portion, of the liability exposure of its group members. (2) Which is organized for the primary purpose of conducting the activity described under paragraph (1). (3) Which is either of the following: (A) Chartered and licensed as a liability insurance company and authorized to engage in the business of insurance under the laws of any state. (B) Before January 1, 1985, was chartered or licensed and authorized to engage in the business of insurance under the laws of Bermuda or the Cayman Islands and, before that date, has certified to the insurance commissioner of at least one state that it satisfied the capitalization requirements of that state, except that any group is considered to be a risk retention group only if it has been engaged in business continuously since that date and only for the purpose of continuing to provide insurance to cover product liability or completed operations liability as those terms were defined in the Product Liability Risk Retention Act of 1981 before the date of the enactment of the federal Liability Risk Retention Act of 1986. (4) Does not exclude any person from membership in the group solely to provide for members of the group a competitive advantage over that person. (5) Has as its members only persons who comprise the membership of the risk retention group and as its owners only persons who comprise the membership of the risk retention group and who are provided insurance by that group. (6) Whose members are engaged in businesses or activities similar or related with respect to the liability of which those members are exposed by virtue of any related, similar, or common business trade, product, services, premises, or operations. (7) Whose activities do not include the provision of insurance other than for the following: (A) Liability insurance for assuming and spreading all or any portion of the liability of its group members. (B) Reinsurance with respect to the liability of any other risk retention group or any members of that other group that is engaged in businesses or activities so that the group or member meets the requirement described in paragraph (6) from membership in the risk retention group that provides that reinsurance. (8) The name of which includes the phrase “risk retention group.” (l) “State” means any state of the United States or the District of Columbia. (Amended by Stats. 1995, Ch. 352, Sec. 1. Effective January 1, 1996.) - 1300. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Organization of Exchange [1300 - 1315] ( Article 2 enacted by Stats. 1935, Ch. 145. )
Any persons may exchange reciprocal or interinsurance contracts with one another, but only for insurance other than life, title, mortgage, mortgage guaranty, or insolvency insurance.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Organization of Exchange [1300 - 1315] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 1300. Any persons may exchange reciprocal or interinsurance contracts with one another providing insurance, other than life, title, mortgage, mortgage guaranty, or insolvency insurance, among themselves against any loss which may be insured against under other provisions of law. (Amended by Stats. 1971, Ch. 341.) - 1301. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Organization of Exchange [1300 - 1315] ( Article 2 enacted by Stats. 1935, Ch. 145. )
This section defines such persons as subscribers.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Organization of Exchange [1300 - 1315] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 1301. Such persons are termed subscribers. (Enacted by Stats. 1935, Ch. 145.) - 1302. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Organization of Exchange [1300 - 1315] ( Article 2 enacted by Stats. 1935, Ch. 145. )
A domestic corporation has power to enter into the insurance contracts described in this chapter.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Organization of Exchange [1300 - 1315] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 1302. Any domestic corporation, in addition to the rights, powers and franchises specified in its articles of incorporation, has full power and authority to enter into insurance contracts of the kind and character mentioned in this chapter. The right to enter into such contracts is incidental to the purposes for which such corporations are organized and as fully granted as the rights and powers expressly conferred. (Enacted by Stats. 1935, Ch. 145.) - 1303. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Organization of Exchange [1300 - 1315] ( Article 2 enacted by Stats. 1935, Ch. 145. )
An insurance exchange formed by subscribers exchanging contracts is called a reciprocal or interinsurance exchange, and it is treated as the insurer; each subscriber is treated as an insured.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Organization of Exchange [1300 - 1315] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 1303. The organization under which such subscribers so exchange contracts is termed a reciprocal or interinsurance exchange, and shall be deemed the insurer while each subscriber shall be deemed an insured. (Amended by Stats. 1963, Ch. 1649.) - 1305. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Organization of Exchange [1300 - 1315] ( Article 2 enacted by Stats. 1935, Ch. 145. )
Certain insurance contracts may be executed by an authorized attorney-in-fact, agent, or other representative acting under powers of attorney.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Organization of Exchange [1300 - 1315] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 1305. Such contracts may be executed by an attorney-in-fact, agent or other representative duly authorized and acting for such subscribers under powers of attorney. Such authorized person is termed the attorney, and may be a corporation. (Enacted by Stats. 1935, Ch. 145.) - 1306. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Organization of Exchange [1300 - 1315] ( Article 2 enacted by Stats. 1935, Ch. 145. )
The attorney’s principal office must be maintained at a place designated by the subscribers in the power of attorney.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Organization of Exchange [1300 - 1315] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 1306. The principal office of the attorney shall be maintained at a place designated by the subscribers in the power of attorney. (Enacted by Stats. 1935, Ch. 145.) - 1307. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Organization of Exchange [1300 - 1315] ( Article 2 enacted by Stats. 1935, Ch. 145. )
The power of attorney and related contracts may set substitution and revocation rights, impose agreed restrictions, set payment limits for subscribers, and provide how subscriber rights are exercised.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Organization of Exchange [1300 - 1315] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 1307. The power of attorney and contracts made thereunder may: (a) Provide for the right of substitution of attorney and revocation of the contract or power. (b) Impose such restrictions upon the exercise of the power as are agreed upon by the subscribers. (c) Provide for and limit the maximum amount to be paid by subscribers, except that contracts of exchanges writing either liability or workers’ compensation insurance shall be subject to the provisions of Article 6 of this chapter. (d) Provide for the exercise of any right reserved to the subscribers directly or through a board or other body. (Amended by Stats. 2018, Ch. 231, Sec. 6. (AB 2045) Effective January 1, 2019.) - 1308. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Organization of Exchange [1300 - 1315] ( Article 2 enacted by Stats. 1935, Ch. 145. )
The body selected to exercise subscribers’ rights must supervise the exchange’s finances and its operations enough to keep them consistent with the subscriber’s agreement and power of attorney.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Organization of Exchange [1300 - 1315] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 1308. The body exercising the subscribers’ rights shall be selected under such rules as the subscribers adopt. It shall supervise the finances of the exchange and shall supervise its operations to such extent as to assure conformity with the subscriber’s agreement and power of attorney. (Enacted by Stats. 1935, Ch. 145.) - 1309. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Organization of Exchange [1300 - 1315] ( Article 2 enacted by Stats. 1935, Ch. 145. )
The body has authority to audit the exchange’s and attorney-in-fact’s accounts and records, with the exchange paying the cost.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Organization of Exchange [1300 - 1315] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 1309. Such body shall have authority to procure the audit of the accounts and records of the exchange and of the attorney-in-fact, at the expense of the exchange. (Enacted by Stats. 1935, Ch. 145.) - 131. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1.5. Risk Retention [125 - 140] ( Chapter 1.5 added by Stats. 1990, Ch. 1521, Sec. 1. )
Risk retention groups licensed in this state must meet organization, disclosure, governance, and audit-committee requirements, and some contracts need prior notice to the commissioner.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1.5. Risk Retention [125 - 140] ( Chapter 1.5 added by Stats. 1990, Ch. 1521, Sec. 1. ) ## 131. (a) An entity seeking to be licensed in this state as a risk retention group shall be organized under the laws of this state and licensed as a liability insurance company pursuant to Article 3 (commencing with Section 699) of Chapter 1 of Part 2. (b) An entity that has not completed its chartering and licensing as a risk retention group in its domiciliary state is subject to the requirements of Article 8 (commencing with Section 820) of Chapter 1 of Part 2. (c) In addition to the requirements of Article 3 (commencing with Section 699) of Chapter 1 of Part 2, a risk retention group licensed in this state shall submit to the commissioner a feasibility study or plan of operations and all other documentation required by the federal Liability Risk Retention Act of 1986 (15 U.S.C. Sec. 3901 et seq.) to be submitted by a risk retention group to a nonchartering state. (d) In addition to the requirements of Article 3 (commencing with Section 699) of Chapter 1 of Part 2, a risk retention group licensed in this state shall comply with all of the following at the time of licensure, and thereafter: (1) (A) The “board of directors” or “board,” as used in this section, means the governing body of the risk retention group elected by the shareholders or members to establish policy, elect or appoint officers and committees, and make other governing decisions. (B) “Director,” as used in this section, means a natural person designated in the articles of the risk retention group, or designated, elected, or appointed by any other manner, name, or title to act as a director. (2) (A) The board of directors of the risk retention group shall have a majority of independent directors. If the risk retention group is a reciprocal risk retention group, the attorney-in-fact shall be required to adhere to the same standards regarding independence of operation and governance as imposed on the risk retention group’s board of directors and subscribers’ advisory committee under these standards, and, to the extent permissible under this state’s laws, service providers of a reciprocal risk retention group shall contract with the risk retention group and not the attorney-in-fact. (B) No director qualifies as “independent” unless the board of directors affirmatively determines that the director has no “material relationship” with the risk retention group. Each risk retention group shall disclose these determinations to its domestic regulator, at least annually. For this purpose, any person that is a direct or indirect owner of, or subscriber in, the risk retention group, or is an officer, director, or employee, or all three, of an owner and insured, as contemplated by 15 U.S.C. Section 3901(a)(4)(E)(ii) of the federal Liability Risk Retention Act of 1986, is considered to be “independent,” unless some other position of that officer, director, or employee constitutes a “material relationship.” (C) “Material relationship” of a person with the risk retention group includes, but is not limited to, any of the following: (i) The receipt in any one 12-month period of compensation or payment of any other item of value by that person, a member of that person’s immediate family, or any business with which that person is affiliated from the risk retention group or a consultant or service provider to the risk retention group that is greater than, or equal to, 5 percent of the risk retention group’s gross written premium for that 12-month period or 2 percent of its surplus, whichever is greater, as measured at the end of any fiscal quarter falling in a 12-month period. The person or immediate family member of that person is not independent until one year after his or her compensation from the risk retention group falls below the threshold. (ii) A relationship with an auditor as follows: a director or an immediate family member of a director who is affiliated with, or employed in, a professional capacity by a present or former internal or external auditor of the risk retention group is not independent until one year after the end of the affiliation, employment, or auditing relationship. (iii) A relationship with a related entity as follows: a director or immediate family member of a director who is employed as an executive officer of another company where any of the risk retention group’s present executives serve on that other company’s board of directors is not independent until one year after the end of that service or the employment relationship. (3) The term of any material service provider contract with the risk retention group shall not exceed five years. Any contract, or its renewal, shall require the approval of the majority of the risk retention group’s independent directors. The risk retention group’s board of directors shall have the right to terminate any service provider, audit, or actuarial contracts at any time for cause after providing adequate notice as defined in the contract. The service provider contract is deemed material if the amount to be paid for that contract is greater than, or equal to, 5 percent of the risk retention group’s annual gross written premium or 2 percent of its surplus, whichever is greater. (A) For purposes of this standard, “service providers” shall include captive managers, auditors, accountants, actuaries, investment advisers, attorneys, and managing general underwriters or any other party responsible for underwriting, determination of rates, collection of premium, adjusting and settling claims, or the preparation of financial statements. Any reference to “attorneys” does not include defense counsel retained by the risk retention group to defend claims, unless the amount of fees paid to those attorneys are “material” as referenced in this paragraph. (B) A service provider contract meeting the definition of “material relationship” pursuant to paragraph (2) shall not be entered into unless the risk retention group has notified the commissioner in writing of its intention to enter into the transaction at least 30 days prior thereto, and the commissioner has not disapproved the transaction within that period. (4) The risk retention group’s board of directors shall adopt a written policy in the plan of operation as approved by the board that requires the board to do all of the following: (A) Ensure that all owners or insureds, or both, of the risk retention group receive evidence of ownership interest. (B) Develop a set of governance standards applicable to the risk retention group. (C) Oversee the evaluation of the risk retention group’s management, including, but not limited to, the performance of the captive manager, managing general underwriter, or other parties responsible for underwriting, determination of rates, collection of premium, adjusting or settling claims, or the preparation of financial statements. (D) Review and approve the amount to be paid for all material service providers. (E) Review and approve, at least annually, all of the following: (i) The risk retention group’s goals and objectives relevant to the compensation of officers and service providers. (ii) The officers’ and service providers’ performance in light of those goals and objectives. (iii) The continued engagement of the officers and material service providers. (5) The risk retention group shall have an audit committee composed of at least three independent board members as defined in paragraph (2). A nonindependent board member may participate in the activities of the audit committee, if invited by the members, but cannot be a member of that committee. (A) The audit committee shall have a written charter that defines the committee’s purpose, which, at a minimum, shall be to do all of the following: (i) Assist in board oversight of the integrity of the financial statements, the compliance with legal and regulatory requirements, and the qualifications, independence, and performance of the independent auditor and actuary. (ii) Discuss the annual audited financial statements and quarterly financial statements with management. (iii) Discuss the annual audited financial statements with its independent auditor and, if advisable, discuss its quarterly financial statements with its independent auditor. (iv) Discuss policies with respect to risk assessment and risk management. (v) Meet separately and periodically, either directly or through a designated representative of the committee, with management and independent auditors. (vi) Review with the independent auditor any audit problems or difficulties and management’s response. (vii) Set clear hiring policies of the risk retention group as to the hiring of employees or former employees of the independent auditor. (viii) Require the external auditor to rotate the lead or coordinating audit partner having primary responsibility for the risk retention group’s audit as well as the audit partner responsible for reviewing that audit, so that neither individual performs audit services for more than five consecutive fiscal years. (ix) Report regularly to the board of directors. (B) If an audit committee is not designated by the insurer, the insurer’s entire board of directors shall constitute the audit committee. (6) The board of directors shall adopt and disclose governance standards by making the information available through electronic means, such as posting the information on the risk retention group’s Internet Web site, or other means, and providing that information to members and insureds upon request. The information shall include all of the following: (A) A process by which the directors are elected by the owners, insureds, or both. (B) Director qualification standards. (C) Director responsibilities. (D) Director access to management and, as necessary and appropriate, independent advisers. (E) Director compensation. (F) Director orientation and continuing education. (G) The policies and procedures that are followed for management succession. (H) The policies and procedures that are followed for the annual performance evaluation of the board. (7) The board of directors shall adopt and disclose a code of business conduct and ethics for directors, officers, and employees and promptly disclose to the board of directors any waivers of the code for directors or executive officers, including all of the following topics: (A) Conflicts of interest. (B) Matters covered under the corporate opportunity doctrine under the state of domicile. (C) Confidentiality. (D) Fair dealing. (E) Protection and proper use of risk retention group assets. (F) Compliance with all applicable laws, rules, and regulations. (G) Requiring the reporting of any illegal or unethical behavior that affects the operation of the risk retention group. (8) The captive manager, president, or chief executive officer of the risk retention group shall promptly notify the domestic regulator, in writing, if he or she becomes aware of any material noncompliance with any of these governance standards. (e) Domestic risk retention groups, licensed as of December 31, 2013, shall be governed by subdivision (d) on and after January 1, 2015. (Amended by Stats. 2013, Ch. 321, Sec. 1. (AB 1391) Effective January 1, 2014.) - 1310. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Organization of Exchange [1300 - 1315] ( Article 2 enacted by Stats. 1935, Ch. 145. )
The body must be made up of subscribers or agents of subscribers, and no more than one-third of its members may be agents, employees, or shareholders of the attorney.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Organization of Exchange [1300 - 1315] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 1310. Such body shall be composed of subscribers or agents of subscribers. Not more than one-third of the members serving on such body shall be agents, employees or shareholders of the attorney. (Enacted by Stats. 1935, Ch. 145.) - 1310.1. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Organization of Exchange [1300 - 1315] ( Article 2 enacted by Stats. 1935, Ch. 145. )
A reciprocal or interinsurance exchange board operating under Section 1284 must be made up of hospital governing board members, participating attending medical staff members, and health care consumers.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Organization of Exchange [1300 - 1315] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 1310.1. The board of a reciprocal or interinsurance exchange operating pursuant to Section 1284 shall be composed of members of the governing board of the hospital, the participating members of its attending medical staff, and health care consumers. (Added by Stats. 1976, Ch. 1465.) - 1311. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Organization of Exchange [1300 - 1315] ( Article 2 enacted by Stats. 1935, Ch. 145. )
A reciprocal or interinsurance exchange may write surety insurance in this state only if its surplus is at least twice the required paid-in capital amount, and it is also subject to applicable Chapter 1 provisions with stated exceptions.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Organization of Exchange [1300 - 1315] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 1311. A reciprocal or interinsurance exchange may engage in the surety insurance business in this state only provided its surplus is at least twice the amount required as paid-in capital of an incorporated insurer writing the same classes of insurance by the provisions of Section 700.01. Paid-in capital as used in this section shall not include any of the surplus amounts required of incorporated insurers by the provisions of Sections 700.02, 700.03 and 700.05 of this code. Any such reciprocal or interinsurance exchange shall be subject to such of the provisions of Chapter 1, except Sections 12050, 12051, and 12052, Part 4, Division 2, as can be made applicable to the nature of a reciprocal or interinsurance exchange. (Amended by Stats. 1971, Ch. 341.) - 1312. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Organization of Exchange [1300 - 1315] ( Article 2 enacted by Stats. 1935, Ch. 145. )
A qualifying reciprocal or interinsurance exchange may accept reinsurance of risks, and the reinsurance contract must be made between the ceding insurer and the exchange by its attorney in fact.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Organization of Exchange [1300 - 1315] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 1312. (a) Any reciprocal or interinsurance exchange, domestic or foreign, which has obtained a certificate of capability to reinsure or a favorable order under Section 1401.5 and whose subscribers by such order have no liability for assessment, may accept reinsurance of risks for all classes of insurance which it writes in California including the class in which such reinsurance is to be accepted. (b) Contracts accepting such reinsurance shall be entered into between the ceding insurer and the reinsuring reciprocal or interinsurance exchange by its attorney in fact. The ceding insurer need not become a member of or a subscriber to the reinsuring reciprocal or interinsurance exchange and such contracts of reinsurance may contain any or all of the terms and conditions customary in reinsurances of the classes of insurance covered. (Added by Stats. 1965, Ch. 504.) - 1313. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Organization of Exchange [1300 - 1315] ( Article 2 enacted by Stats. 1935, Ch. 145. )
A covered foreign reciprocal or interinsurance exchange may accept reinsurance, and Chapter 504 of the Statutes of 1965 does not limit or affect that right.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Organization of Exchange [1300 - 1315] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 1313. Nothing in Chapter 504 of the Statutes of 1965 shall limit or affect the right of an admitted foreign reciprocal or interinsurance exchange to accept reinsurance. (Added by Stats. 1965, Ch. 1805.) - 1314. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Organization of Exchange [1300 - 1315] ( Article 2 enacted by Stats. 1935, Ch. 145. )
A qualifying reciprocal or interinsurance exchange may issue certain insurance policies without making the insured join the exchange, and its authorized representatives have the same authority to act for the insured as allowed by filed documents.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Organization of Exchange [1300 - 1315] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 1314. Any reciprocal or interinsurance exchange, domestic or foreign, which has obtained a certificate of surplus under Section 1401, and whose subscribers by such order have no liability for assessment, may issue a policy of insurance required under Article 4 (commencing with Section 11620) of Chapter 1 of Part 3 of Division 2 of this code without requiring such insured to become a member of or a subscriber to such reciprocal or interinsurance exchange. The attorney-in-fact, agent, or other representatives duly authorized and acting for the regular subscribers of such reciprocal or interinsurance exchange, shall have the same power and authority to act for any such person becoming an insured under Article 4 (commencing with Section 11620) of Chapter 1 of Part 3 of Division 2 of this code as authorized or required under any documents required to be filed with the commissioner under Article 3 (commencing with Section 1320) of Chapter 3 of Part 2 of Division 1 of this code. (Added by Stats. 1969, Ch. 103.) - 1315. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Organization of Exchange [1300 - 1315] ( Article 2 enacted by Stats. 1935, Ch. 145. )
A reciprocal exchange or interinsurance exchange may borrow money for organization, surplus funds, or business purposes, but only under a written agreement and subject to commissioner approval and other limits.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Organization of Exchange [1300 - 1315] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 1315. A reciprocal exchange or interinsurance exchange may borrow money to defray the expenses of its organization, provide it with surplus funds, or for any purpose of its business, upon a written agreement that the money is required to be repaid only out of the exchange’s surplus in excess of that stipulated in the agreement. The agreement may provide for fixed or variable interest not exceeding an amount allowed by the commissioner, which interest shall or shall not constitute a liability of the exchange as to its funds other than the excess that is stipulated in the agreement. Any agreement of this type shall provide that all interest payments and principal repayments require prior approval by the commissioner. Unless otherwise approved by the commissioner, written agreements evidencing this borrowed money shall not be issued in units of less than ten thousand dollars ($10,000). Unless otherwise allowed by the commissioner, no commission or promotion expense shall be paid in connection with any loan of this type. An agreement to borrow money to provide surplus funds, or for any business purpose, may be termed a surplus note. No surplus note or other agreement may be issued unless it conforms to the requirements set forth at the time the note is issued in the Accounting Practices and Procedures Manual adopted by the National Association of Insurance Commissioners for the reporting of agreements as surplus and not as debt in the financial statements required to be filed by an insurer with the commissioner. No permit or other agreement shall constitute authorization or approval for any other issuance of securities that is connected to the note or agreement in any way. (Added by Stats. 2004, Ch. 4, Sec. 1. Effective January 21, 2004.) - 132. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1.5. Risk Retention [125 - 140] ( Chapter 1.5 added by Stats. 1990, Ch. 1521, Sec. 1. )
Risk retention groups from other states must file notice and required materials with the commissioner, pay fees, report premiums, follow California law, and avoid certain insurance sales and coverage.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1.5. Risk Retention [125 - 140] ( Chapter 1.5 added by Stats. 1990, Ch. 1521, Sec. 1. ) ## 132. Risk retention groups chartered, incorporated, or licensed in states other than this state and seeking to do business as a risk retention group in this state shall file a notice of operation with the commissioner of its intention to do business in this state. The notice shall be filed with the commissioner within 60 days of the filing by the group of any notice filed with its chartering state of its intention to do business in this state, but in no event may a notice of intended operation be filed with the commissioner less than 60 days prior to the group commencing business in this state. In doing business in this state the risk retention group shall observe and abide by the laws of this state including the following: (a) A risk retention group shall submit to the commissioner all of the following: (1) A statement identifying the state or states in which the risk retention group is chartered and licensed as a liability insurance company, date of chartering, its principal place of business, and other information, including information on its membership, as the commissioner of this state may require to verify that the risk retention group is qualified under subdivision (k) of Section 130. (2) A copy of its plan of operations or a feasibility study and revisions of the plan or study submitted to the state in which the risk retention group is chartered and licensed. However, the provision relating to the submission of a plan of operation or a feasibility study does not apply with respect to any line or classification of liability insurance that (A) was defined in the Product Liability Risk Retention Act of 1981 before October 27, 1986, and (B) was offered before that date by any risk retention group that had been chartered and operating for not less than three years before that date. (3) A statement of registration that designates the commissioner as its agent for the purpose of receiving service of legal documents or process. (4) A registration filing fee of one thousand one hundred ninety-six dollars ($1,196) shall accompany the statement of registration, which shall be deposited in the Risk Retention Administration Account, which is hereby created within the Insurance Fund. Notwithstanding Section 13340 of the Government Code, moneys in the account are continuously appropriated to the department for purposes of this chapter. (b) Any risk retention group within this state shall submit to the commissioner all of the following: (1) Upon commencement of business within this state and annually thereafter, a copy of the group’s annual financial statement submitted to the state in which the risk retention group is chartered and licensed, which shall be certified by an independent public accountant and contain a statement of opinion on loss and loss adjustment expense reserves made by a member of the American Academy of Actuaries or a qualified loss reserve specialist. (2) Upon request by the commissioner, a copy of each examination of the risk retention group as certified by the commissioner or public official conducting the examination and all documentation received as part of the examination. (3) Upon request by the commissioner, a copy of any outside audit performed with respect to the risk retention group. (c) (1) As authorized under the federal Liability Risk Retention Act of 1986 (15 U.S.C. Sec. 3902 (a)(1)(B)), each risk retention group is liable for the payment of premium taxes and taxes on premiums for business done or located within this state, and shall report to the commissioner the gross premiums written, less returned premiums, on business done within this state. The risk retention group is subject to taxation, and any applicable fines and nonconformance fees related thereto, on the same basis as a foreign admitted insurer. Nonconformance fees shall be paid to the department and deposited in the Risk Retention Administration Account within the Insurance Fund. (2) To the extent licensed surplus line brokers are utilized pursuant to Chapter 6 (commencing with Section 1760) of Part 2, they shall report to the commissioner the premiums for direct business for risks resident or located within this state that those licensees have placed with or on behalf of, a risk retention group not chartered in this state. (d) Any risk retention group and its agents and representatives shall comply with Article 6.5 (commencing with Section 790) of Chapter 1 of Part 2. (e) Any risk retention group shall comply with the laws of this state regarding deceptive, false, or fraudulent acts or practices. However, if the commissioner seeks an injunction regarding that conduct, the injunction shall be obtained from a court of competent jurisdiction. (f) Any risk retention group shall submit to an examination upon request by the commissioner to determine its financial condition if the commissioner of the jurisdiction in which the group is chartered and licensed has not initiated an examination or does not initiate an examination within 60 days after a request by the commissioner of this state. (g) Every application form for insurance from a risk retention group and every policy issued by a risk retention group shall contain in 10-point type on the front page and the declaration page, the following notice: “NOTICE This policy is issued by your risk retention group. Your risk retention group may not be subject to all of the insurance laws and regulations of your state. State insurance insolvency guaranty funds are not available for your risk retention group.” (h) The following acts by a risk retention group are hereby prohibited: (1) The solicitation or sale of insurance by a risk retention group to any person who is not eligible for membership in that group. (2) The solicitation or sale of insurance by, or operation of, a risk retention group that is in a hazardous financial condition. (i) A risk retention group may not offer insurance policy coverage prohibited by Section 533.5 or declared unlawful by the Supreme Court of California. (j) The risk retention group shall make its initial registration by filing the materials specified in subdivision (a). The initial registration is valid until December 31 of the year in which it was made, as long as the risk retention group is in compliance with this chapter. To maintain the registration in force, the risk retention group shall continue in compliance with this chapter and shall file the following items with the commissioner on or before December 31 of each year: (1) An annual reporting statement on a form prescribed by the commissioner. (2) An annual renewal fee to be determined by the commissioner, limited to the actual cost of administering this section, not to exceed three hundred dollars ($300). (3) Any other information required by the commissioner to determine whether the risk retention group is in compliance with the requirements of this chapter. (k) The risk retention group shall notify the commissioner in writing of any changes in the information provided according to subdivision (a) within 30 days of the effective date of the change. (Amended by Stats. 2017, Ch. 534, Sec. 2. (AB 1699) Effective January 1, 2018.) - 1320. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Filing of Documents [1320 - 1330] ( Article 3 enacted by Stats. 1935, Ch. 145. )
The attorney for each admitted reciprocal or interinsurance exchange must verify and file specified forms with the commissioner. The commissioner may reject forms for certain defects, and the insurer may not use a form after final disapproval.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Filing of Documents [1320 - 1330] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 1320. The attorney of every admitted reciprocal or interinsurance exchange shall verify and cause to be filed with the commissioner copies of the following forms used by the exchange: (a) The form of every amendment to, revision of, or substitution for the power of attorney in use at the time of admission. (b) The form of each application for insurance and the form of each contract for exchange of indemnity which would have to be filed with or approved by the commissioner if such insurer were a capital stock insurer, including where applicable the rates to be used therewith. (c) Every amendment, revision or replacement of forms described in subdivision (b). (d) Such other specific forms of applications for insurance or specific contracts for exchange of indemnity as the commissioner may from time to time by written order require be filed. The commissioner may disapprove of any form filed in accordance with this section if: (1) It be contrary to law, or (2) He finds it contains any material which is unintelligible, uncertain, unfair, ambiguous, or obtuse, or likely to mislead a person to whom the form is offered, delivered, or issued. The procedure for such disapproval shall be that specified in Section 12957 for withdrawal of approval of previously approved forms of other insurers. It shall be unlawful for such insurer to use any such form after such disapproval has become final. (Amended by Stats. 1965, Ch. 1728.) - 1321. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Filing of Documents [1320 - 1330] ( Article 3 enacted by Stats. 1935, Ch. 145. )
If an exchange name does not include “interinsurance,” “reciprocal,” or “exchange,” its forms must print “an interinsurance exchange” prominently under the name.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Filing of Documents [1320 - 1330] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 1321. If the name of the exchange does not contain either the words “interinsurance,” “reciprocal” or “exchange,” then such forms shall have printed under such name the words “an interinsurance exchange” in a prominent place on each of such forms. (Enacted by Stats. 1935, Ch. 145.) - 1322. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Filing of Documents [1320 - 1330] ( Article 3 enacted by Stats. 1935, Ch. 145. )
Before admission, the attorney must file a verified declaration with the commissioner and include the listed information and documents.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Filing of Documents [1320 - 1330] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 1322. The attorney prior to admission shall file with the commissioner a declaration verified by his oath or, where such attorney is a corporation, by the oath of its duly authorized officers. Such declaration shall set forth or have annexed thereto: (a) The name of the attorney and the name under which contracts are to be made. (b) The location of the principal office of the exchange. (c) The classes of insurance to be exchanged. (d) A copy of each form of policy under or by which insurance is to be exchanged. (e) A copy of the form of the power of attorney or agreement under and by which such insurance is to be exchanged. (f) A statement that executed contracts or bona fide applications, to be concurrently effective, have been made for the exchange of indemnities by at least 100 separate subscribers, except that such statement shall not be required for organizations operating pursuant to Section 1284. (g) In the case of employer’s liability or workmen’s compensation insurance, a statement that there have been executed contracts or bona fide applications, to be concurrently effective, representing annual payroll having a total of not less than one million dollars ($1,000,000). (h) A statement that there are in the possession of such attorney subject to the supervision of the advisory board, assets conforming to the requirements of Article 5 of this chapter. (i) A financial statement under oath in the form prescribed by the commissioner for the annual statement. (j) The instrument authorizing service of process as provided in this chapter. (k) A certificate showing any deposits of funds or securities. (Amended by Stats. 1977, Ch. 904.) - 1323. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Filing of Documents [1320 - 1330] ( Article 3 enacted by Stats. 1935, Ch. 145. )
The attorney must file a written instrument with the commissioner at the same time as the section 1322 declaration is filed.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Filing of Documents [1320 - 1330] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 1323. Concurrently with the filing of the declaration provided for by the terms of section 1322 the attorney shall file with the commissioner an instrument in writing executed by him, providing that after the issuance of the certificate of authority actions against the exchange may be brought either in the county in which the person or property insured is located, or in which the exchange has its principal office or place of business in the State; and also providing that service of process may be had upon the attorney-in-fact or upon the commissioner in suits against the exchange. (Enacted by Stats. 1935, Ch. 145.) - 1324. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Filing of Documents [1320 - 1330] ( Article 3 enacted by Stats. 1935, Ch. 145. )
The attorney must file a bond with the commissioner at the same time as the declaration under Section 1322, unless Section 1330 provides אחרת.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Filing of Documents [1320 - 1330] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 1324. Except as provided in Section 1330, the attorney, concurrently with the filing of the declaration provided for in Section 1322, also shall file with the commissioner a bond, approved by the commissioner, in favor of the people of the State of California. (Amended by Stats. 1947, Ch. 578.) - 1325. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Filing of Documents [1320 - 1330] ( Article 3 enacted by Stats. 1935, Ch. 145. )
The attorney must execute the bond with an admitted surety insurer as surety.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Filing of Documents [1320 - 1330] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 1325. Such bond shall be executed by the attorney with an admitted surety insurer as surety. (Amended by Stats. 1947, Ch. 578.) - 1325.5. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Filing of Documents [1320 - 1330] ( Article 3 enacted by Stats. 1935, Ch. 145. )
An attorney may deposit qualifying securities with the commissioner instead of posting the bond.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Filing of Documents [1320 - 1330] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 1325.5. Such attorney may deposit with the commissioner, in lieu of the bond executed by him, securities of a value equal to the required amount of the bond and of the kinds set forth in sections 1170 and 1240. Such deposit shall be subject to the provisions of Article 11, Chapter 1, Part 2, Division 1, of this code. Such deposit shall be subject to levy of execution upon judgments against the attorney. (Added by Stats. 1937, Ch. 732.) - 1326. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Filing of Documents [1320 - 1330] ( Article 3 enacted by Stats. 1935, Ch. 145. )
An attorney’s bond must be $50,000 and must secure faithful accounting for money and property handled under the power of attorney and exchange rules.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Filing of Documents [1320 - 1330] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 1326. The attorney’s bond shall be in the penal sum of fifty thousand dollars ($50,000), conditioned that the attorney will faithfully account for all moneys and other property which come into his or her hands or are handled by him or her under the terms of the power of attorney and the rules of the exchange, and that the attorney will neither withdraw nor cause to be withdrawn nor appropriate for his or her own use, from the funds of the exchange, anything of value to which he or she is not entitled under the terms of the power of attorney and the rules. (Amended by Stats. 1982, Ch. 517, Sec. 282.) - 1327. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Filing of Documents [1320 - 1330] ( Article 3 enacted by Stats. 1935, Ch. 145. )
Certain subscribers, or the receiver or trustee in liquidation, may sue on the attorney’s bond and enforce liability under it.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Filing of Documents [1320 - 1330] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 1327. The attorney’s bond may be sued upon in one and the same action either by any subscriber or any number of subscribers suffering loss through a violation of its conditions or by the receiver or trustee in liquidation of the exchange. Liability thereunder may be enforced by any one or more of such parties. (Enacted by Stats. 1935, Ch. 145.) - 1328. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Filing of Documents [1320 - 1330] ( Article 3 enacted by Stats. 1935, Ch. 145. )
Any amount recovered on the attorney’s bond must be deposited into, and becomes part of, the exchange’s funds.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Filing of Documents [1320 - 1330] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 1328. Any amount recovered on the attorney’s bond shall be deposited in and become a part of the funds of the exchange. (Enacted by Stats. 1935, Ch. 145.) - 1329. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Filing of Documents [1320 - 1330] ( Article 3 enacted by Stats. 1935, Ch. 145. )
A qualifying bond may be filed with the commissioner instead of another bond required by this chapter.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Filing of Documents [1320 - 1330] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 1329. Where provision is made, by the power of attorney executed by the subscribers or the rules adopted by the exchange, for the bonding of the attorney-in-fact against fraud and dishonesty with a bond executed as prescribed in Section 1325 and conditioned as provided by this chapter and in a penal sum at least equal to the amount set forth in Section 1326, such bond may be filed with the commissioner in lieu of any other bond required by this chapter and shall be actionable in similar manner and for similar purposes as such other bond. (Amended by Stats. 1947, Ch. 578.) - 133. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1.5. Risk Retention [125 - 140] ( Chapter 1.5 added by Stats. 1990, Ch. 1521, Sec. 1. )
Risk retention groups may not join or pay into California insurance insolvency guaranty funds, receive benefits from them, or participate in certain state insurance plans.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1.5. Risk Retention [125 - 140] ( Chapter 1.5 added by Stats. 1990, Ch. 1521, Sec. 1. ) ## 133. (a) No risk retention group shall be required or permitted to join or contribute financially to any insurance insolvency guaranty fund, or similar mechanism, in this state, nor shall any risk retention group, or its insureds or claimants against its insureds, receive any benefit from any such fund for claims arising under the insurance policies issued by that risk retention group. (b) When a purchasing group obtains insurance covering its members’ risks from an insurer not authorized in this state or a risk retention group, no such risks, wherever located, shall be covered by any insurance guaranty fund or similar mechanism in this state. (c) When a purchasing group obtains insurance covering its members’ risks from an authorized admitted insurer, only risks located in this state shall be covered by the state insurance guaranty fund. (d) A risk retention group shall not participate in this state’s joint underwriting associations, California Automobile Assigned Risk Plan, Fair Access to Insurance Requirements Plan, and market assistance plans. (Added by Stats. 1990, Ch. 1521, Sec. 1.) - 1330. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Filing of Documents [1320 - 1330] ( Article 3 enacted by Stats. 1935, Ch. 145. )
If an exchange’s home office is outside California and the attorney has filed the bond in the home state, a certified copy, duplicate, or an affidavit from the home-state insurance authority may be filed with the commissioner instead of the bond.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Filing of Documents [1320 - 1330] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 1330. Where the home office of an exchange is located outside of this State and the attorney files such a bond in the home State, there may be filed with the commissioner, in lieu of such bond, either a certified copy or duplicate thereof or an affidavit from the insurance authority of the home State to the effect that such a bond has been filed with it. (Enacted by Stats. 1935, Ch. 145.) - 134. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1.5. Risk Retention [125 - 140] ( Chapter 1.5 added by Stats. 1990, Ch. 1521, Sec. 1. )
A purchasing group that wants to do business in this state must give the commissioner notice before doing so and later keep filing required registration and annual information.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1.5. Risk Retention [125 - 140] ( Chapter 1.5 added by Stats. 1990, Ch. 1521, Sec. 1. ) ## 134. (a) A purchasing group that intends to do business in this state shall, prior to doing business, furnish to the commissioner notice, doing all of the following: (1) Identify the state in which the group is domiciled. (2) Specify the lines and classifications of liability insurance that the purchasing group intends to purchase. (3) Identify the insurance company or companies from which the group intends to purchase its insurance and the domicile of that company. (4) Specify the method by which, and the person or persons, if any, through whom, insurance will be offered to its members whose risks are resident or located in this state. (5) Identify the principal place of business of the group. (6) Provide other information that may be required by the commissioner to verify that the purchasing group is qualified under subdivision (i) of Section 130. (b) The purchasing group shall register with and designate the commissioner as its agent solely for the purpose of receiving service of legal documents or process, for which a filing fee in the amount of five hundred forty dollars ($540) shall be submitted to the commissioner for deposit in the Risk Retention Administration Account within the Insurance Fund, except that these requirements do not apply in the case of a purchasing group that did all of the following: (1) Was domiciled before April 1, 1986, and is domiciled on and after October 27, 1986, in any state of the United States. (2) Before October 27, 1986, purchased insurance from an insurance carrier licensed in any state, and since October 27, 1986, purchased its insurance from an insurance carrier licensed in any state. (3) Was a purchasing group under the requirements of the Product Liability Risk Retention Act of 1981 (15 U.S.C. Sec. 3901 et seq.) before October 27, 1986. (4) Does not purchase insurance that was not authorized for purposes of an exemption under that act, as in effect before October 27, 1986. (c) Any purchasing group that was doing business in this state prior to the enactment of this chapter shall, within 30 days after January 1, 1990, furnish notice to the commissioner pursuant to subdivision (a) and furnish information that may be required pursuant to subdivisions (b) and (c). (d) Each purchasing group that is required to give notice pursuant to subdivision (a) shall also furnish information that may be required by the commissioner to: (1) Verify that the entity qualifies as a purchasing group. (2) Determine where the purchasing group is located. (3) Determine appropriate tax treatment. (4) Verify that the purchasing group is in compliance with this chapter. (e) Any purchasing group that intends to do business in this state shall make its initial registration by submitting to the commissioner the materials listed in subdivision (a). The registration is valid until December 31 of the year in which it was made, as long as the purchasing group is in compliance with this chapter. To maintain the registration, the purchasing group shall continue to comply with this chapter. Additionally, the purchasing group shall file the following documents with the commissioner on or before January 31 of each year: (1) An annual reporting statement on a form prescribed by the commissioner. (2) An annual renewal fee, to be determined by the commissioner, limited to the actual cost of administering this section, not to exceed two hundred dollars ($200). (3) Any other information required by the commissioner to determine whether the purchasing group is in compliance with this chapter or other applicable provisions of this code. (f) The purchasing group shall notify the commissioner in writing of any changes in the information provided according to subdivision (a) within 30 days of the effective date of the change. (Amended by Stats. 2017, Ch. 534, Sec. 3. (AB 1699) Effective January 1, 2018.) - 135. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1.5. Risk Retention [125 - 140] ( Chapter 1.5 added by Stats. 1990, Ch. 1521, Sec. 1. )
A purchasing group must not offer insurance coverage that Section 533.5 prohibits or that the California Supreme Court has declared invalid. If it buys liability insurance from an insurer not admitted in California or a risk retention group, it must tell affected members two things: the risk is not covered by the state insolvency guaranty fund, and the insurer or risk retention group may not be subject to all California insurance laws.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1.5. Risk Retention [125 - 140] ( Chapter 1.5 added by Stats. 1990, Ch. 1521, Sec. 1. ) ## 135. (a) No purchasing group may offer insurance policy coverage prohibited by Section 533.5 or declared invalid by the Supreme Court of California. (b) A purchasing group which obtains liability insurance from an insurer not admitted in this state or a risk retention group shall inform each of the members of the group which have a risk resident or located in this state all of the following: (1) The risk is not protected by an insurance insolvency guaranty fund in this state. (2) The risk retention group or such insurer may not be subject to all insurance laws and regulations of this state. (Amended by Stats. 1991, Ch. 1040, Sec. 5.) - 1350. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Certificate of Authority [1350 - 1350.5] ( Article 4 enacted by Stats. 1935, Ch. 145. )
The commissioner must issue a certificate of authority to the attorney when the chapter’s requirements are met and the application fee is paid.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Certificate of Authority [1350 - 1350.5] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 1350. The commissioner shall issue a certificate of authority to the attorney upon compliance with the requirements of this chapter, and the payment of the application fee prescribed by Article 3 (commencing with Section 699) of Chapter 1 of Part 2 of Division 1. The certificate shall authorize the making, by the attorney, of contracts of insurance under this chapter. It shall also specify all of the following: (a) The classes of insurance to be effected. (b) The name of the attorney. (c) The location of the principal office. (d) The name under which the contracts of insurance are issued. (Amended by Stats. 1983, Ch. 142, Sec. 85.) - 1350.5. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Certificate of Authority [1350 - 1350.5] ( Article 4 enacted by Stats. 1935, Ch. 145. )
If the attorney is substituted or specified certificate information changes, the attorney must apply to the commissioner for an amended certificate of authority.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Certificate of Authority [1350 - 1350.5] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 1350.5. In the event of substitution of attorney or a change in any of the matters specified in the certificate of authority pursuant to Section 1350, the attorney shall apply to the commissioner for an amended certificate of authority. (Added by Stats. 1945, Ch. 495.) - 13500. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Suspension of Privilege of Appearing or Practicing Before the Commissioner [13500 - 13505] ( Article 7 added by Stats. 1986, Ch. 1328, Sec. 7. )
The commissioner may temporarily or permanently deny a person’s privilege to appear or practice before the department, after notice and an opportunity for hearing, if the person lacks qualifications, lacks character or integrity, or willfully violates or aids a violation of the code or its regulations.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Suspension of Privilege of Appearing or Practicing Before the Commissioner [13500 - 13505] ( Article 7 added by Stats. 1986, Ch. 1328, Sec. 7. ) ## 13500. The commissioner may deny, temporarily or permanently, the privilege of appearing or practicing before the department in any way to any person, other than an attorney acting in that capacity, who is found by the commissioner, after notice of and opportunity for hearing, to be subject to any of the following: (a) The person does not possess the requisite qualifications to represent others. (b) The person is lacking in character or integrity or has engaged in unethical or improper professional conduct. (c) The person has willfully violated, or willfully aided and abetted the violation of any provision of this code, or the rules and regulations promulgated thereunder. (Added by Stats. 1986, Ch. 1328, Sec. 7.) - 13501. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Suspension of Privilege of Appearing or Practicing Before the Commissioner [13500 - 13505] ( Article 7 added by Stats. 1986, Ch. 1328, Sec. 7. )
People with certain revoked or suspended professional licenses, or certain criminal convictions, must be suspended from appearing or practicing before the commissioner.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Suspension of Privilege of Appearing or Practicing Before the Commissioner [13500 - 13505] ( Article 7 added by Stats. 1986, Ch. 1328, Sec. 7. ) ## 13501. Any person whose license to practice as an accountant, actuary, or other expert has been revoked or suspended in any state, territory, district, commonwealth, or possession, or any person who has been convicted of a felony, or of a misdemeanor involving moral turpitude, shall be forthwith suspended from appearing or practicing before the commissioner. A suspension, revocation, or conviction within the meaning of this article shall be deemed to have occurred when the suspending, revoking, or convicting agency or tribunal enters its judgment or order, regardless of whether appeal is pending or could be taken, and includes a judgment or order on a plea of nolo contendere. (Added by Stats. 1986, Ch. 1328, Sec. 7.) - 13502. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Suspension of Privilege of Appearing or Practicing Before the Commissioner [13500 - 13505] ( Article 7 added by Stats. 1986, Ch. 1328, Sec. 7. )
A suspended or disqualified person may apply for reinstatement, and the commissioner may grant a hearing or reinstate the person under the stated conditions.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Suspension of Privilege of Appearing or Practicing Before the Commissioner [13500 - 13505] ( Article 7 added by Stats. 1986, Ch. 1328, Sec. 7. ) ## 13502. (a) An application for reinstatement of a person permanently suspended or disqualified under Section 13500 may be made at any time, and the applicant may, in the commissioner’s discretion, be afforded a hearing. However, the suspension or disqualification shall continue unless and until the applicant has been reinstated by the commissioner for good cause shown. (b) Any person suspended under Section 13501 shall be reinstated by the commissioner, upon appropriate application, if all the grounds for application of the provisions of Section 13501 are subsequently removed by a reversal of the conviction or termination of the suspension or revocation. An application for reinstatement on any other grounds by any person suspended under Section 13501 may be filed at any time and the applicant shall be afforded an opportunity for a hearing in the matter. However, the suspension shall continue unless and until the applicant has been reinstated by the commissioner for good cause shown. (Added by Stats. 1986, Ch. 1328, Sec. 7.) - 13503. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Suspension of Privilege of Appearing or Practicing Before the Commissioner [13500 - 13505] ( Article 7 added by Stats. 1986, Ch. 1328, Sec. 7. )
Certain people appearing or practicing before the commissioner must promptly file a copy of specified orders or findings, plus any related agency or tribunal opinion or statement.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Suspension of Privilege of Appearing or Practicing Before the Commissioner [13500 - 13505] ( Article 7 added by Stats. 1986, Ch. 1328, Sec. 7. ) ## 13503. Any person appearing or practicing before the commissioner who has been the subject of an order, judgment, decree, or finding relevant to Section 13501 shall promptly file with the commissioner a copy thereof, together with any related opinion or statement of the agency or tribunal involved. Failure to make this filing shall not impair the operation of any other provision of this article. (Added by Stats. 1986, Ch. 1328, Sec. 7.) - 13504. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Suspension of Privilege of Appearing or Practicing Before the Commissioner [13500 - 13505] ( Article 7 added by Stats. 1986, Ch. 1328, Sec. 7. )
A proceeding under one section of this article does not stop a proceeding under another section.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Suspension of Privilege of Appearing or Practicing Before the Commissioner [13500 - 13505] ( Article 7 added by Stats. 1986, Ch. 1328, Sec. 7. ) ## 13504. Any proceeding brought under any section of this article shall not preclude a proceeding under any other section. (Added by Stats. 1986, Ch. 1328, Sec. 7.) - 13505. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Suspension of Privilege of Appearing or Practicing Before the Commissioner [13500 - 13505] ( Article 7 added by Stats. 1986, Ch. 1328, Sec. 7. )
Hearings under this article are closed to the public unless the commissioner directs otherwise.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Suspension of Privilege of Appearing or Practicing Before the Commissioner [13500 - 13505] ( Article 7 added by Stats. 1986, Ch. 1328, Sec. 7. ) ## 13505. All hearings held under this article shall be closed to the public, unless the commissioner on the commissioner’s own motion, or at the request of a party, otherwise directs. (Amended by Stats. 2021, Ch. 50, Sec. 260. (AB 378) Effective January 1, 2022.) - 13550. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Insurance Payment Intercept Program [13550 - 13555] ( Article 8 added by Stats. 2018, Ch. 439, Sec. 1. )
Insurers must report certain insurance claimants who owe past-due child support to the Department of Child Support Services, and must follow child support lien or withholding notices in covered cases.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Insurance Payment Intercept Program [13550 - 13555] ( Article 8 added by Stats. 2018, Ch. 439, Sec. 1. ) ## 13550. (a) An insurer shall cooperate with the Department of Child Support Services to identify claimants who are also obligors who owe past-due child support and report those claimants to the Department of Child Support Services. (b) An insurer shall identify and report a claimant to the Department of Child Support Services if the claim seeks an economic benefit for an obligor who owes past-due child support. (1) An “economic benefit” under a life insurance policy, disability income insurance policy, or annuity means a payment totaling at least one thousand dollars ($1,000) in which an individual is paid as the payee or copayee for any of the following: (A) A claim by a beneficiary under a life insurance policy. (B) A payment of the cash surrender value of a life insurance policy or annuity. (C) A payment to an annuitant. (D) A payment from a disability income insurance policy. (E) A loan against the cash value or surrender value of an insurance policy or annuity, excluding loans for premium payments. (2) An “economic benefit” under a property and casualty insurance policy means a payment totaling at least one thousand dollars ($1,000) under a liability insurance policy or underinsured motorist policy issued by an insurance company authorized to do business in this state. An “economic benefit” under a property and casualty insurance policy does not include payments to replace or repair lost or damaged property. (c) Notwithstanding subdivision (b), and except as provided in subdivision (h), a claimant with any of following economic benefits shall not be reported: (1) Payments resulting from an accelerated death benefit. (2) A claim for benefits assigned to be paid to a health care provider or facility for actual medical expenses owed by the insured that are not otherwise paid or reimbursed, or a payment made after the claimant provides proof of the amount actually paid by the claimant to a health care provider if the amount is at least as much as the insurance payment, but not any amounts billed but not paid. (3) A claim for benefits to be paid under a limited benefit insurance policy that provides one of the following: (A) Coverage for one or more specified diseases or illnesses. (B) Dental or vision benefits. (C) Hospital indemnity or other fixed indemnity coverage. (D) Accident only coverage. (4) A claim for benefits that are the result of a state of emergency, as defined in Section 8558 of the Government Code. (5) A claim for benefits under a workers’ compensation policy, except as provided in Section 17510 of the Family Code and Section 138.5 of the Labor Code. (d) An insurer in California subject to the requirements of this article shall identify and report a claimant to the Department of Child Support Services if either of the following apply: (1) A payment is made to the owner of a life policy or annuity that was issued to the owner while residing or located in California. (2) A beneficiary making a claim resides or is located in California. (e) Withholding from a qualifying disability insurance payment made to an obligor who owes past-due child support shall be limited to 50 percent of the claim for benefits. (f) (1) If an insurer identifies a claimant as an obligor who owes past-due child support and reports the claimant to the Department of Child Support Services, the Department of Child Support Services shall provide the insurer with either of the following to secure the payment of the amount of past-due child support: (A) A notice of child support lien. (B) An income-withholding order. (2) Upon receiving notice from the Department of Child Support Services that a reported insurance claim is payable to an obligor with a child support delinquency, an insurer shall comply with the requirements of the notice. (3) Notwithstanding paragraph (2), this section does not require an insurer to comply with a notice from the Department of Child Support Services on a reported insurance claim payable to an obligor with a child support delinquency if the notice is received after the insurer has paid the claim. (g) For the purposes of this section, “insurer” includes a fraternal benefit society. (h) This section does not prohibit an insurer from cooperating voluntarily with the Department of Child Support Services to identify claimants who are also obligors who owe past-due child support and report those claimants to the Department of Child Support Services. (Amended by Stats. 2020, Ch. 184, Sec. 47. (SB 1255) Effective January 1, 2021. Operative January 1, 2020, pursuant to Section 13555.) - 13551. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Insurance Payment Intercept Program [13550 - 13555] ( Article 8 added by Stats. 2018, Ch. 439, Sec. 1. )
Certain insurers, insured individuals, and authorized reporting organizations are protected from liability when they act in good faith and follow this article’s payment-intercept rules.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Insurance Payment Intercept Program [13550 - 13555] ( Article 8 added by Stats. 2018, Ch. 439, Sec. 1. ) ## 13551. Notwithstanding any other law, an insurer or insurance company, its directors, agents, and employees, an insured individual on whose behalf the company makes a payment, and a central reporting organization and its respective employees and agents authorized by an insurer to act on its behalf who, in good faith, release information in accordance with this article, withhold amounts from payment based on the latest information supplied by the Department of Child Support Services pursuant to Section 13550, or make disbursements in accordance with Section 13550 shall be in compliance with this section and any applicable fair claim settlement act, and shall be immune from any liability to the claimant or other interested party arising from the payment. (Added by Stats. 2018, Ch. 439, Sec. 1. (AB 2802) Effective January 1, 2019. Operative January 1, 2020, pursuant to Section 13555.) - 13552. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Insurance Payment Intercept Program [13550 - 13555] ( Article 8 added by Stats. 2018, Ch. 439, Sec. 1. )
Data under this section may be used only to identify claimants who are also obligors owing past-due child support, and the Department of Child Support Services must destroy data if no match is found.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Insurance Payment Intercept Program [13550 - 13555] ( Article 8 added by Stats. 2018, Ch. 439, Sec. 1. ) ## 13552. (a) Data obtained pursuant to this article shall only be used for the purpose of identifying claimants who are also obligors who owe past-due child support. If the Department of Child Support Services does not identify an obligor in the data obtained pursuant to this article with a child support obligor, the Department of Child Support Services shall not maintain that data and shall immediately destroy that data. (b) An insurer that provides, attempts to provide, or in any way accesses data pursuant to this article shall comply with all applicable state and federal laws for the protection of the privacy and the security of that data, including, but not limited to, the Insurance Information and Privacy Protection Act (Article 6.6 (commencing with Section 791) of Chapter 1 of Part 2 of Division 1), the Information Practices Act of 1977 (Chapter 1 (commencing with Section 1798) of Title 1.8 of Part 4 of Division 3 of the Civil Code), and the federal Health Insurance Portability and Accountability Act of 1996 (Public Law 104-191). (c) The Department of Child Support Services shall consider any information received from an insurer as confidential. That information shall be used or disclosed only for the purpose of collecting past-due child support. (d) Information provided by the Department of Child Support Services to an insurer, or its designated agent, for the purpose of identifying claimants who are also obligors shall not be used by the insurer or its agent for any other purpose, and shall not be disclosed to any person except to the extent necessary to identify and report a claimant who owes past-due child support. This subdivision does not apply to information contained in a child support lien or an income-withholding order received from the Department of Child Support Services after the insurer has identified and reported a claimant. (e) This section does not prohibit the Department of Child Support Services from disclosing aggregate data that does not reveal personally identifying information. (Added by Stats. 2018, Ch. 439, Sec. 1. (AB 2802) Effective January 1, 2019. Operative January 1, 2020, pursuant to Section 13555.) - 13553. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Insurance Payment Intercept Program [13550 - 13555] ( Article 8 added by Stats. 2018, Ch. 439, Sec. 1. )
An insurer may use a central reporting organization to identify and report claimants who owe past-due child support; otherwise, it must check before paying a claim.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Insurance Payment Intercept Program [13550 - 13555] ( Article 8 added by Stats. 2018, Ch. 439, Sec. 1. ) ## 13553. (a) An insurer may satisfy its obligation to identify and report a claimant who owes past-due child support through the use of a central reporting organization. If an insurer does not use a central reporting organization to automate the process, the insurer shall determine if the claimant owes past-due child support before paying a claim. (b) For claims involving periodic payments after the insurer has determined that benefits will be paid, the insurer shall only determine if the claimant owes past-due child support before the initial payment and either 12 months thereafter, or the insurer may provide a copy of the settlement to the Department of Child Support Services. (c) If a central reporting organization identifies a claimant who is also an obligor, the central reporting organization shall notify the Department of Child Support Services, and the Department of Child Support Services shall follow the requirements of subdivision (e) of Section 13550. (Added by Stats. 2018, Ch. 439, Sec. 1. (AB 2802) Effective January 1, 2019. Operative January 1, 2020, pursuant to Section 13555.) - 13554. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Insurance Payment Intercept Program [13550 - 13555] ( Article 8 added by Stats. 2018, Ch. 439, Sec. 1. )
This section defines “central reporting organization” as a third-party service that automates claims identifying or provides interactive lookups.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Insurance Payment Intercept Program [13550 - 13555] ( Article 8 added by Stats. 2018, Ch. 439, Sec. 1. ) ## 13554. For the purposes of this article, “central reporting organization” means a third-party service that automates the claims identifying process or provides interactive lookups. (Added by Stats. 2018, Ch. 439, Sec. 1. (AB 2802) Effective January 1, 2019. Operative January 1, 2020, pursuant to Section 13555.) - 13555. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Insurance Payment Intercept Program [13550 - 13555] ( Article 8 added by Stats. 2018, Ch. 439, Sec. 1. )
This article becomes operative on January 1, 2020.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Powers and Duties [12919 - 13555] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Insurance Payment Intercept Program [13550 - 13555] ( Article 8 added by Stats. 2018, Ch. 439, Sec. 1. ) ## 13555. This article shall become operative on January 1, 2020. (Added by Stats. 2018, Ch. 439, Sec. 1. (AB 2802) Effective January 1, 2019.) - 136. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1.5. Risk Retention [125 - 140] ( Chapter 1.5 added by Stats. 1990, Ch. 1521, Sec. 1. )
Powers authorized by this chapter may be exercised only if they are not preempted by the Product Liability Risk Retention Act of 1981, as amended.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1.5. Risk Retention [125 - 140] ( Chapter 1.5 added by Stats. 1990, Ch. 1521, Sec. 1. ) ## 136. The powers authorized by this chapter shall only be exercised to the extent these powers are not preempted by the Product Liability Risk Retention Act of 1981, as amended by the Risk Retention Amendments of 1986. (Added by Stats. 1990, Ch. 1521, Sec. 1.) - 13600. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Conciliation [13600 - 13601] ( Chapter 3 added by Stats. 1989, Ch. 1073, Sec. 3. )
This section lets a person who filed a complaint under Section 678.5 choose conciliation for a dispute about cancellation or nonrenewal, and it sets related duties for the department, insurer, complainant, and commissioner.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Conciliation [13600 - 13601] ( Chapter 3 added by Stats. 1989, Ch. 1073, Sec. 3. ) ## 13600. The department shall provide any person who files a complaint pursuant to Section 678.5, with the option of submitting any dispute involving cancellation or nonrenewal to conciliation pursuant to the following conciliation procedures: (a) (1) The complaint shall first be reviewed by the department. Each insurer shall designate a responsible staff member whom the department may contact to determine whether a complaint may be resolved through a conciliation process. (2) The complainant shall pay a filing fee of thirty-five dollars ($35), which shall be returned if the complainant prevails in whole or in part in conciliation. (b) The department staff shall attempt to resolve the dispute over the telephone. The insurer’s representative shall have the authority to bind any insurer to any agreement reached over the telephone. (c) The insurer shall notify the department of the representative’s identity in writing and immediately notify the department of any change in the designation. (d) If the department cannot resolve the dispute by conciliation, the complaint shall be referred to the commissioner, who may, if he or she determines that there are reasonable grounds for believing that a violation of Section 678.5 has occurred, hold a hearing to determine whether a violation has occurred. In the event of a finding that a violation has occurred, the commissioner may order reinstatement of the policy. (Added by Stats. 1989, Ch. 1073, Sec. 3.) - 13601. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Conciliation [13600 - 13601] ( Chapter 3 added by Stats. 1989, Ch. 1073, Sec. 3. )
An insured or other aggrieved party may use an available alternative remedy instead of conciliation, and may do so without first using this chapter. The department cannot proceed under this chapter or resolve a dispute while a judicial action initiated by an insured is pending.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Conciliation [13600 - 13601] ( Chapter 3 added by Stats. 1989, Ch. 1073, Sec. 3. ) ## 13601. Nothing in this chapter shall preclude an insured or other aggrieved party from pursuing any available alternative remedy in lieu of conciliation or from pursuing that alternative remedy without first proceeding under this chapter, but the department shall have no jurisdiction to proceed under this chapter or resolve any dispute under this chapter during the pendency of any judicial action thereon initiated by an insured. (Added by Stats. 1989, Ch. 1073, Sec. 3.) - 137. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1.5. Risk Retention [125 - 140] ( Chapter 1.5 added by Stats. 1990, Ch. 1521, Sec. 1. )
Certain people and businesses may not solicit, negotiate, or procure specified liability insurance unless they hold the required broker license, and licensed persons must give prospective insureds the required notices.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1.5. Risk Retention [125 - 140] ( Chapter 1.5 added by Stats. 1990, Ch. 1521, Sec. 1. ) ## 137. (a) No person, firm, association, or corporation shall act or aid in any manner in soliciting, negotiating, or procuring liability insurance in this state from a risk retention group unless that person, firm, association, or corporation is licensed as a casualty broker-agent in accordance with Chapter 5 (commencing with Section 1621) of Part 2 and is authorized to act as an insurance broker; except salaried employees or officers of a risk retention group, provided no part of the compensation of that person is on a commission basis or otherwise based on production of business. (b) No person, firm, association, or corporation shall act or aid in any manner in soliciting, negotiating, or procuring liability insurance from an insurer not authorized to do business in this state on behalf of a purchasing group located in this state unless that person, firm, association, or corporation is licensed as a surplus line broker in accordance with Chapter 6 (commencing with Section 1760) of Part 2. A nonresident person may be licensed as a surplus line broker for purposes of placing insurance on behalf of a purchasing group. (c) Any person, firm, association, or corporation licensed pursuant to Chapter 5 (commencing with Section 1621) of Part 2, on business placed with risk retention groups or written through a purchasing group, shall inform each prospective insured of the provisions of the notice required by subdivision (g) of Section 132 in the case of a risk retention group and subdivision (b) of Section 135 in the case of a purchasing group. (Amended by Stats. 2011, Ch. 411, Sec. 2. (AB 1416) Effective January 1, 2012.) - 1370. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Finances [1370 - 1375] ( Article 5 enacted by Stats. 1935, Ch. 145. )
An exchange must keep required assets in approved forms and follow limits and timing rules for real estate holdings.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Finances [1370 - 1375] ( Article 5 enacted by Stats. 1935, Ch. 145. ) ## 1370. Every exchange shall maintain its required assets in any one, or more, or all of the following forms: (a) In cash or deposits in solvent banks. (b) Invested in securities of the kind designated for the investment of assets of incorporated insurers having a capital stock by the laws of the state where the principal office is located. (c) Invested in real property acquired by or for it to secure the payment of loans heretofore contracted or for moneys heretofore due, or purchased at sales upon deeds of trust or upon judgments obtained for the loans or debts, or conveyed to it in satisfaction of debts heretofore contracted in the course of its dealings. The real property may be acquired, held, and conveyed on behalf of the exchange in trust by the attorney, but shall be sold and disposed of within five years after acquisition of title thereto unless the time for any such sale or disposal is extended by the commissioner in writing. (d) Excess fund investments may be made in real estate and in making improvements thereon for business or residential purposes as an investment for the production of income. “Business or residential purposes” does not include real estate primarily intended for use or valued as agricultural, horticultural, farm, ranch, or mineral property. Any such investment may be made only by admitted exchanges having admitted assets aggregating in value not less than twenty-five million dollars ($25,000,000). Real estate acquired and improvements made thereon shall not exceed an amount equal to 5 percent of the admitted assets of the exchange. Any investment in a single parcel of real estate including improvements thereon made under the authority of this subdivision shall not be made in an amount in excess of 1 percent of the admitted assets of the exchange. The percentage or dollar value of assets as provided in this subdivision shall be determined by the exchange’s last preceding annual statement of conditions and affairs made as of the December 31 last preceding and which has been filed with the commissioner pursuant to law. (e) In addition to the investments authorized by subdivisions (a) to (d), inclusive, every exchange may purchase, hold, or reconvey real estate for any of the following purposes: (1) The building, and the land upon which that building stands, owned by it and in which is located its home office or principal office in this state by virtue of the occupancy thereof, in whole or in part, by its attorney-in-fact. The exchange may make any type of arrangement which is fair and reasonable for the occupation of the building, in whole or in part, by its attorney. (2) Real estate requisite for its accommodation in the convenient transaction of its business. (f) Subject to the limitations established under subdivisions (c), (d), and (e), every exchange in its own name as in the case of an individual, may purchase, receive, own, hold, lease, mortgage, pledge, or encumber, by deed of trust or otherwise, manage, and sell real estate for the purposes and objects of the exchange. (Amended by Stats. 1985, Ch. 106, Sec. 94.) - 1370.2. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Finances [1370 - 1375] ( Article 5 enacted by Stats. 1935, Ch. 145. )
Most exchanges covered by this chapter must use the same minimum surplus standards that apply to capital stock insurers, starting October 1, 1961.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Finances [1370 - 1375] ( Article 5 enacted by Stats. 1935, Ch. 145. ) ## 1370.2. Except as in this article (commencing with Section 1370) otherwise provides, every exchange subject to this chapter (commencing with Section 1280) shall on and after October 1, 1961, be governed for all purposes as to required minimum surplus, (including that for admission, amendment of certificate of authority and solvency) by the same standards for minimum paid-in capital and surplus applicable to capital stock insurers. As used in this chapter surplus of an exchange is the amount by which its assets exceed a sum sufficient to discharge all its liabilities. When the standard prescribed for capital stock insurers consists of an amount of minimum paid-in capital the minimum surplus required of the exchange shall be such amount, and when the standard prescribed for capital stock insurers consists of an amount of minimum paid-in capital and an amount of surplus the minimum surplus required of the exchange shall be the aggregate of such amounts. This section shall not affect the provisions of Section 1401. (Added by Stats. 1961, Ch. 454.) - 1370.4. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Finances [1370 - 1375] ( Article 5 enacted by Stats. 1935, Ch. 145. )
Older exchanges are exempt from Section 1370.2 only until they replace their attorney in fact, and they must still meet the chapter’s surplus requirements. The exemption is phased out over time with specified minimum surplus percentages.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Finances [1370 - 1375] ( Article 5 enacted by Stats. 1935, Ch. 145. ) ## 1370.4. An exchange admitted prior to October 1, 1961, shall be exempt from the provisions of Section 1370.2 until it replaces its attorney in fact, except when the replacement is in strict compliance with a contract between the exchange and its current attorney in fact entered into prior to October 1, 1961, or the effective legal control of its attorney in fact passes, by means other than by way of judicial process (including but not limited to: probate proceedings, bankruptcy proceedings or an action by a dissident minority interest to force a sale or partition of the attorney in fact) to persons none of whom had a proprietary interest therein on October 1, 1961, subject to the further provisions of this section and to the provisions of Section 1370.8. While exempted from the provisions of Section 1370.2 as modified by Section 1370.8, such an exchange shall be subject to and comply with the surplus requirements provided in this chapter (commencing with Section 1280) immediately prior to October 1, 1961. The exemption from Section 1370.2 provided by this section shall be progressively abolished so that on and after the dates specified in the left-hand column of the following table every exchange shall be required to maintain at least a minimum surplus equal to that percentage of the minimum paid-in capital required by this code of capital stock insurers transacting the same classes of insurance which is set forth in the right-hand column of the following table. January 1, 1967 ........................ 20% January 1, 1970 ........................ 40% January 1, 1973 ........................ 70% January 1, 1976 ........................ 100% In a case where the provisions of Section 1370.8 become applicable any additional minimum surplus required by that section shall be in addition to any required under the provisions of this paragraph. (Amended by Stats. 1965, Ch. 181.) - 1370.8. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Finances [1370 - 1375] ( Article 5 enacted by Stats. 1935, Ch. 145. )
Exchanges exempted from Section 1370.2 still must comply with this section, and after October 1, 1961, an amended certificate adding insurance classes may be issued only if the exchange has enough surplus.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Finances [1370 - 1375] ( Article 5 enacted by Stats. 1935, Ch. 145. ) ## 1370.8. Any exchange exempted at any time from the provisions of Section 1370. 2 shall irrespective of such exemption be subject to the provisions of this section. No amended certificate of authority adding classes of insurance shall be issued to the attorney in fact of any such exchange on or after October 1, 1961, unless at the time of the amendment the exchange has a surplus equal in the aggregate to the sum of the surplus amount it was required to maintain by the provisions of this chapter (commencing with Section 1280) as the same were in effect immediately prior to October 1, 1961, plus the aggregate amount of additional minimum amount of capital and surplus which, at the time of such amendment, would be required of a capital stock insurer by the provisions of this code in order to add the same classes of insurance to its certificate of authority if it were authorized at the time of the amendment to transact the same classes of insurance as those which the attorney in fact of such reciprocal is authorized to transact. (Added by Stats. 1961, Ch. 454.) - 1371. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Finances [1370 - 1375] ( Article 5 enacted by Stats. 1935, Ch. 145. )
An exchange that does liability or workers’ compensation insurance must always keep enough assets to pay all liabilities and maintain a $100,000 surplus over liabilities.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Finances [1370 - 1375] ( Article 5 enacted by Stats. 1935, Ch. 145. ) ## 1371. If an exchange does either liability or workers’ compensation insurance, it shall at all times maintain assets in a sum sufficient to discharge all liabilities and to provide a surplus over all liabilities of one hundred thousand dollars ($100,000). An exchange subject to the provisions of this section is also subject to the provisions of Sections 1370.2, 1370.4, and 1370.8. (Amended by Stats. 2018, Ch. 231, Sec. 7. (AB 2045) Effective January 1, 2019.) - 1372. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Finances [1370 - 1375] ( Article 5 enacted by Stats. 1935, Ch. 145. )
Every other exchange must always keep enough assets to pay all liabilities and maintain a $50,000 surplus.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Finances [1370 - 1375] ( Article 5 enacted by Stats. 1935, Ch. 145. ) ## 1372. Every other exchange shall maintain at all times assets in a sum sufficient to discharge all liabilities and to provide a surplus over all liabilities of fifty thousand dollars ($50,000). An exchange subject to the provisions of this section is also subject to the provisions of Sections 1370.2, 1370.4, and 1370.8. (Amended by Stats. 1961, Ch. 454.) - 1373.1. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Finances [1370 - 1375] ( Article 5 enacted by Stats. 1935, Ch. 145. )
A non-renewal certificate of authority may not be issued to the attorney for the first 3 years after the exchange starts business or is first organized, unless the exchange maintains assets meeting the stated liability and surplus test.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Finances [1370 - 1375] ( Article 5 enacted by Stats. 1935, Ch. 145. ) ## 1373.1. No certificate of authority, other than a renewal certificate of authority, shall be issued to the attorney within three years from and after the time when the exchange commences business as an insurer nor within three years from and after the time it is first organized unless assets equal to the sum of its liabilities and the minimum surplus required by this chapter are maintained in cash or one or more of the following: (a) Securities specified in Sections 1170 to 1175 inclusive; (b) Bonds specified in Section 1176, if such bonds are legal for investment of savings banks in this State; (c) Such securities specified in Sections 1178 to 1202, inclusive, as are legal for investment of savings banks in this State; (d) Premiums in course of collection, or agents’ balances representing premiums, on policies effected not more than 90 days prior to the date on which such premiums or balances are valued for the purposes of this section, and earned service fees receivable, not over 90 days due, and evidences of debt representing such assets; (e) Interest accrued and dividends declared, receivable on any of the assets specified in subsections (a) to (d), inclusive, no part of which interest or dividends has been due in excess of one year; (f) Amount of reinsurance recoverable from admitted insurers. (Added by Stats. 1951, Ch. 544.) - 1373.2. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Finances [1370 - 1375] ( Article 5 enacted by Stats. 1935, Ch. 145. )
Certain newly operating exchanges must keep their assets in the specified form for the rest of the first three years, with an exception for excess assets.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Finances [1370 - 1375] ( Article 5 enacted by Stats. 1935, Ch. 145. ) ## 1373.2. (a) Except as provided in subsection (b) hereof, an exchange, the attorney for which holds a certificate of authority, which has been in business as an insurer less than three years from and after the time when it commenced business as an insurer shall maintain its assets during the balance of such three-year period in the type of assets specified in Section 1373.1, excepting such of its assets as are in excess of the sum of its liabilities and the surplus required for issuance of a certificate of authority, other than a renewal certificate of authority. Upon its failure so to do the commissioner may revoke the certificate of authority. The proceedings shall be conducted in accordance with Chapter 5 of Part 1 of Division 3 of Title 2 of the Government Code, and the commissioner shall have all the powers granted therein. (b) This section shall not apply to an exchange, the attorney for which holds a certificate of authority on the effective date hereof, until January 1, 1954. (Added by Stats. 1951, Ch. 544.) - 1374. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Finances [1370 - 1375] ( Article 5 enacted by Stats. 1935, Ch. 145. )
When estimating an exchange’s financial condition, the commissioner must follow specific rules about reserves, liabilities, assets, and subscriber deposits.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Finances [1370 - 1375] ( Article 5 enacted by Stats. 1935, Ch. 145. ) ## 1374. In estimating the financial condition of any exchange the commissioner shall observe the following rules: (a) He or she shall charge as liabilities the same reserves as are required of incorporated insurers issuing nonassessable policies on a reserve basis. (b) Surplus deposits of subscribers shall not be charged as a liability. (c) All premium deposits and surplus deposits of subscribers due and unpaid for a period not exceeding 90 days shall be allowed as admitted assets, as in the case of incorporated insurers issuing nonassessable policies on a reserve basis. (d) An assessment levied as provided in this chapter, and not collected shall in no event be allowed as an asset. (e) The computation of reserves shall be based upon premium deposits without any deduction for the compensation of the attorney. (Amended by Stats. 1984, Ch. 564, Sec. 2.) - 1374.1. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Finances [1370 - 1375] ( Article 5 enacted by Stats. 1935, Ch. 145. )
Subscribers can withdraw surplus deposits only after giving 60 days’ written notice and only if the withdrawal conditions are met.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Finances [1370 - 1375] ( Article 5 enacted by Stats. 1935, Ch. 145. ) ## 1374.1. (a) “Surplus deposits of subscribers,” as used in this chapter, means amounts, over and above any premium charges, which are contributed by subscribers and which are used for the purpose of funding the surplus of a reciprocal or interinsurance exchange. No subscriber shall have a secured or preferred claim against any of the assets of the reciprocal or interinsurance exchange arising out of surplus deposits. All assets, including the surplus deposits, shall be held by the reciprocal or interinsurance exchange and made available for payment of claims of policyholders and creditors of the reciprocal or interinsurance exchange in preference to any claim for withdrawal by a subscriber. A subscriber may, upon withdrawal from membership and cancellation of all such insurance contracts held by the subscriber with the insurer, withdraw the amount of the subscriber’s surplus deposits, less such surrender charges as may be deducted pursuant to the subscriber’s or insured’s agreement, but only if the subscriber has given written notice to the attorney-in-fact at least 60 days in advance of the withdrawal. (b) Withdrawal of surplus deposits of subscribers shall not be permitted if, as a result of the withdrawal, the policyholder’s surplus of the exchange would be less than the capital and surplus required by Sections 700.01, 700.02, and 700. 025. (c) Withdrawal of surplus deposits of subcribers shall not be permitted after an order of conservation or liquidation of, or the appointment of a conservator or liquidator for, any such reciprocal or interinsurance exchange. (Added by Stats. 1984, Ch. 564, Sec. 3.) - 1375. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Finances [1370 - 1375] ( Article 5 enacted by Stats. 1935, Ch. 145. )
If subscribers are grouped so one group’s funds are insulated from another’s losses or expenses, each independent group must keep the reserves and surplus needed for a separate exchange and must follow section 1322(f) and (g) on the number and amount of risks assumed.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Reciprocal Insurers [1280 - 1560.19] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Finances [1370 - 1375] ( Article 5 enacted by Stats. 1935, Ch. 145. ) ## 1375. Where the subscribers are grouped by industries or otherwise under any ruling or agreement which exempts the funds of one group from liability in whole or in part for the payment of losses or expenses chargeable against another group, each such independent group shall maintain the reserves and surplus required for a separate exchange and the requirements of subdivisions (f) and (g) of section 1322 relative to the number and amount of risks to be assumed must be observed as to each group. (Enacted by Stats. 1935, Ch. 145.) - 138. Verify source ↗
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1.5. Risk Retention [125 - 140] ( Chapter 1.5 added by Stats. 1990, Ch. 1521, Sec. 1. )
Agents or brokers are exempt from civil liability when they place liability insurance for a qualifying risk retention group, even if that group becomes insolvent.
## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1.5. Risk Retention [125 - 140] ( Chapter 1.5 added by Stats. 1990, Ch. 1521, Sec. 1. ) ## 138. There shall be no civil liability on the part of any agent or broker who places liability insurance coverage on behalf of any risk retention group which is incorporated and licensed in this state in the event of an insolvency by the risk retention group. (Added by Stats. 1990, Ch. 1521, Sec. 1.) - 13800. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Holocaust Era Insurance Registry [13800 - 13807] ( Chapter 4 added by Stats. 1999, Ch. 827, Sec. 2. )
This chapter is named the Holocaust Victim Insurance Relief Act of 1999 and may be cited by that name.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Holocaust Era Insurance Registry [13800 - 13807] ( Chapter 4 added by Stats. 1999, Ch. 827, Sec. 2. ) ## 13800. This chapter shall be known and may be cited as the Holocaust Victim Insurance Relief Act of 1999. (Added by Stats. 1999, Ch. 827, Sec. 2. Effective October 10, 1999.) - 13801. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Holocaust Era Insurance Registry [13800 - 13807] ( Chapter 4 added by Stats. 1999, Ch. 827, Sec. 2. )
The Legislature states findings about Holocaust-era insurance claims and the need for disclosure and resolution.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Holocaust Era Insurance Registry [13800 - 13807] ( Chapter 4 added by Stats. 1999, Ch. 827, Sec. 2. ) ## 13801. The Legislature finds and declares the following: (a) During World War II, untold millions of lives and property were destroyed. (b) In addition to the many atrocities that befell the victims of the Nazi regime, insurance claims that rightfully should have been paid out to the victims and their families, in many cases, were not. (c) In many instances, insurance company records are the only proof of insurance policies held. In some cases, recollection of those policies’ very existence may have perished along with the Holocaust victims. (d) At least 5,600 documented Holocaust survivors are living in California today. Many of these survivors and their descendents have been fighting for over 50 years to persuade insurance companies to settle unpaid or wrongfully paid claims. Survivors are asking that insurance companies come forth with any information they possess that could show proof of insurance policies held by Holocaust victims and survivors, in order to ensure that closure on this issue is swiftly brought to pass. (e) Insurance companies doing business in the State of California have a responsibility to ensure that any involvement they or their related companies may have had with insurance policies of Holocaust victims are disclosed to the state and to ensure the rapid resolution of these questions, eliminating the further victimization of these policyholders and their families. (f) The international Jewish community is in active negotiations with responsible insurance companies through the International Commission on Holocaust Era Insurance Claims to resolve all outstanding insurance claims issues. This chapter is necessary to protect the claims and interests of California residents, as well as to encourage the development of a resolution to these issues through the international process or through direct action by the State of California, as necessary. (Added by Stats. 1999, Ch. 827, Sec. 2. Effective October 10, 1999.) - 13802. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Holocaust Era Insurance Registry [13800 - 13807] ( Chapter 4 added by Stats. 1999, Ch. 827, Sec. 2. )
This section defines key terms for the Holocaust Era Insurance Registry chapter, including “Holocaust victim,” “related company,” and “proceeds.”
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Holocaust Era Insurance Registry [13800 - 13807] ( Chapter 4 added by Stats. 1999, Ch. 827, Sec. 2. ) ## 13802. For purposes of this chapter, the following definitions shall apply: (a) “Holocaust victim” means any person who was persecuted during the period of 1929 to 1945, inclusive, by Nazi Germany, its allies, or sympathizers. (b) “Related company” means any parent, subsidiary, reinsurer, successor in interest, managing general agent, or affiliate company of the insurer. (c) “Proceeds” means the face value or other payout value of insurance policies and annuities plus reasonable interest to date of payment without diminution for wartime or immediate postwar currency devaluation. (Added by Stats. 1999, Ch. 827, Sec. 2. Effective October 10, 1999.) - 13803. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Holocaust Era Insurance Registry [13800 - 13807] ( Chapter 4 added by Stats. 1999, Ch. 827, Sec. 2. )
The commissioner must establish and maintain a central insurance registry for Holocaust victims, and the Attorney General must set up mechanisms for public access to it, working with the department.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Holocaust Era Insurance Registry [13800 - 13807] ( Chapter 4 added by Stats. 1999, Ch. 827, Sec. 2. ) ## 13803. The commissioner shall establish and maintain within the department a central registry containing records and information relating to insurance policies, as described in Section 13804, of Holocaust victims, living and deceased. The registry shall be known as the Holocaust Era Insurance Registry. The Attorney General, in coordination with the department, shall establish appropriate mechanisms to ensure public access to the registry. (Added by Stats. 1999, Ch. 827, Sec. 2. Effective October 10, 1999.) - 13804. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Holocaust Era Insurance Registry [13800 - 13807] ( Chapter 4 added by Stats. 1999, Ch. 827, Sec. 2. )
Certain insurers must file Holocaust-era policy information with the commissioner and certify what happened to policy proceeds; knowingly false certification is a misdemeanor.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Holocaust Era Insurance Registry [13800 - 13807] ( Chapter 4 added by Stats. 1999, Ch. 827, Sec. 2. ) ## 13804. (a) Any insurer currently doing business in the state that sold life, property, liability, health, annuities, dowry, educational, or casualty insurance policies, directly or through a related company, to persons in Europe, which were in effect between 1920 and 1945, whether the sale occurred before or after the insurer and the related company became related, shall, within 180 days following enactment of this act, file or cause to be filed the following information with the commissioner to be entered into the registry: (1) The number of those insurance policies. (2) The holder, beneficiary, and current status of those policies. (3) The city of origin, domicile, or address for each policyholder listed in the policies. (b) In addition, each insurer subject to subdivision (a) shall certify to any of the following: (1) That the proceeds of the policies described in subdivision (a) have been paid to the designated beneficiaries or their heirs where that person or persons, after diligent search, could be located and identified. (2) That the proceeds of the policies where the beneficiaries or heirs could not, after diligent search, be located or identified, have been distributed to Holocaust survivors or to qualified charitable nonprofit organizations for the purpose of assisting Holocaust survivors. (3) That a court of law has certified in a legal proceeding resolving the rights of unpaid policyholders, their heirs, and beneficiaries, a plan for the distribution of the proceeds. (4) That the proceeds have not been distributed and the amount of those proceeds. An insurer who certifies as true any material matter pursuant to this subdivision, which the insurer knows to be false, is guilty of a misdemeanor. (c) An insurer currently doing business in the state that did not sell any insurance policies in Europe prior to 1945, shall not be subject to this section if a related company, whether or not authorized and currently doing business in the state, has made a filing under this section. (Added by Stats. 1999, Ch. 827, Sec. 2. Effective October 10, 1999.) - 13805. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Holocaust Era Insurance Registry [13800 - 13807] ( Chapter 4 added by Stats. 1999, Ch. 827, Sec. 2. )
An insurer that knowingly files false information about a policy required by this chapter can be liable for a civil penalty of up to $5,000.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Holocaust Era Insurance Registry [13800 - 13807] ( Chapter 4 added by Stats. 1999, Ch. 827, Sec. 2. ) ## 13805. Any insurer that knowingly files information about a policy required by this chapter that is false shall, with respect to that policy, be liable for a civil penalty not to exceed five thousand dollars ($5,000), which penalty is hereby appropriated to the department to be used by it to aid in the resolution of Holocaust insurance claims. (Added by Stats. 1999, Ch. 827, Sec. 2. Effective October 10, 1999.) - 13806. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Holocaust Era Insurance Registry [13800 - 13807] ( Chapter 4 added by Stats. 1999, Ch. 827, Sec. 2. )
The commissioner must suspend an insurer’s certificate of authority if the insurer does not comply with this chapter by the 210th day after the section takes effect, and keep it suspended until compliance.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Holocaust Era Insurance Registry [13800 - 13807] ( Chapter 4 added by Stats. 1999, Ch. 827, Sec. 2. ) ## 13806. The commissioner shall suspend the certificate of authority to conduct insurance business in the state of any insurer that fails to comply with the requirements of this chapter by the 210th day after this section becomes effective, until the time that the insurer complies with this chapter. (Added by Stats. 1999, Ch. 827, Sec. 2. Effective October 10, 1999.) - 13807. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Holocaust Era Insurance Registry [13800 - 13807] ( Chapter 4 added by Stats. 1999, Ch. 827, Sec. 2. )
The commissioner must adopt rules to implement this chapter within 90 days of the chapter’s effective date.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Holocaust Era Insurance Registry [13800 - 13807] ( Chapter 4 added by Stats. 1999, Ch. 827, Sec. 2. ) ## 13807. The commissioner shall adopt rules to implement this chapter within 90 days of its effective date. The rules shall be adopted as emergency regulations in accordance with Chapter 3.5 (commencing with Section 11340) of the Government Code, and for the purposes of that chapter, including Section 11349.6 of the Government Code, the adoption of the rules shall be considered by the Office of Administrative Law to be necessary for the immediate preservation of the public peace, health and safety, and general welfare. (Added by Stats. 1999, Ch. 827, Sec. 2. Effective October 10, 1999.) - 13810. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Slavery Era Insurance Policies [13810 - 13813] ( Chapter 5 added by Stats. 2000, Ch. 934, Sec. 2. )
The commissioner must request and obtain information from licensed insurers in this state about records of slaveholder insurance policies from the slavery era.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Slavery Era Insurance Policies [13810 - 13813] ( Chapter 5 added by Stats. 2000, Ch. 934, Sec. 2. ) ## 13810. The commissioner shall request and obtain information from insurers licensed and doing business in this state regarding any records of slaveholder insurance policies issued by any predecessor corporation during the slavery era. (Added by Stats. 2000, Ch. 934, Sec. 2. Effective January 1, 2001.) - 13811. Verify source ↗
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Slavery Era Insurance Policies [13810 - 13813] ( Chapter 5 added by Stats. 2000, Ch. 934, Sec. 2. )
The commissioner must identify certain slaveholders or slaves in specified insurance records and make that information available to the public and the Legislature.
## Insurance Code - INS ## DIVISION 3. THE INSURANCE COMMISSIONER [12900 - 13855] ( Division 3 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Slavery Era Insurance Policies [13810 - 13813] ( Chapter 5 added by Stats. 2000, Ch. 934, Sec. 2. ) ## 13811. The commissioner shall obtain the names of any slaveholders or slaves described in those insurance records, and shall make the information available to the public and the Legislature. (Added by Stats. 2000, Ch. 934, Sec. 2. Effective January 1, 2001.)
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