Insurance Code — Part 19 | INS — United States — California law | Esheria

Insurance Code

Part 19 of 23 · provisions 3,601–3,800

This section says the act is known as the Insurance Code.

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About this statute

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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Provisions of Insurance Code

Showing 200 of 4,461

  1. 382.5.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Definition and Scope [380 - 396] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    Binders issued under this section are treated as insurance policies for proof of coverage, but only if they meet the section’s requirements.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Definition and Scope [380 - 396] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 382.5. A binder which is issued in accordance with this section shall be deemed an insurance policy for the purpose of proving that the insured has the insurance coverage specified in the binder. (a) As used in this section, “binder” means a writing (1) which includes the name and address of the insured and any additional named insureds, mortgagees, or lienholders, a description of the property insured, if applicable, a description of the nature and amount of coverage and any special exclusions not contained in a standard policy, the identity of the insurer and the agent executing the binder, the effective date of coverage, the binder number or the policy number where applicable to a policy extension, and (2) which temporarily obligates the insurer to provide that insurance coverage pending issuance of the insurance policy. For purposes of this section, “binder” does not include, and this section does not apply to, any writing that conditionally or unconditionally obligates an insurer to provide (1) life or disability insurance or (2) insurance in the amount of one million dollars ($1,000,000) or more. (b) Except as superseded by the clear and express terms of the binder, a binder shall be deemed to include all of the usual terms of the policy as to which the binder was given, together with applicable endorsements as are designated in the binder. (c) Except as otherwise provided in this subdivision, a binder shall be valid for the period specified therein not exceeding 90 days from the date of execution of the binder or, if not specified, for that period of 90 days. No binder shall remain valid on or after the date the insurance policy is issued with respect to which the binder was given. Expiration of coverage under a binder shall not be considered a cancellation or nonrenewal of a policy of insurance within the meaning of any statute limiting the right to cancel or nonrenew a policy of insurance. (d) If any party to a contract or other agreement refuses without reasonable cause to accept a binder as proof of insurance when that proof is required by the contract or agreement, that party shall be deemed to have breached the contract and the other party thereto, shall be entitled to appropriate injunctive relief and may recover damages for the breach and reasonable attorney’s fees and costs. As used in this subdivision, “reasonable cause” includes, but shall not be limited to, any of the following: (1) Inadequate coverage or inappropriate terms of coverage with respect to the interest of the vendor, lender, lessor, or other person providing a service to the insured. (2) Failure of the insurer to meet the financial standards “lawfully” established by the lender for all insurers for the type of loan for which the insurance is obtained. (3) Inability of the lender to determine if the insurer is licensed as an admitted insurer by the commissioner to transact the line of insurance for which the binder is issued. (4) Failure of the insurance agent to provide the lender with written evidence of the agent’s authority to bind insurance coverage on behalf of the insurer under the binder. (5) Failure of the binder to comply with this section. (e) For purposes of all insurance policies providing collateral insurance coverage, binders issued in accordance with this section shall be deemed an insurance policy. (f) The commissioner may suspend or revoke the license of any agent issuing or purporting to issue any binder of a type for which the agent lacks authority from the insurer named in the binder. (Added by Stats. 1989, Ch. 971, Sec. 1.)
  2. 383.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Definition and Scope [380 - 396] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    This section makes it a misdemeanor for an insurer or its agent to issue a policy that breaks section 381(f), for an insurance agent or broker to help arrange insurance for such a policy, or for an insurer to violate section 382.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Definition and Scope [380 - 396] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 383. It is a misdemeanor: (a) For any insurer, or any agent of any insurer, to issue a policy in violation of the requirements of subdivision (f) of section 381. (b) For any insurance agent or broker to assist in arranging for the insurance where the policy violates such requirements. (c) For any insurer to violate the provisions of section 382. (Enacted by Stats. 1935, Ch. 145.)
  3. 383.5.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Definition and Scope [380 - 396] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    Motor vehicle insurance documents must conform to Section 381, show premium segregation, and be delivered to owners, with a limited waiver option for security-only owners.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Definition and Scope [380 - 396] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 383.5. “Document,” as used in this section, means a policy or a certificate evidencing insurance under a master policy. The policy or certificate shall conform to Section 381 and shall segregate the premiums charged for each risk insured against. The certificate, in lieu of specifying the risks insured against, may designate them by name or by description. “Document” also includes the applicable policy form and a subsequently issued declarations page conforming to Section 381 or an endorsement. “Owner,” as used in this section, means any person who is named as an insured in the contract of insurance or document, or in a loss payable clause therein, and, whether or not he or she is named therein, the vendee, pledgor, or chattel mortgagor of a motor vehicle where insurance contracts subject to this section are procured with respect to the motor vehicle by or on behalf of either party to the purchase, pledge, or mortgage. Every contract of insurance against hazards incident to ownership, maintenance, operation, and use of motor vehicles shall be embodied in a document. The original or true copy of the document shall be delivered to each owner. Where it is executed by an insurer, the insurer shall deliver the original or a true copy to either of the following: (a) The agent or broker who negotiated the insurance, for delivery to each owner of the motor vehicle. (b) Each owner of the motor vehicle. Any owner whose interest in the insured vehicle is for security purposes only may by written notice to the insurer waive delivery of the policy and in lieu thereof there shall be delivered to the owner a written certificate of insurance setting forth in brief form the matters specified in Section 381. The agent or broker receiving the original or copy shall deliver one to each owner. Where coverage subject to this section is evidenced by a document executed by an agent licensed under Chapter 5 (commencing with Section 1621) of Part 2, and not by an insurer, the agent and not the insurer is responsible for delivery of the original or a true copy to each owner. The licenses of any agent or broker found by the commissioner after hearing to have violated this section may be suspended or revoked in accordance with the procedure provided in Article 13 (commencing with Section 1737) of Chapter 5 of Part 2, or the certificate of authority of any insurer found by the commissioner after hearing to have violated this section may be suspended or revoked in accordance with the procedure provided in Section 704. The purpose of this section is to prevent fraud or mistake in connection with the transaction of insurance covering motor vehicles and in furtherance of that purpose the commissioner may make reasonable rules and regulations therefor. The rules and regulations shall be adopted, amended, or repealed 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. (Amended by Stats. 1985, Ch. 106, Sec. 91.)
  4. 383.6.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Definition and Scope [380 - 396] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    This section defines “motor vehicle” and “motor vehicles” for Section 383.5 to include trailers, house trailers, mobilehomes, campers, motorcycles, motorbikes, and motor scooters, with an exception for powered bicycles not made for a motor.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Definition and Scope [380 - 396] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 383.6. The phrase “motor vehicle” or “motor vehicles” as used in Section 383.5 includes, but is not limited to: (a) Trailers, house trailers, mobilehomes, campers and all other wheeled vehicles or nonwheeled structures so made as to be capable of being moved as a compatible portion thereof, or trailed behind, any motor vehicle as that term is defined in the Vehicle Code, whether in immobile position or not. (b) Motorcycles, motorbikes and motor scooters, except powered bicycles not manufactured for inclusion of a motor. All present or future rules or regulations promulgated by the commissioner pursuant to Section 383.5 shall be applicable to motor vehicles as defined in this section. (Added by Stats. 1967, Ch. 452.)
  5. 384.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Definition and Scope [380 - 396] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    Certificates of insurance used instead of a policy copy must include a statement that they are not insurance policies and do not change 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Definition and Scope [380 - 396] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 384. (a) A certificate of insurance or verification of insurance provided as evidence of insurance in lieu of an actual copy of the insurance policy shall contain the following statements or words to the effect of: This certificate or verification of insurance is not an insurance policy and does not amend, extend or alter the coverage afforded by the policies listed herein. Notwithstanding any requirement, term, or condition of any contract or other document with respect to which this certificate or verification of insurance may be issued or may pertain, the insurance afforded by the policies described herein is subject to all the terms, exclusions and conditions of the policies. (b) This section is not applicable to a surplus line broker certificate as defined in Section 48. (Amended by Stats. 2000, Ch. 135, Sec. 107. Effective January 1, 2001.)
  6. 386.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Definition and Scope [380 - 396] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    Policies issued by incorporated insurers must be subscribed by specified officers and countersigned by the corporation’s secretary.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Definition and Scope [380 - 396] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 386. All policies issued by incorporated insurers shall be subscribed by the president or vice president, or chairman, or chief executive officer, or, in case of the death, absence, or disability of those officers, by any two of the directors, and countersigned by the secretary of the corporation. All such policies are as binding and obligatory upon the corporation as if executed over the corporate seal. (Amended by Stats. 1990, Ch. 539, Sec. 1.)
  7. 387.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Definition and Scope [380 - 396] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    If a policy names the person to be insured, it applies only to that person’s own interest.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Definition and Scope [380 - 396] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 387. When the name of the person intended to be insured is specified in a policy, it can be applied only to his own interest. (Enacted by Stats. 1935, Ch. 145.)
  8. 388.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Definition and Scope [380 - 396] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    A policy may identify the insured as an agent or trustee, or use other general words, when the insurance contract is executed with an agent or trustee as the insured and the principal or beneficiary is the real party in interest.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Definition and Scope [380 - 396] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 388. When an insurance contract is executed with an agent or trustee as the insured, the fact that his principal or beneficiary is the real party in interest may be indicated by describing the insured as agent or trustee, or by other general words in the policy. (Enacted by Stats. 1935, Ch. 145.)
  9. 389.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Definition and Scope [380 - 396] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    An insurance policy taken out by one partner or part-owner applies to the other partners or part-owners only if the policy terms fit their joint or common interest.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Definition and Scope [380 - 396] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 389. To render an insurance effected by one partner or part-owner applicable to the interest of his copartners, or of other part-owners, it is necessary that the terms of the policy should be such as are applicable to the joint or common interest. (Enacted by Stats. 1935, Ch. 145.)
  10. 39.

    ## Insurance Code - INS ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1935, Ch. 145. )

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    If part of the code is held invalid, the rest of the code still applies.

    ## Insurance Code - INS ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1935, Ch. 145. ) ## 39. If any provision of this code, or the application thereof to any person or circumstance, is held invalid, the remainder of the code, or the application of such provision to other persons or circumstances, shall not be affected thereby. (Enacted by Stats. 1935, Ch. 145.)
  11. 390.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Definition and Scope [380 - 396] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    If a policy describes the insured so broadly that it could fit anyone or a whole class of people, only a person who can show the policy was meant to include them may claim its benefit.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Definition and Scope [380 - 396] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 390. When the description of the insured in a policy is so general that it may comprehend any person or any class of persons, only he who can show that it was intended to include him can claim the benefit of the policy. (Enacted by Stats. 1935, Ch. 145.)
  12. 391.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Definition and Scope [380 - 396] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    A policy may be written so its benefits go to whoever owns the insured interest while the risk is ongoing.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Definition and Scope [380 - 396] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 391. A policy may be so framed that it will inure to the benefit of whomsoever, during the continuance of the risk, becomes the owner of the interest insured. (Enacted by Stats. 1935, Ch. 145.)
  13. 392.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Definition and Scope [380 - 396] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    An insurance policy exception must be printed in at least eight-point blackface type when the policy covers property while it is under another party’s control for storage or transfer.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Definition and Scope [380 - 396] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 392. Any exception from the risk generally covered by a policy of insurance which insures property for the period of time when such property is under the dominion and control of a party other than the insured for the purpose of storage or for the purpose of transferring such property to another location shall be printed in at least eight-point blackface type. (Added by Stats. 1968, Ch. 135.)
  14. 394.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Definition and Scope [380 - 396] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    The commissioner may approve non-English insurance policies and related materials if English copies, official-English status, and bilingual disclosure statements are provided. Insurers that knowingly misrepresent non-English information are subject to Article 6.5.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Definition and Scope [380 - 396] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 394. (a) The commissioner may approve insurance policies and associated materials in languages other than English if the following conditions are met: (1) The policyholder is given a copy of the same material in English. (2) The English version is the official version. (3) A policyholder document in a language other than English shall contain a disclosure statement in both that language and in English that states that the English version is the official version and the foreign language version is for informational purposes only. (b) An insurer that knowingly misrepresents information provided in a language other than English shall be subject to Article 6.5 (commencing with Section 790) of Chapter 1 of Part 2. (Added by Stats. 2002, Ch. 358, Sec. 1. Effective January 1, 2003.)
  15. 395.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Definition and Scope [380 - 396] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    After a covered loss, an insurer must give the insured a free copy of the current policy or certificate within 30 calendar days of request. The commissioner may extend that period. An insured without a covered loss can request one free copy annually, and the copy should include the declarations page when applicable.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Definition and Scope [380 - 396] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 395. After a covered loss, an insurer shall provide, free of charge, a complete copy of the insured’s current insurance policy or certificate within 30 calendar days of receipt of a request from the insured. The period for providing the insurance policy or certificate may be extended by the commissioner. An insured who does not experience a covered loss shall, upon request, be entitled to one free copy of his or her current insurance policy or certificate annually. The insurance policy or certificate provided to the insured shall include, where applicable, the policy declarations page. This section shall not apply to commercial policies issued pursuant to Sections 675.5 and 676.6, and policies of workers’ compensation insurance, as defined in Section 109. (Amended by Stats. 2014, Ch. 71, Sec. 96. (SB 1304) Effective January 1, 2015.)
  16. 396.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Definition and Scope [380 - 396] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    Insurers must give policyholders a way to name one extra person to receive lapse or cancellation notices, and must periodically remind them of that right.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Definition and Scope [380 - 396] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 396. (a) An insurer shall do either of the following: (1) Maintain a verifiable process that allows a policyholder to designate in writing or by electronic transmission pursuant to Section 38.6 one additional person to receive notice of lapse, termination, expiration, nonrenewal, or cancellation of a policy for nonpayment of premium. The insurer shall notify the policyholder in writing or by electronic transmission pursuant to Section 38.6 of this right at the time of the application or within 30 days after the inception date of an individual policy described in subdivision (f), and at least every two years thereafter. The notification described in this subdivision shall instruct the policyholder how to request the designation and how to replace or delete a designee. If a policyholder initiates contact with the insurer after the insurer has provided notice and the insurer complies with the policyholder’s request to establish or change the additional person to receive the notice described in this section, the insurer shall not be required to maintain additional verification. (2) Comply with subdivision (b). (b) An insurer that adopts the following procedure shall be deemed to have complied with subdivision (a). (1) Unless an applicant for insurance has been provided notice of the right set forth in this section prior to inception of the policy, the insurer shall provide the policyholder, within 30 days after the inception date of an individual policy described in subdivision (f), with notice of the right to designate one person, in addition to the policyholder, to receive notice of lapse, termination, expiration, nonrenewal, or cancellation of a policy for nonpayment of premium. The insurer shall provide each applicant or policyholder with notice in writing or by electronic transmission pursuant to Section 38.6 of the opportunity to make the designation. That notice shall instruct the applicant or policyholder on how the applicant or policyholder is to submit the name and address of one person, in addition to the applicant or policyholder, who is to receive notice of lapse, termination, expiration, nonrenewal, or cancellation of the policy for nonpayment of premium. (2) If after having been provided notice from the insurer of the right to designate an individual to receive notice of lapse, termination, expiration, nonrenewal, or cancellation for nonpayment of premium, the applicant or policyholder fails to designate an individual within 30 days, the applicant or policyholder shall be conclusively presumed to have declined the opportunity to exercise their right at that time. (3) Notwithstanding subparagraph (C) of paragraph (2) of subdivision (a) of Section 791.13 or any other law, the insurer shall retain and utilize as necessary the contact information provided in the written designation for the lifetime of the policy, and allow the policyholder to update the written designation if the policyholder so requests. (c) (1) A policyholder retains the right to designate the one additional person to receive notice of lapse, termination, expiration, nonrenewal, or cancellation for nonpayment of premium at any time, at the initiative of the policyholder, regardless of whether the policyholder previously declined to exercise that right. At least every two years, the insurer shall notify the policyholder in writing or by electronic transmission pursuant to Section 38.6, of whichever of the following applies: (A) If a policyholder has previously provided a designation pursuant to this subdivision, in writing or by electronic transmission pursuant to Section 38.6, the right to change the prior designation by replacing or deleting a person to receive notice of lapse, termination, expiration, nonrenewal, or cancellation for nonpayment of premium. (B) If the policyholder has not previously designated a person to receive the notice of lapse, termination, expiration, nonrenewal, or cancellation for nonpayment of premium pursuant to this subdivision, the right to designate a person to receive notice of lapse, termination, expiration, nonrenewal, or cancellation for nonpayment of premium. (2) The notice requirements in subparagraphs (A) and (B) of paragraph (1) may be provided to a policyholder in a single notice and shall not require two separate notices. (d) When a policyholder pays the premium for an insurance policy through a payroll or pension deduction plan, the requirements contained in paragraph (1) of subdivision (b) need not be met until 60 days after the policyholder is no longer on that deduction payment plan. (e) An insurance policy shall not lapse or be terminated for nonpayment of premium unless the insurer, at least 10 days prior to the effective date of the lapse, termination, expiration, nonrenewal, or cancellation, gives notice to the individual designated pursuant to subdivision (a) or (b) at the address provided by the policyholder for purposes of receiving the notice of lapse, termination, expiration, nonrenewal, or cancellation for nonpayment of premium. Notwithstanding any other law, notice shall be given by first-class United States mail, postage prepaid, within 10 days after the premium is due and unpaid. This subdivision does not modify requirements for notice to the policyholder of lapse, termination, expiration, nonrenewal, or cancellation set forth in other sections of this code. (f) This section applies only to policies of private passenger automobile insurance that provide coverage for six months or longer, policies of residential property insurance as described in subdivision (a) of Section 10087 that take effect or that are renewed after the effective date of this section, and policies of individual disability income insurance as described in subdivision (c) of Section 799.01, except if the premiums for the individual disability income policy are paid entirely by the employer. (g) This section applies to policies that are issued and take effect or that are renewed on or after January 1, 2016. (h) An individual designated by a policyholder pursuant to this section to receive notice of lapse, termination, expiration, nonrenewal, or cancellation of the policy for nonpayment of premium does not have any rights, whether as an additional insured or otherwise, to any benefits under the policy, other than the right to receive notice as provided by this section. (Amended by Stats. 2022, Ch. 424, Sec. 2. (SB 1242) Effective January 1, 2023.)
  17. 4.

    ## Insurance Code - INS ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    Actions or proceedings started before the code takes effect, and accrued rights, are not affected; later procedure must conform to the code as far as possible.

    ## Insurance Code - INS ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1935, Ch. 145. ) ## 4. No action or proceeding commenced before this code takes effect, and no right accrued, is affected by the provisions of this code, but all procedure thereafter taken therein shall conform to the provisions of this code so far as possible. (Enacted by Stats. 1935, Ch. 145.)
  18. 40.

    ## Insurance Code - INS ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1935, Ch. 145. )

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    Insurers formed before this code takes effect keep their existence, but must then operate under this code.

    ## Insurance Code - INS ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1935, Ch. 145. ) ## 40. The existence of insurers formed prior to the date this code takes effect shall not be affected by the enactment of this code nor by any repeal of the laws under which they were formed, but such insurers shall thereafter operate under the provisions of this code. (Enacted by Stats. 1935, Ch. 145.)
  19. 4010.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 1. General Provisions [4010 - 4019] ( Article 1 added by Stats. 1963, Ch. 1772. )

    Verify source ↗

    A mutual insurer is an insurance corporation without capital stock owned collectively by its policyholders, and those policyholders may vote in electing the directors.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 1. General Provisions [4010 - 4019] ( Article 1 added by Stats. 1963, Ch. 1772. ) ## 4010. A “mutual” insurer is an insurance corporation without capital stock owned by its policyholders collectively, who have the right to vote in the election of its directors. (Added by Stats. 1963, Ch. 1772.)
  20. 4011.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 1. General Provisions [4010 - 4019] ( Article 1 added by Stats. 1963, Ch. 1772. )

    Verify source ↗

    Section 36 applies to domestic and foreign mutual insurers.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 1. General Provisions [4010 - 4019] ( Article 1 added by Stats. 1963, Ch. 1772. ) ## 4011. The provisions of Section 36 shall apply to domestic mutual insurers as well as foreign mutual insurers. (Added by Stats. 1963, Ch. 1772.)
  21. 4012.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 1. General Provisions [4010 - 4019] ( Article 1 added by Stats. 1963, Ch. 1772. )

    Verify source ↗

    Domestic mutual insurers are subject to the code like other incorporated insurers, but they do not have to issue capital stock or shares and do not have to distribute annual reports except at initial issuance or yearly renewal.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 1. General Provisions [4010 - 4019] ( Article 1 added by Stats. 1963, Ch. 1772. ) ## 4012. Domestic mutual insurers, incorporating or qualifying to transact any or all of the classes of insurance designated in Sections 100 through 123 and 700. 01, shall be subject to all provisions of this code applicable to other incorporated insurers, except where otherwise provided. Domestic mutual insurers shall not be required to have or issue capital stock or shares nor shall they be required to distribute an annual report to a member other than at the time of the initial policy issuance or once each year on renewal. The provisions of Section 1140 shall apply to such an insurer except that the provisions of the Corporation Law referring to shareholders or members shall be applied as though such provisions referred to the policyholders or members of a mutual. (Amended by Stats. 1983, Ch. 392, Sec. 1.)
  22. 4013.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 1. General Provisions [4010 - 4019] ( Article 1 added by Stats. 1963, Ch. 1772. )

    Verify source ↗

    A policyholder of a domestic mutual insurer is a member during the policy period, except a reinsurance contract holder. Tail or extended reporting coverage does not extend a claims-made policy period, and membership rights end when that period ends.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 1. General Provisions [4010 - 4019] ( Article 1 added by Stats. 1963, Ch. 1772. ) ## 4013. (a) Each policyholder of a domestic mutual insurer, other than the holder of a reinsurance contract, is a member of the insurer during the policy period, as defined in the policy or the declarations page of the policy, with all rights and obligations of that membership, and the policy shall so specify. (b) A “tail” or extended reporting policy or endorsement permitting claims to be reported after the expiration or termination of the policy period shall not extend the policy period of a “claims made” policy and all rights and obligations of membership shall cease upon the expiration or termination of the policy period. If an insurer has allowed or does allow, by contract, conduct, or otherwise, the holder of a “tail” or extended reporting policy or endorsement to have privileges, in whole or in part, identical, or similar to some or all of the rights of membership, the holder is nevertheless not deemed a member. (c) Subdivision (b) and the modifications to subdivision (a) made by the act adding this subdivision, are declaratory of existing law and do not affect any existing contract rights. (Amended by Stats. 2000, Ch. 255, Sec. 1. Effective January 1, 2001.)
  23. 4014.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 1. General Provisions [4010 - 4019] ( Article 1 added by Stats. 1963, Ch. 1772. )

    Verify source ↗

    Many listed persons and entities may become policyholder members of a mutual insurer.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 1. General Provisions [4010 - 4019] ( Article 1 added by Stats. 1963, Ch. 1772. ) ## 4014. Any person, government or governmental agency, state or political subdivision thereof, public or private corporation, board, association, estate, trustee or fiduciary may be a policyholder member of a mutual insurer. (Added by Stats. 1963, Ch. 1772.)
  24. 4015.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 1. General Provisions [4010 - 4019] ( Article 1 added by Stats. 1963, Ch. 1772. )

    Verify source ↗

    A member of a qualified domestic mutual insurer has the same kind of rights and relationship as a stockholder in a domestic stock insurer, unless this chapter provides אחרת.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 1. General Provisions [4010 - 4019] ( Article 1 added by Stats. 1963, Ch. 1772. ) ## 4015. With respect to the management, records, and affairs of a domestic mutual insurer qualified to transact any or all of the classes of insurance designated in Section 700.01, and except as otherwise provided in this chapter, a member of such mutual insurer shall have the same character of rights and relationship as a stockholder has toward a domestic stock insurer subject to the provisions of this code. (Amended by Stats. 1975, Ch. 824.)
  25. 4016.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 1. General Provisions [4010 - 4019] ( Article 1 added by Stats. 1963, Ch. 1772. )

    Verify source ↗

    Each member of a domestic mutual insurer is entitled to one vote on each matter at members’ meetings.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 1. General Provisions [4010 - 4019] ( Article 1 added by Stats. 1963, Ch. 1772. ) ## 4016. Each member of a domestic mutual insurer is entitled to one vote upon each matter coming to a vote at meetings of members. (Added by Stats. 1963, Ch. 1772.)
  26. 4016.1.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 1. General Provisions [4010 - 4019] ( Article 1 added by Stats. 1963, Ch. 1772. )

    Verify source ↗

    The insurer must give written notice of members’ meetings, including annual and special meetings, and the notice must state the meeting’s place, day, hour, and general business.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 1. General Provisions [4010 - 4019] ( Article 1 added by Stats. 1963, Ch. 1772. ) ## 4016.1. Notice of all meetings of members whether annual or special shall be given in writing to the members entitled to vote by the secretary, or an assistant secretary, or other persons charged with that duty, or if there be no such officer, or in case of his or her neglect or refusal, by any director or member. At the option of the insurer the notice may be imprinted on premium notices or receipts or on both. A notice may be given by the insurer to any member either personally, or by mail, or other means of written communication, charges prepaid, addressed to the member at his or her address appearing on the books of the insurer, or given by him or her to the insurer for the purpose of notice. If a member gives no address, notice shall be deemed to have been given him or her if sent by mail or other means of written communication addressed to the place where the principal office of the insurer is situated, or if published at least once in a newspaper of general circulation in the county in which the office is located. Notice of any meeting of members shall be sent to each member entitled thereto not less than seven days before a meeting, unless the bylaws provide otherwise. Notice of any meeting of members shall specify the place, the day, and the hour of the meeting and the general nature of the business to be transacted. Notice of an annual meeting to be held at the time and place specified shall be sufficiently given if published at least once in each of four successive weeks in a newspaper of general circulation in the county in which the principal office of the insurer is located, and if so published no other notice of the meeting shall be required. (Added by Stats. 1981, Ch. 300, Sec. 1.)
  27. 4016.2.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 1. General Provisions [4010 - 4019] ( Article 1 added by Stats. 1963, Ch. 1772. )

    Verify source ↗

    A domestic mutual insurer has a quorum when 5% of voting members are present in person or by proxy, unless its articles or bylaws say otherwise.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 1. General Provisions [4010 - 4019] ( Article 1 added by Stats. 1963, Ch. 1772. ) ## 4016.2. (a) The presence in person or by proxy of 5 percent of the members of a domestic mutual insurer entitled to vote at any meeting shall constitute a quorum for the transaction of all business of the insurer, including but not limited to, the amendment of the articles of incorporation or bylaws of the insurer, unless otherwise provided in the articles of incorporation or bylaws of such insurer. (b) Any required member approval shall be by the affirmative vote of a number of members which, as to a stock corporation, would constitute approval of the shareholders (Section 153 of the Corporations Code) rather than approval of the outstanding shares (Section 152 of the Corporations Code). (Amended by Stats. 1983, Ch. 21, Sec. 1. Effective May 5, 1983.)
  28. 4017.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 1. General Provisions [4010 - 4019] ( Article 1 added by Stats. 1963, Ch. 1772. )

    Verify source ↗

    A member may vote in person or by written proxy, but the proxy must be filed with the corporate secretary at least five days before the meeting.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 1. General Provisions [4010 - 4019] ( Article 1 added by Stats. 1963, Ch. 1772. ) ## 4017. A member shall have the right to vote in person or by his written proxy filed with the corporate secretary not less than five days prior to the meeting. No such 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; or (b) The date of termination of membership; or (c) Eleven months from the date of execution of the proxy; or (d) Such time as may be specified in the bylaws, not to exceed eleven months. (Amended by Stats. 1980, Ch. 209, Sec. 4.)
  29. 4018.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 1. General Provisions [4010 - 4019] ( Article 1 added by Stats. 1963, Ch. 1772. )

    Verify source ↗

    A member’s vote on a proposal to divest the insurer’s business or assets, or most of them, may be counted only if cast in person or by a newly executed proxy that specifically covers the matter.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 1. General Provisions [4010 - 4019] ( Article 1 added by Stats. 1963, Ch. 1772. ) ## 4018. No member’s vote upon any proposal to divest the insurer of its business or assets, or the major part thereof, shall be registered or taken except in person or by proxy newly executed and specific as to the matter to be voted upon. (Added by Stats. 1963, Ch. 1772.)
  30. 4019.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 1. General Provisions [4010 - 4019] ( Article 1 added by Stats. 1963, Ch. 1772. )

    Verify source ↗

    This chapter does not apply to certain converted mutual insurers and related holding companies, except that Section 4016.2 still applies in some cases.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 1. General Provisions [4010 - 4019] ( Article 1 added by Stats. 1963, Ch. 1772. ) ## 4019. This chapter does not apply to a mutual insurer that has converted to a mutual legal reserve insurer pursuant to former Chapter 9 (commencing with Section 10810) of Part 2 of Division 2. Except for Section 4016.2, this chapter does not apply to (a) a mutual insurer that has completed proceedings for voluntary mutualization pursuant to Chapter 13 (commencing with Section 11525) of Part 2 or (b) a stock life insurer that has converted from a mutual life insurer, or a mutual holding company or a stock holding company formed, pursuant to proceedings under Chapter 14 (commencing with Section 11535) of Part 2. (Amended by Stats. 1998, Ch. 421, Sec. 3. Effective January 1, 1999.)
  31. 4020.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 2. Directors [4020 - 4023] ( Article 2 added by Stats. 1963, Ch. 1772. )

    Verify source ↗

    Every domestic mutual insurer must be managed by a board of directors.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 2. Directors [4020 - 4023] ( Article 2 added by Stats. 1963, Ch. 1772. ) ## 4020. The affairs of every domestic mutual insurer shall be managed by a board of directors consisting of not less than 5 directors nor more than 15 directors. (Added by Stats. 1963, Ch. 1772.)
  32. 4021.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 2. Directors [4020 - 4023] ( Article 2 added by Stats. 1963, Ch. 1772. )

    Verify source ↗

    Directors of a domestic mutual insurer are elected by members at the annual meeting.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 2. Directors [4020 - 4023] ( Article 2 added by Stats. 1963, Ch. 1772. ) ## 4021. Directors shall be elected by the members of a domestic mutual insurer at the annual meeting of members. Directors may be elected for terms of not more than five years each and until their successors are elected and have qualified, and if to be elected for terms of more than one year, the insurer’s bylaws shall provide for a staggered term system under which the terms of a proportionate part of the number of the board of directors shall expire on the date of each annual meeting of members. (Added by Stats. 1963, Ch. 1772.)
  33. 4022.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 2. Directors [4020 - 4023] ( Article 2 added by Stats. 1963, Ch. 1772. )

    Verify source ↗

    A director of a mutual insurer must be a policyholder of that insurer.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 2. Directors [4020 - 4023] ( Article 2 added by Stats. 1963, Ch. 1772. ) ## 4022. A director of a mutual insurer shall be a policyholder thereof. (Added by Stats. 1963, Ch. 1772.)
  34. 4023.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 2. Directors [4020 - 4023] ( Article 2 added by Stats. 1963, Ch. 1772. )

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    If an insurer operates only as an authorized insurer in California, a majority of its board members must be California citizens who actually live in the state.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 2. Directors [4020 - 4023] ( Article 2 added by Stats. 1963, Ch. 1772. ) ## 4023. As to an insurer operating as an authorized insurer only in the State of California, a majority of the members of the insurer’s board of directors shall be citizens of and shall actually reside in this State. (Added by Stats. 1963, Ch. 1772.)
  35. 4030.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 3. Management and Exclusive Agency Contracts [4030 - 4034] ( Article 3 added by Stats. 1963, Ch. 1772. )

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    A domestic mutual insurer may not make certain management or exclusive-agency contracts unless the commissioner files and approves them.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 3. Management and Exclusive Agency Contracts [4030 - 4034] ( Article 3 added by Stats. 1963, Ch. 1772. ) ## 4030. A domestic mutual insurer shall not hereafter make any contract whereby any person is granted or is to enjoy in fact the management of the insurer to the substantial exclusion of its board of directors or to have the controlling or preemptive right to produce substantially all insurance business for the insurer, unless the contract is filed with and approved by the commissioner. That contract shall not be effective unless and until approved by the insurance commissioner. That approval shall be obtained by filing application for approval with the commissioner accompanied by a one-hundred-fifty-dollar ($150) fee. Any disapproval shall be delivered to the insurer in writing, stating the grounds therefor. (Amended by Stats. 2017, Ch. 534, Sec. 51. (AB 1699) Effective January 1, 2018.)
  36. 4031.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 3. Management and Exclusive Agency Contracts [4030 - 4034] ( Article 3 added by Stats. 1963, Ch. 1772. )

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    Manager or producer contracts must require a yearly written report to the insurer’s board of directors within 90 days after each calendar year ends.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 3. Management and Exclusive Agency Contracts [4030 - 4034] ( Article 3 added by Stats. 1963, Ch. 1772. ) ## 4031. Any such contract shall provide that any such manager or producer of its business shall within 90 days after expiration of each calendar year furnish the insurer’s board of directors a written statement of amounts received under or on account of the contract and amounts expended thereunder during such calendar year, including the emoluments received therefrom by the respective directors, officers, and other principal management personnel of the manager or producer, and with such classification of items and further detail as the insurer’s board of directors may reasonably require. (Added by Stats. 1963, Ch. 1772.)
  37. 4032.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 3. Management and Exclusive Agency Contracts [4030 - 4034] ( Article 3 added by Stats. 1963, Ch. 1772. )

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    The commissioner must disapprove a contract if it has any of the listed defects.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 3. Management and Exclusive Agency Contracts [4030 - 4034] ( Article 3 added by Stats. 1963, Ch. 1772. ) ## 4032. The commissioner shall disapprove any such contract if he finds that it: (a) Subjects the insurer to excessive charges; or (b) Is to extend for an unreasonable length of time; or (c) Does not contain fair and adequate standards of performance; or (d) Contains other inequitable provisions or provisions which impair the proper interests of policyholders of the insurer. (Added by Stats. 1963, Ch. 1772.)
  38. 4033.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 3. Management and Exclusive Agency Contracts [4030 - 4034] ( Article 3 added by Stats. 1963, Ch. 1772. )

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    The commissioner may withdraw approval of an approved contract after a hearing if the original approval basis no longer exists or the contract has become subject to disapproval under Section 4032 grounds.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 3. Management and Exclusive Agency Contracts [4030 - 4034] ( Article 3 added by Stats. 1963, Ch. 1772. ) ## 4033. The commissioner may, after a hearing held thereon, withdraw his approval of any such contract theretofore approved by him, if he finds that the bases of his original approval no longer exist, or that the contract has, in actual operation, shown itself to be subject to disapproval on any of the grounds referred to in Section 4032 above. (Added by Stats. 1963, Ch. 1772.)
  39. 4034.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 3. Management and Exclusive Agency Contracts [4030 - 4034] ( Article 3 added by Stats. 1963, Ch. 1772. )

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    A holder of a contract covered by this article must submit to examination by the commissioner under the cited cross-reference.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 3. Management and Exclusive Agency Contracts [4030 - 4034] ( Article 3 added by Stats. 1963, Ch. 1772. ) ## 4034. The holder of any such contract described in this Article shall be subject to examination by the commissioner pursuant to Article 4 (beginning with Section 730), Chapter 1, Part 2, Division 1 of this code. (Added by Stats. 1963, Ch. 1772.)
  40. 4040.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 4. Loans [4040 - 4044] ( Article 4 added by Stats. 1963, Ch. 1772. )

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    A mutual insurer may borrow money, but the loan terms must fit this section and may need commissioner approval.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 4. Loans [4040 - 4044] ( Article 4 added by Stats. 1963, Ch. 1772. ) ## 4040. A mutual insurer 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 insurer’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 insurer 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. (Amended by Stats. 2004, Ch. 4, Sec. 2. Effective January 21, 2004.)
  41. 4042.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 4. Loans [4040 - 4044] ( Article 4 added by Stats. 1963, Ch. 1772. )

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    Issuing a document that evidences a loan requires the commissioner’s securities permit.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 4. Loans [4040 - 4044] ( Article 4 added by Stats. 1963, Ch. 1772. ) ## 4042. The issuance of any document evidencing any such loan shall require the commissioner’s securities permit under Article 8 of Chapter 1, Part 2, Division 1 (commencing with Section 820). (Added by Stats. 1963, Ch. 1772.)
  42. 4044.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 4. Loans [4040 - 4044] ( Article 4 added by Stats. 1963, Ch. 1772. )

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    This section does not apply to certain insurer loans: loans from banks or other financial institutions made in the ordinary course of business, and loans secured by pledge or mortgage of assets.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 4. Loans [4040 - 4044] ( Article 4 added by Stats. 1963, Ch. 1772. ) ## 4044. This section shall not apply to loans obtained by the insurer in ordinary course of business from banks and other financial institutions, nor to loans secured by pledge or mortgage of assets. (Added by Stats. 1963, Ch. 1772.)
  43. 4050.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 5. Dividends to Policyholders [4050 - 4052] ( Article 5 added by Stats. 1963, Ch. 1772. )

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    Directors of a domestic mutual insurer may pay or credit dividends to members, but only from the specified surplus funds portion.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 5. Dividends to Policyholders [4050 - 4052] ( Article 5 added by Stats. 1963, Ch. 1772. ) ## 4050. The directors of a domestic mutual insurer may from time to time apportion and pay or credit to its members dividends only out of that part of its surplus funds which represents net realized savings, net realized earnings, and net realized capital gains, all in excess of a surplus equivalent to the aggregate of paid-in capital and unassigned surplus required by this code for the issuance of a certificate of authority to a capital stock insurer transacting the same classes of insurance. (Added by Stats. 1963, Ch. 1772.)
  44. 4051.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 5. Dividends to Policyholders [4050 - 4052] ( Article 5 added by Stats. 1963, Ch. 1772. )

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    An insurer may pay an otherwise proper dividend from savings, earnings, and gains even if its total surplus is lower than unpaid contributed surplus.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 5. Dividends to Policyholders [4050 - 4052] ( Article 5 added by Stats. 1963, Ch. 1772. ) ## 4051. A dividend otherwise proper may be payable out of such savings, earnings, and gains even though the insurer’s total surplus is then less than the aggregate of contributed surplus remaining unpaid by the insurer. (Added by Stats. 1963, Ch. 1772.)
  45. 4052.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 5. Dividends to Policyholders [4050 - 4052] ( Article 5 added by Stats. 1963, Ch. 1772. )

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    Dividends on a workers’ compensation policy must follow Section 11738, and a mutual policy is treated as a participating policy for that purpose.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 5. Dividends to Policyholders [4050 - 4052] ( Article 5 added by Stats. 1963, Ch. 1772. ) ## 4052. The payment of any such dividends on a workers’ compensation policy shall be subject to the provisions of Section 11738 and for that purpose a mutual policy shall be considered to be a participating policy. (Amended by Stats. 2018, Ch. 231, Sec. 13. (AB 2045) Effective January 1, 2019.)
  46. 4060.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 6. Nonassessable Policies [4060 - 4064] ( Article 6 added by Stats. 1963, Ch. 1772. )

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    A domestic mutual insurer may remove members’ contingent liability from its policies if it keeps enough unimpaired surplus funds and gets the commissioner’s certificate; the application must include a $283 fee.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 6. Nonassessable Policies [4060 - 4064] ( Article 6 added by Stats. 1963, Ch. 1772. ) ## 4060. A domestic mutual insurer while maintaining unimpaired surplus funds not less in amount than one and one-half times the minimum paid-in capital stock required of a domestic stock insurer formed under this code for authority to transact the same class or classes of insurance, may, upon receipt of the commissioner’s certificate so authorizing, extinguish the contingent liability to assessment of its members as to all its policies in force and may omit provisions imposing contingent liability in all policies currently issued. A fee of two hundred eighty-three dollars ($283) shall accompany any application for that certificate. (Amended by Stats. 2017, Ch. 534, Sec. 52. (AB 1699) Effective January 1, 2018.)
  47. 4061.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 6. Nonassessable Policies [4060 - 4064] ( Article 6 added by Stats. 1963, Ch. 1772. )

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    The commissioner may not authorize a domestic insurer to remove members’ contingent liability unless the insurer does so for all members and all its policies for all kinds of insurance it transacts.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 6. Nonassessable Policies [4060 - 4064] ( Article 6 added by Stats. 1963, Ch. 1772. ) ## 4061. The commissioner shall not authorize a domestic insurer to extinguish the contingent liability of any of its members or in any of its policies to be issued, unless it qualifies to and does extinguish such liability of all its members and in all such policies for all kinds of insurance transacted by it. No assessment shall be levied against any member or subscriber with respect to any nonassessable policy issued when the insurer had an unrevoked certificate to issue nonassessable policies. (Added by Stats. 1963, Ch. 1772.)
  48. 4062.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 6. Nonassessable Policies [4060 - 4064] ( Article 6 added by Stats. 1963, Ch. 1772. )

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    A foreign or alien mutual insurer may issue nonassessable policies to its members in this State if it acts under its charter and the laws of its domicile.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 6. Nonassessable Policies [4060 - 4064] ( Article 6 added by Stats. 1963, Ch. 1772. ) ## 4062. A foreign or alien mutual insurer may issue nonassessable policies to its members in this State pursuant to its charter and the laws of its domicile. (Added by Stats. 1963, Ch. 1772.)
  49. 4063.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 6. Nonassessable Policies [4060 - 4064] ( Article 6 added by Stats. 1963, Ch. 1772. )

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    The commissioner must revoke a domestic mutual insurer’s certificate to issue policies without contingent liability if the insurer’s assets fall below required liabilities and surplus, or if the insurer asks for revocation by approved board resolution.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 6. Nonassessable Policies [4060 - 4064] ( Article 6 added by Stats. 1963, Ch. 1772. ) ## 4063. The commissioner shall revoke the certificate of a domestic mutual insurer to issue policies without contingent liability if (a) At any time the insurer’s assets are less than the sum of its liabilities and the surplus required for such certificate, or (b) The insurer, by resolution of its board of directors approved by a majority of its members, requests that the certificate be revoked. (Added by Stats. 1963, Ch. 1772.)
  50. 4064.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 6. Nonassessable Policies [4060 - 4064] ( Article 6 added by Stats. 1963, Ch. 1772. )

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    An insurer may not issue or renew a policy during the absence of the required certificate unless the policy includes contingent liability for the policyholder.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 6. Nonassessable Policies [4060 - 4064] ( Article 6 added by Stats. 1963, Ch. 1772. ) ## 4064. During the absence of such certificate the insurer shall not issue any policy without providing therein for the contingent liability of the policyholder, nor renew any policy which is then in force without endorsing the same to provide for such contingent liability. (Added by Stats. 1963, Ch. 1772.)
  51. 4070.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 7. Insolvency [4070- 4070.] ( Article 7 added by Stats. 1963, Ch. 1772. )

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    An insurer is insolvent when its surplus falls below the paid-in capital required for a capital stock company to write the same kinds of insurance.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 7. Insolvency [4070- 4070.] ( Article 7 added by Stats. 1963, Ch. 1772. ) ## 4070. Such an insurer is insolvent if its surplus becomes less than the amount of paid-in capital required of a capital stock company to qualify to transact the same classes of insurance. (Added by Stats. 1963, Ch. 1772.)
  52. 4080.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 8. Applicable Insurance Laws [4080 - 4081] ( Article 8 added by Stats. 1963, Ch. 1772. )

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    A mutual insurer is subject to the insurance code and the commissioner’s applicable rules and regulations.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 8. Applicable Insurance Laws [4080 - 4081] ( Article 8 added by Stats. 1963, Ch. 1772. ) ## 4080. Such an insurer shall be subject to all the provisions of this code and all the applicable rules and regulations of the commissioner. Such code provisions and such rules and regulations, when applied to such insurers, shall be construed in accordance with the fundamental nature of a mutual insurer. In the event of any direct conflicts between such code provisions and the provisions of this chapter, the latter shall prevail. Such other code provisions may, however, be used to supplement or explain the provisions of this chapter. (Added by Stats. 1963, Ch. 1772.)
  53. 4081.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 8. Applicable Insurance Laws [4080 - 4081] ( Article 8 added by Stats. 1963, Ch. 1772. )

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    County mutual fire insurers may merge into a general mutual insurer if they follow the procedure in Article 9.5, and the general mutual insurer becomes the surviving corporation.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 8. Applicable Insurance Laws [4080 - 4081] ( Article 8 added by Stats. 1963, Ch. 1772. ) ## 4081. Any county mutual fire insurer, or two or more such insurers, may merge into a general mutual insurer described in this chapter by following the procedure in Article 9.5 (commencing with Section 7040) of Chapter 5, Part 1, Division 2 of this code. Such general mutual insurer shall become the surviving corporation. In addition, by following the above-mentioned procedure any two or more county mutual fire insurers may merge, concurrently with the transformation of one of them into a general mutual insurer described herein, as provided in Section 7044. 5. (Added by Stats. 1967, Ch. 455.)
  54. 4090.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 9. Merger, Consolidation, Reinsurance, or Transfer of Assets and Liabilities [4090 - 4096] ( Article 9 added by Stats. 1975, Ch. 824. )

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    A domestic mutual insurer covered by this article may merge, consolidate, reinsure its policies, or transfer its assets to another insurer if it follows this article’s procedure.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 9. Merger, Consolidation, Reinsurance, or Transfer of Assets and Liabilities [4090 - 4096] ( Article 9 added by Stats. 1975, Ch. 824. ) ## 4090. By following the procedure specified in this article, any domestic mutual insurer described in this article may merge, consolidate, or otherwise unite with or become a part of, or may reinsure all of its policies with and, upon assumption of all of its liabilities, may transfer all of its assets to, another insurer, domestic or foreign. Chapter 13 (commencing with Section 1300) of Division 1 of Title 1 of the Corporations Code and Article 1 (commencing with Section 11535) of Chapter 14 of Part 2 of Division 2 do not apply to any such transaction. (Amended by Stats. 1995, Ch. 728, Sec. 4. Effective January 1, 1996.)
  55. 4091.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 9. Merger, Consolidation, Reinsurance, or Transfer of Assets and Liabilities [4090 - 4096] ( Article 9 added by Stats. 1975, Ch. 824. )

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    A domestic mutual insurer’s merger-type transaction plan must be approved by a majority of its board and then submitted to the commissioner, who may examine it and require changes.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 9. Merger, Consolidation, Reinsurance, or Transfer of Assets and Liabilities [4090 - 4096] ( Article 9 added by Stats. 1975, Ch. 824. ) ## 4091. The plan and agreement by which any such transaction is to be effected shall be approved by a resolution of the majority of the board of directors of each domestic mutual insurer reciting the reasons for and the purposes of the proposed transaction and the manner in which the transaction is expected to benefit and serve the best interests of the domestic mutual insurer and its members. The plan and agreement shall thereafter be submitted to the commissioner, who shall examine the same and require such provisions to be inserted in the agreement and such actions to be taken in connection with the transaction including, but not limited to the following: (a) The terms and conditions of the transaction. (b) Any fee, commission, or other valuable consideration whatsoever, other than regular salary and compensation paid to any director, officer, agent, or employee of the domestic mutual insurer in connection with the transaction. (c) At the expense of the applicant, an opinion as to the fairness of the terms of the plan and an appraisal of the fair value of each insurer, together with the respective equity interests of the members therein, by one or more qualified disinterested persons appointed by the domestic mutual insurer with the approval of the commissioner unless the commissioner finds that such an opinion or appraisal is not necessary to protect the interests of current members of the domestic mutual insurer. (d) The contents of the notice of the vote on the transaction by the members of each domestic mutual insurer that is a party thereto. (e) The manner and form of voting thereon by the members of each such domestic mutual insurer. (f) Any other change as the commissioner may deem necessary in order that the transaction may be fair, just, and equitable to the parties to the transaction and their respective policyholders, owners, creditors, and the public. (Amended by Stats. 1995, Ch. 728, Sec. 5. Effective January 1, 1996.)
  56. 4092.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 9. Merger, Consolidation, Reinsurance, or Transfer of Assets and Liabilities [4090 - 4096] ( Article 9 added by Stats. 1975, Ch. 824. )

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    This section requires advance notice of a member meeting, sets a 10% quorum, and allows members present to adjourn if there is no quorum.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 9. Merger, Consolidation, Reinsurance, or Transfer of Assets and Liabilities [4090 - 4096] ( Article 9 added by Stats. 1975, Ch. 824. ) ## 4092. When any such plan and agreement shall have been approved by the commissioner, with any changes required by him, the same shall be approved in the case of each domestic mutual insurer that is a party to the transaction by not less than two-thirds of the votes cast by the members thereof represented in person or by proxy at a meeting called to consider the same. At least 30 days before the day fixed for the meeting, notice of such meeting and its purpose shall be given to the members at their addresses appearing on the books maintained at the home office of the insurer. With respect to members whose addresses do not appear on such books of the insurer, notice shall be deemed to have been given if published at least once in some newspaper of general circulation in the county in which the principal office of the insurer is located. At such meeting the presence in person or by proxy of 10 percent of such members of such insurer shall constitute a quorum. In the absence of a quorum the members present at the meeting in person or by proxy may adjourn the meeting to a later date. No further notice need be given of the date to which the meeting is adjourned. (Added by Stats. 1975, Ch. 824.)
  57. 4093.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 9. Merger, Consolidation, Reinsurance, or Transfer of Assets and Liabilities [4090 - 4096] ( Article 9 added by Stats. 1975, Ch. 824. )

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    If the vote is yes, the insurers must file certified transaction papers with the commissioner, and a foreign insurer must also file required home-state approval evidence. If the commissioner approves, the commissioner issues a certificate, and the transaction becomes effective after filing with the Secretary of State.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 9. Merger, Consolidation, Reinsurance, or Transfer of Assets and Liabilities [4090 - 4096] ( Article 9 added by Stats. 1975, Ch. 824. ) ## 4093. If the vote is in the affirmative, a certified copy of all proceedings relating to the proposed transaction shall be filed with the commissioner. If one of the insurers that is a party to the transaction is a foreign corporation there shall also be filed with the commissioner evidence of an approval, consent, or authorization as may be required by the laws of the state of incorporation of the foreign insurer. If the commissioner finds that the proceedings have been in accordance with the law and the commissioner’s requirements, he or she shall issue a certificate approving the plan and agreement and the transaction shall become effective when the certificate, the agreement, and any other documents required by law have been filed with the Secretary of State. The fee for issuing the certificate approving the transaction shall be six thousand three hundred fifty dollars ($6,350), payable in advance with the filing with the commissioner of the first papers relating to the proposed transaction; eight dollars ($8) shall be charged for each signed and sealed or certified copy thereof issued as part of the same transaction in which the original certificate is issued. (Amended by Stats. 2017, Ch. 534, Sec. 53. (AB 1699) Effective January 1, 2018.)
  58. 4094.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 9. Merger, Consolidation, Reinsurance, or Transfer of Assets and Liabilities [4090 - 4096] ( Article 9 added by Stats. 1975, Ch. 824. )

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    A merger, consolidation, or other unification plan must state that the surviving or continuing corporation gets the parties’ rights and property and assumes the merged corporation’s obligations and liabilities.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 9. Merger, Consolidation, Reinsurance, or Transfer of Assets and Liabilities [4090 - 4096] ( Article 9 added by Stats. 1975, Ch. 824. ) ## 4094. Any plan of merger, consolidation, or other unification under this article shall provide that all rights and properties of the parties to the plan of merger, consolidation or other unification shall accrue to and become the rights and properties of the surviving or consolidated or continuing corporation which shall succeed to and assume all the obligations and liabilities of the merged, consolidating, or transferring corporation in the same manner as if incurred or contracted by the surviving, consolidated, or continuing corporation. (Added by Stats. 1975, Ch. 824.)
  59. 4095.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 9. Merger, Consolidation, Reinsurance, or Transfer of Assets and Liabilities [4090 - 4096] ( Article 9 added by Stats. 1975, Ch. 824. )

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    When a mutual insurer is merged, consolidated, or reorganized into a stock insurer, the plan must describe how members’ equity interests will be converted or exchanged, with some options and limits for policyholders and noteholders.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 9. Merger, Consolidation, Reinsurance, or Transfer of Assets and Liabilities [4090 - 4096] ( Article 9 added by Stats. 1975, Ch. 824. ) ## 4095. In the event a mutual insurer is merged, consolidated, or part of a reorganization under the procedures specified in this article, and the surviving, consolidated, or continuing company is an incorporated stock insurer, the plan shall provide for the manner of converting or exchanging the equity interests of current members in the domestic mutual insurer into shares, subscription rights, warrants, options, cash, dividends, premium credits, certificates of contribution, or any other interests that may be provided in the plan. However, notwithstanding the foregoing, the equity interest of a policyholder in the mutual insurer may be converted or exchanged solely into premium credits if the plan and agreement shall so provide, but only at the policyholder’s election. Any person holding a subscription note or other debt instrument evidencing a capital contribution to the domestic mutual insurer shall be entitled upon demand to have the note or debt instrument redeemed for cash or securities as provided in the plan. The plan may provide for additional securities to be sold to directors, officers, employees, and former members of the domestic mutual insurer in accordance with the provisions of Article 8 (commencing with Section 820) of Chapter 1 of Part 2 of Division 1. Nothing in this section shall preclude the issuance of different securities, subject to the approval of the commissioner, provided that comparable securities shall be issued at prices not less than the conversion or exchange values of any such securities distributed to current policyholders. Notwithstanding any other provision of law, conversion or exchange constitutes full payment and discharge of the members’ property interest in the domestic mutual insurer and the members have no other rights with respect thereto, except for rights relating to a continuing debt or equity interest that a former member holds in the surviving insurer. (Added by Stats. 1995, Ch. 728, Sec. 7. Effective January 1, 1996.)
  60. 4096.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 9. Merger, Consolidation, Reinsurance, or Transfer of Assets and Liabilities [4090 - 4096] ( Article 9 added by Stats. 1975, Ch. 824. )

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    If a domestic mutual insurer is merged, consolidated, or reorganized and the surviving company is a nonadmitted insurer, the merger plan must provide either for admission to transact insurance in California or for withdrawal of any nonsurviving insurer admitted in California.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 9. Merger, Consolidation, Reinsurance, or Transfer of Assets and Liabilities [4090 - 4096] ( Article 9 added by Stats. 1975, Ch. 824. ) ## 4096. In the event a domestic mutual insurer is merged, consolidated, or a part of a reorganization under the procedures specified in this article, and the surviving, consolidated, or continuing company is a nonadmitted insurer, the plan of merger shall provide either for that insurer to be admitted to transact insurance in California or for any nonsurviving insurer admitted in California to withdraw from the state. (Added by Stats. 1995, Ch. 728, Sec. 8. Effective January 1, 1996.)
  61. 4097.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 10. Conversion of an Incorporated Medical Malpractice Mutual Insurer into an Incorporated Stock Insurer [4097 - 4097.20] ( Article 10 added by Stats. 1998, Ch. 421, Sec. 4. )

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    A domestic incorporated medical malpractice mutual insurer may convert into a stock insurer, and a mutual holding company may convert into a stock corporation, if the article’s requirements are met.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 10. Conversion of an Incorporated Medical Malpractice Mutual Insurer into an Incorporated Stock Insurer [4097 - 4097.20] ( Article 10 added by Stats. 1998, Ch. 421, Sec. 4. ) ## 4097. (a) A domestic incorporated medical malpractice mutual insurer, issuing nonassessable policies on a reserve basis may be converted into an incorporated stock insurer issuing, on a reserve basis, nonassessable policies either by demutualization or by establishing a mutual holding company. To that end, it may provide and carry out a plan for the conversion by complying with the requirements of this article. (b) A mutual holding company may be converted into a stock corporation. To that end, it may provide and carry out a plan for the conversion by complying with the requirements of this article. (c) As part of the conversion authorized in this section, a domestic incorporated medical malpractice mutual insurer may merge with an incorporated stock insurer, if the merging insurers comply with the provisions of Article 9 (commencing with Section 4090) applicable to their participation in the merger, or may transfer its domicile to any other state, if the insurer complies with Section 709.5. (Added by Stats. 1998, Ch. 421, Sec. 4. Effective January 1, 1999.)
  62. 4097.01.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 10. Conversion of an Incorporated Medical Malpractice Mutual Insurer into an Incorporated Stock Insurer [4097 - 4097.20] ( Article 10 added by Stats. 1998, Ch. 421, Sec. 4. )

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    This section defines key terms used for medical malpractice mutual insurer conversion and demutualization under this article.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 10. Conversion of an Incorporated Medical Malpractice Mutual Insurer into an Incorporated Stock Insurer [4097 - 4097.20] ( Article 10 added by Stats. 1998, Ch. 421, Sec. 4. ) ## 4097.01. The definitions in this section apply to the following terms when used in this article. (a) “Adoption date” means the date the board of directors adopts the plan of conversion. (b) “Converted company” means the converted insurer or converted mutual holding company, as the case may be. (c) “Converted insurer” means the incorporated stock insurer into which a medical malpractice mutual insurer has been converted or merged or redomiciled in accordance with the provisions of this article. (d) “Converted mutual holding company” means the stock corporation into which a mutual holding company has been converted in accordance with this article. (e) “Converting mutual company” means, for a plan of conversion under this article, the medical malpractice mutual insurer or mutual holding company that is converting under the plan. (f) “Demutualization” means the conversion of a medical malpractice mutual insurer into a stock insurer without the establishment of a mutual holding company or the conversion of a mutual holding company into a stock corporation. (g) “Effective date” means, for the conversion of a medical malpractice mutual insurer, the date upon which the conversion of the mutual insurer is effective, as specified in the commissioner’s amendment to the mutual insurer’s certificate of authority issued in accordance with Section 4097.11, as a result of conversion proceedings under this article. For the conversion of a medical malpractice mutual holding company, “effective date” means the date upon which the conversion of a mutual holding company is effective, as specified in the amended articles of incorporation of the mutual holding company filed with the Secretary of State in accordance with Section 4097.11, as a result of conversion proceedings under this article. (h) “Eligible members” means, for the conversion of a mutual insurer, members of the mutual insurer who are of record, fully paid-up and otherwise in good standing on the mutual insurer’s adoption date and on its effective date, but shall not include those persons covered solely under a reporting endorsement to a claims made policy on either date. For the conversion of a mutual holding company, “eligible members” means the members of the mutual holding company who are of record, fully paid-up with respect to policies in effect issued by the converted insurer and are otherwise in good standing on the mutual holding company’s adoption date and on its effective date. (i) “Medical malpractice mutual insurer” means a mutual insurer organized under this chapter that writes predominantly medical malpractice insurance, as that class of insurance is defined in subdivision (d) of Section 108. A mutual insurer shall be considered to write predominantly medical malpractice insurance if, for each of the most recent five calender years, its direct written premiums for medical malpractice insurance, as reported in the annual statement filed with the commissioner pursuant to Section 900, is not less than 50 percent of its aggregate direct premiums for all classes of insurance. (j) “Member” means a person who, by the records of the mutual company and by its articles of incorporation or bylaws, is deemed to be a holder of a membership interest in the mutual company. On and after the effective date of a plan of conversion that creates a mutual holding company, the term “member” means a member of a mutual holding company, as provided in Section 4097.12. (k) “Membership interests” means the interests of members arising under this code and the articles of incorporation and bylaws of the mutual company or otherwise by law. Membership interests include the right to vote for directors of the mutual company and the right to vote on any plan of merger, consolidation, reinsurance, or transfer of assets and liabilities of the mutual company. (l) “Mutual company” means, in the case of a plan of conversion, the medical malpractice mutual insurer or mutual holding company that is converting pursuant to the plan. (m) “Mutual holding company” means a corporation organized under the laws of this state subject to the general corporation law as set forth in the Corporations Code. The articles of incorporation of a mutual holding company shall contain provisions stating the following: (1) It is a mutual holding company organized under this article. (2) One purpose of the mutual holding company is to hold not less than 51 percent of the voting stock of a stock holding company, which in turn holds all of the voting stock of a converted insurer. In addition, the mutual holding company shall own not less than 51 percent of the total stockholders’ equity of the stock holding company at all times. (3) It is not authorized to issue voting stock. (4) Its members have the rights specified in Section 4097.12 and in its articles of incorporation and bylaws. (5) Its assets and liabilities are subject to inclusion in the estate of the converted insurer in any proceedings successfully prosecuted against the converted insurer under Article 14 (commencing with Section 1010) or Article 14.3 (commencing with Section 1064.1) of Chapter 1 of Part 2 of Division 1. (n) “Mutual holding company independent director” means a member of the board of directors of the mutual holding company who does not own shares, options, or any other equity interests in the stock holding company. (o) “Mutual insurer” means, in the case of a plan of conversion under this article, the medical malpractice mutual insurer that is converting pursuant to the plan. (p) “Person” means an individual, partnership, firm, association, corporation, joint-stock company, limited liability company, trust, government or governmental agency, state or political subdivision of a state, public or private corporation, board, association, estate, trustee, or fiduciary, or any similar entity. (q) “Plan of conversion” or “plan” means a plan adopted by a mutual company in compliance with this article. (r) “Policy” means an individual or group policy of insurance issued by a mutual insurer or a converted insurer. If a policy takes a form other than an individual form but holders of certificates or other interests under the policy are treated by the mutual insurer as if they were holders of individual policies, the mutual insurer may provide in its plan of conversion under this article that such a certificate or other interest is deemed to be a policy and deem the holder of the certificate or other interest to be an owner of a policy. Such a provision shall be for the sole purpose of determining the rights, if any, of policyholders of the mutual insurer to vote upon and receive consideration under the plan of conversion and shall not affect the other voting rights and qualifications of members of the mutual insurer. (s) “Policyholder” means the holder of a policy other than a reinsurance contract. (t) “Rights in surplus,” for a mutual insurer, means rights of members of the insurer to a return of that portion of the surplus that has not been apportioned or declared by the board of directors for policyholder dividends. “Rights in surplus” includes rights of members of the insurer to a distribution of surplus in liquidation, conservation or demutualization of the insurer under this code, or in a dissolution or winding up. “Rights in surplus,” for a mutual holding company, means rights of members of the company to a return of any surplus that has not been apportioned or declared by its board of directors for member dividends. “Rights in surplus” includes rights of members of the mutual holding company to a distribution of surplus in liquidation, conservation, or demutualization of the insurer under this code, or in a dissolution or winding up. “Rights in surplus” does not include any right expressly conferred solely by the terms of an insurance policy. (u) “Stock holding company” means a corporation authorized to issue one or more classes of capital stock, the corporate purposes of which include holding all of the voting stock in an insurer that has been converted from a mutual insurer to a stock insurer in proceedings under Section 4097.05 in which a mutual holding company is formed. (v) “Voting stock” means securities of any class or any ownership interest having voting power for the election of directors, trustees, or management of a person, other than securities having voting power only because of the occurrence of a contingency. All references to a specified percentage of voting stock of any person mean securities having the specified percentage of the voting power in that person for the election of directors, trustees, or management of that person, other than securities having voting power only because of the occurrence of a contingency. (Added by Stats. 1998, Ch. 421, Sec. 4. Effective January 1, 1999.)
  63. 4097.02.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 10. Conversion of an Incorporated Medical Malpractice Mutual Insurer into an Incorporated Stock Insurer [4097 - 4097.20] ( Article 10 added by Stats. 1998, Ch. 421, Sec. 4. )

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    A mutual insurer conversion plan must include the required amendment proceedings and be approved by the board and members, then submitted to the commissioner with specified supporting documents and filed after consent and approvals.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 10. Conversion of an Incorporated Medical Malpractice Mutual Insurer into an Incorporated Stock Insurer [4097 - 4097.20] ( Article 10 added by Stats. 1998, Ch. 421, Sec. 4. ) ## 4097.02. The plan of conversion shall include appropriate proceedings for amending the mutual company’s articles of incorporation to give effect to the conversion from a nonstock corporation into a stock corporation. The plan shall be: (a) Approved by a resolution of two-thirds of the board of directors. The resolution shall specify the reasons for and the purposes of the proposed conversion of the mutual company and the manner in which the conversion is expected to benefit and serve the best interests of the policyholders, for a mutual insurer, or members, for a mutual holding company. (b) Submitted to the commissioner for consent in writing, subject to the provisions of Section 4097.06, by an application executed by an authorized officer of the mutual company and accompanied by the following documents, or true and correct copies of the documents: (1) The proposed plan of conversion. (2) The proposed articles of incorporation of each corporation that is a constituent corporation of the conversion. (3) The proposed bylaws of each corporation that is a constituent corporation of the conversion. (4) A list of officers and directors, together with their biographies in the form customarily required by the commissioner, of each corporation that is a constituent corporation of the conversion. (5) The resolution of the board of directors of the mutual company, certified by the secretary of the board of directors, authorizing the conversion under this article, and a report of the percentage of directors approving the resolution. (6) Financial statements, which may be prepared on a pro forma basis, in the form required by the commissioner. (7) For a conversion of a mutual insurer, a plan of operations for the converted insurer. (8) A summary of the plan of conversion and drafts of written materials to be mailed to members seeking their approval of the plan. (9) If the plan provides for the establishment of a mutual holding company under Section 4097.05, it shall contain all of the following: (A) An information statement containing, at a minimum, the information required under Section 4097.07. (B) A description of any plans for an initial public offering, including a description of the maximum percentage of stock to be sold, the process to be used in offering the stock and setting the initial sale price for the stock, and how policyholders would be treated in an initial public offering. (C) A description of any plans for the transfer of assets and liabilities, including any subsidiaries, to the mutual holding company. (D) Any final rulings relating to the plan of reorganization obtained from any federal government agency, and all supporting documents submitted to the agency in connection with those rulings. (10) A copy of the proposed form of notice of the special meeting sent to members pursuant to Section 4097.07. (11) Other relevant information that the commissioner may require. (c) Approved by two-thirds of the members of the mutual company voting at a meeting of the members called for that purpose, subject to the provisions of Section 4097.07. (d) Filed in the office of the commissioner after receipt of the commissioner’s consent, and after having been approved as provided in Sections 4097.06 and 4097.07, respectively. (Added by Stats. 1998, Ch. 421, Sec. 4. Effective January 1, 1999.)
  64. 4097.03.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 10. Conversion of an Incorporated Medical Malpractice Mutual Insurer into an Incorporated Stock Insurer [4097 - 4097.20] ( Article 10 added by Stats. 1998, Ch. 421, Sec. 4. )

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    A conversion plan for a medical malpractice mutual insurer must provide for either demutualization or a mutual holding company, depending on which conversion path applies.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 10. Conversion of an Incorporated Medical Malpractice Mutual Insurer into an Incorporated Stock Insurer [4097 - 4097.20] ( Article 10 added by Stats. 1998, Ch. 421, Sec. 4. ) ## 4097.03. For the conversion of a medical malpractice mutual insurer, the plan of conversion shall provide for either a demutualization in compliance with Section 4097.04 or for a mutual holding company in compliance with Section 4097.05. For the conversion of a mutual holding company, the plan of conversion shall provide for demutualization in compliance with Section 4097.04. (Added by Stats. 1998, Ch. 421, Sec. 4. Effective January 1, 1999.)
  65. 4097.04.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 10. Conversion of an Incorporated Medical Malpractice Mutual Insurer into an Incorporated Stock Insurer [4097 - 4097.20] ( Article 10 added by Stats. 1998, Ch. 421, Sec. 4. )

    Verify source ↗

    A demutualization conversion plan must include a commissioner-approved formula for member surplus rights and rules for member stock, cash, or contribution certificate treatment.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 10. Conversion of an Incorporated Medical Malpractice Mutual Insurer into an Incorporated Stock Insurer [4097 - 4097.20] ( Article 10 added by Stats. 1998, Ch. 421, Sec. 4. ) ## 4097.04. For the demutualization of a mutual insurer into a stock insurer or for the demutualization of a mutual holding company into a stock corporation, the plan for conversion shall include the following: (a) A fair, just, and equitable formula, approved by the commissioner, for determining the rights in surplus of each eligible member in the mutual company. The formula shall take account of both the total premiums paid by each eligible member and the duration of his or her membership. The rights in surplus shall be based upon an appraisal of the fair value of the mutual company by one or more qualified disinterested persons appointed by the mutual company with the approval of the commissioner. Those persons shall consider the assets and liabilities of the mutual company and any factors bearing on the value of the mutual company. (b) Each eligible member of the mutual company shall be given a preemptive right to acquire his or her proportionate part of all of the proposed capital stock of the converting mutual company, within a designated reasonable period, by applying upon the purchase of that part the amount of his or her rights in surplus as determined under the formula described in subdivision (a). (c) Each member not applying his or her rights in surplus upon the purchase price of stock shall elect to receive either a cash payment or a certificate of contribution. The cash payment shall not be greater than 50 percent of his or her rights in surplus as determined by the formula in subdivision (a). The certificate of contribution shall be in an amount equal to 100 percent of his or her rights in surplus, as determined by the formula in subdivision (a), shall bear interest at the rate established in Section 10489.4 for minimum standard valuation of all life insurance policies of more than 20 years’ duration issued in the year, and shall be repayable within 10 years or, if necessary under the terms of the plan, later, only on written approval of the commissioner and only out of surplus in excess of an amount established in the plan. Any member not electing to receive cash or purchase stock shall be deemed to have elected to receive a certificate of contribution. The stock purchased, cash payment, or certificate of contribution shall constitute full payment and discharge of the member’s rights in surplus or property interest in the mutual company, and, notwithstanding any other provision of law, the member shall have no other rights with respect thereto. (d) The number of shares to be authorized for the new stock insurer, their par value, and the method for determining the price at which the shares will be offered to eligible members, to the end that the plan, when completed, would satisfy the financial requirements for issuance of a license to transact insurance. (e) Provision for the offering to others of shares not purchased by eligible members within the designated period referred to in subdivision (b) at a price not less than the offering price to members. (Added by Stats. 1998, Ch. 421, Sec. 4. Effective January 1, 1999.)
  66. 4097.05.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 10. Conversion of an Incorporated Medical Malpractice Mutual Insurer into an Incorporated Stock Insurer [4097 - 4097.20] ( Article 10 added by Stats. 1998, Ch. 421, Sec. 4. )

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    A conversion plan for a medical malpractice mutual insurer must include specified conversion steps and ownership transfers.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 10. Conversion of an Incorporated Medical Malpractice Mutual Insurer into an Incorporated Stock Insurer [4097 - 4097.20] ( Article 10 added by Stats. 1998, Ch. 421, Sec. 4. ) ## 4097.05. A plan of conversion adopted by a medical malpractice mutual insurer to establish a mutual holding company shall provide that the medical malpractice mutual insurer will become a stock insurer, that the members of the medical malpractice mutual insurer will become members of a mutual holding company, that the mutual holding company will acquire at least 51 percent of the voting stock of the stock holding company, and that the stock holding company will acquire all of the voting stock of the converted insurer. (Added by Stats. 1998, Ch. 421, Sec. 4. Effective January 1, 1999.)
  67. 4097.06.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 10. Conversion of an Incorporated Medical Malpractice Mutual Insurer into an Incorporated Stock Insurer [4097 - 4097.20] ( Article 10 added by Stats. 1998, Ch. 421, Sec. 4. )

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    The commissioner must examine the conversion plan, hold a public hearing, and consent only if the statutory conditions are met. The mutual insurer and mutual company have related proof and cost responsibilities, and members, their representatives, and the public have a right to appear and comment at the hearing.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 10. Conversion of an Incorporated Medical Malpractice Mutual Insurer into an Incorporated Stock Insurer [4097 - 4097.20] ( Article 10 added by Stats. 1998, Ch. 421, Sec. 4. ) ## 4097.06. (a) The commissioner shall examine the plan submitted pursuant to subdivision (b) of Section 4097.02. If the plan provides for the establishment of a mutual holding company under Section 4097.05, the mutual insurer shall demonstrate that the issuance of stock: (1) Will not require members to pay additional funds to retain their rights in surplus, but nothing herein is intended to prohibit or restrict a mutual insurer that is converting to a stock insurer by establishing a mutual holding company from offering to its members subscription rights that are in addition to the rights in surplus to be held in the mutual holding company. (2) Issued to officers, directors, employees, or employee benefit plans for their benefit, if any, will be fair, just and equitable and not hazardous to policyholders, stockholders, or creditors. (3) Provides sufficient means for the accumulated earnings, cash, and other non-operating assets held by the mutual holding company to inure to the exclusive benefit of its members. (b) As part of the examination the commissioner shall order a public hearing on the plan after written notice of the hearing to the mutual company, its members, and the public. Members of the mutual company, their representatives, and the public shall have the right to appear at the public hearing and to submit written comments to the commissioner. The hearing shall occur before the policyholder vote. The commissioner may require as a condition of consent that the mutual company make modifications of the proposed plan that the commissioner finds necessary for the protection of policyholders. The commissioner shall consent to the plan if he or she finds all of the following: (1) For the conversion of a mutual insurer, the plan is fair, just, and equitable to the insurer and its policyholders. (2) For the conversion of a mutual holding company, the plan is fair, just, and equitable to the company, its members, and the policyholders of the converted insurer. (3) The plan does not violate the law. (4) The converted insurer will, after the conversion, satisfy the requirements for the issuance of a license to write the line or lines of insurance for which it is presently licensed. (c) For the conversion of a mutual company, the commissioner may appoint one or more actuarial, financial, or other consultants, including legal counsel, as the commissioner finds necessary to advise the commissioner in making the determination of whether the proposed plan of conversion meets the applicable requirements of this article. The mutual company is responsible for the reasonable fees and expenses of any actuarial, financial, or other consultants, including legal counsel, appointed, and for the mailing and publication of notices to the mutual company and its members. (Added by Stats. 1998, Ch. 421, Sec. 4. Effective January 1, 1999.)
  68. 4097.07.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 10. Conversion of an Incorporated Medical Malpractice Mutual Insurer into an Incorporated Stock Insurer [4097 - 4097.20] ( Article 10 added by Stats. 1998, Ch. 421, Sec. 4. )

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    The mutual company must have the specified meeting called by certain officers, give eligible members mailed notice at least 45 days ahead, and use ballot voting with a 10% quorum.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 10. Conversion of an Incorporated Medical Malpractice Mutual Insurer into an Incorporated Stock Insurer [4097 - 4097.20] ( Article 10 added by Stats. 1998, Ch. 421, Sec. 4. ) ## 4097.07. The meeting of members prescribed by subdivision (c) of Section 4097.02 shall be called by the board of directors, the chairperson of the board, or the president of the mutual company. Notice of the meeting shall be given to eligible members by mail at least 45 days prior to the date set for the meeting to members of the mutual company of record on the date the plan of conversion was adopted by the board of directors. In the event that a plan of reorganization provides for the establishment of a mutual holding company under Section 4097.05, the notice shall be accompanied by an information statement describing the proposed reorganization. The information statement shall include, at a minimum, the following items: (a) A full copy and a summary of the plan of reorganization. (b) A discussion addressing the reasons and purposes of the proposed restructuring, which shall include a comparison to a demutualization. (c) An analysis of the benefits and risks associated with the proposed reorganization to the mutual company and its policyholders. (d) An explanation of how the restructuring will benefit policyholders, as well as a description of any potential risks to policyholder interests and a description of how the policyholders’ rights differ at the mutual holding company level from those in the existing company. (e) A description of any stock issuance, including any shares or options to be issued to directors, officers, agents, employees, or employee benefit plans, for their benefit, that will be made in conjunction with the plan of conversion, if any, and the guidelines and parameters which shall apply in the event stock is to be issued, including a detailed discussion of subscription rights that are to be granted to policyholders. (f) Any proposed amendments to the mutual insurer’s articles of incorporation to address the restructuring from a mutual to a stock insurer. (g) Any proposed articles and bylaws of the mutual holding company and any other entities to be created in the reorganization. (h) Financial information. (i) Any other information that the commissioner determines is necessary to make a complete and adequate disclosure to policyholders. Voting shall be by ballot, in person or by proxy. A quorum shall consist of 10 percent of the members of the mutual company entitled to vote at the meeting. (Added by Stats. 1998, Ch. 421, Sec. 4. Effective January 1, 1999.)
  69. 4097.08.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 10. Conversion of an Incorporated Medical Malpractice Mutual Insurer into an Incorporated Stock Insurer [4097 - 4097.20] ( Article 10 added by Stats. 1998, Ch. 421, Sec. 4. )

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    This section lets a conversion plan give certain insiders and employee benefit plans the chance to buy stock, and allows customary stock-based plans, but it caps how much they can acquire.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 10. Conversion of an Incorporated Medical Malpractice Mutual Insurer into an Incorporated Stock Insurer [4097 - 4097.20] ( Article 10 added by Stats. 1998, Ch. 421, Sec. 4. ) ## 4097.08. Nothing in this article shall be deemed to prohibit the inclusion in the plan of conversion of provisions under which the insurer’s officers, directors, employees, agents, and employee benefit plans for their benefit may be entitled, in accordance with reasonable classifications of those individuals and employee benefit plans as may be included in the plan, to purchase for cash, at the same price as offered to the public in the initial public offering, voting stock not purchased by members upon exercise of subscription rights. Nothing in this code shall be deemed to prohibit the establishment of stock option, incentive, and share ownership plans customary for publicly traded companies in the same and similar industries. The plan may not permit those persons to acquire any of the following: (a) Greater than 25 percent of the voting stock issued pursuant to the plan for a medical malpractice mutual insurer having assets in excess of two hundred million dollars ($200,000,000) or 35 percent for a medical malpractice mutual insurer having assets of two hundred million dollars ($200,000,000) or less. (b) Greater than 25 percent of the stockholders’ equity for a medical malpractice mutual insurer having assets in excess of two hundred million dollars ($200,000,000) or 35 percent for a medical malpractice mutual insurer having assets of less than two hundred million dollars ($200,000,000). (c) Unexercised options that exceed 20 percent of the number of the issued and outstanding shares. (Added by Stats. 1998, Ch. 421, Sec. 4. Effective January 1, 1999.)
  70. 4097.09.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 10. Conversion of an Incorporated Medical Malpractice Mutual Insurer into an Incorporated Stock Insurer [4097 - 4097.20] ( Article 10 added by Stats. 1998, Ch. 421, Sec. 4. )

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    Directors, officers, agents, and employees of the mutual company may not take fees, commissions, or other valuable consideration for helping the conversion, unless the plan approved by the commissioner allows it.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 10. Conversion of an Incorporated Medical Malpractice Mutual Insurer into an Incorporated Stock Insurer [4097 - 4097.20] ( Article 10 added by Stats. 1998, Ch. 421, Sec. 4. ) ## 4097.09. No director, officer, agent, or employee of the mutual company shall receive any fee, commission, or other valuable consideration whatsoever, other than regular salary and compensation, for in any manner aiding, promoting, or assisting in the conversion except as set forth in the plan approved by the commissioner. This provision shall not be deemed to prohibit the payment of reasonable fees and compensation to attorneys at law, accountants, and actuaries for services performed in the independent practice of their professions, even though they may also be directors of the mutual company. (Added by Stats. 1998, Ch. 421, Sec. 4. Effective January 1, 1999.)
  71. 4097.10.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 10. Conversion of an Incorporated Medical Malpractice Mutual Insurer into an Incorporated Stock Insurer [4097 - 4097.20] ( Article 10 added by Stats. 1998, Ch. 421, Sec. 4. )

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    Before a conversion plan becomes effective, the mutual company may amend or withdraw it with a two-thirds board resolution; any amendment needs the commissioner’s written consent.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 10. Conversion of an Incorporated Medical Malpractice Mutual Insurer into an Incorporated Stock Insurer [4097 - 4097.20] ( Article 10 added by Stats. 1998, Ch. 421, Sec. 4. ) ## 4097.10. At any time before that plan of conversion becomes effective as provided in Section 4097.11, the mutual company may, by resolution of at least two-thirds of the board of directors, amend the plan of conversion or withdraw the plan of conversion. Any plan amendment shall require the written consent of the commissioner. For a plan amendment, all references in this article to the plan of conversion shall be deemed to refer to the plan as amended, but no amendment shall be deemed to change the adoption date of the plan of conversion. No amendment may change the plan of conversion in a manner that the commissioner determines is materially disadvantageous to policyholders of the mutual insurer or members of the mutual holding company, unless a further public hearing is held on the plan as amended, if the amendment is made after the initial public hearing, or if the plan as amended is submitted for reconsideration by the members if the amendment is made after the plan has been approved by the members. (Added by Stats. 1998, Ch. 421, Sec. 4. Effective January 1, 1999.)
  72. 4097.11.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 10. Conversion of an Incorporated Medical Malpractice Mutual Insurer into an Incorporated Stock Insurer [4097 - 4097.20] ( Article 10 added by Stats. 1998, Ch. 421, Sec. 4. )

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    This section sets out how a mutual insurer conversion is completed, including required filings, issuance of authority, and the conversion’s legal effects.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 10. Conversion of an Incorporated Medical Malpractice Mutual Insurer into an Incorporated Stock Insurer [4097 - 4097.20] ( Article 10 added by Stats. 1998, Ch. 421, Sec. 4. ) ## 4097.11. (a) Upon consent by the commissioner to the plan of conversion of a mutual insurer and filing of the plan of conversion in accordance with the provisions of this article, the commissioner shall issue a new certificate of authority to the converted insurer. Upon issuance of the certificate of authority to a mutual insurer and subject to subdivision (a) of Section 110 of the Corporations Code, the Secretary of State shall accept for filing the articles of incorporation, certificate of amendment of articles of incorporation, or agreement of merger and officers’ certificates of the converted insurer for the conversion of a mutual insurer. For a plan of conversion that provides for the establishment of a mutual holding company in accordance with Section 4097.05, the Secretary of State shall accept for filing the articles of incorporation of the mutual holding company and the stock holding company. Upon consent to the plan of conversion of a mutual holding company and filing of the plan of conversion in accordance with the provisions of this article, the Secretary of State shall accept for filing the articles of incorporation or certificate of amendment of articles of incorporation of the converted mutual holding company. The plan is effective upon the filing of the articles of incorporation or certificate of amendment of articles of incorporation. (b) Upon the effective date of the plan of conversion of a mutual insurer, the mutual insurer shall immediately become a stock corporation. The converted insurer shall be a continuation of the original mutual insurer, and the conversion shall in no way annul, modify, or change any of the original mutual insurer’s existing suits, rights, contracts, or liabilities except as provided in the approved conversion plan. The insurer, after conversion, shall exercise all the rights and powers and perform all the duties conferred or imposed by law upon insurers writing the classes of insurance written by it, and shall retain the rights and contracts existing prior to conversion, subject to the effect of the plan. (c) Upon the effective date of the plan of conversion of a mutual holding company, all membership interests and rights in surplus are extinguished, members eligible to receive consideration under the plan of conversion are entitled to receive the consideration in exchange for their membership interests and liquidation of their rights in surplus, and the plan otherwise becomes effective in accordance with its terms. The conversion in no way annuls, modifies, or changes any of the converting mutual holding company’s existing suits, rights, contracts, or liabilities, except as provided in the approved plan of conversion. (Added by Stats. 1998, Ch. 421, Sec. 4. Effective January 1, 1999.)
  73. 4097.12.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 10. Conversion of an Incorporated Medical Malpractice Mutual Insurer into an Incorporated Stock Insurer [4097 - 4097.20] ( Article 10 added by Stats. 1998, Ch. 421, Sec. 4. )

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    This section governs conversion to a stock insurer and sets ownership, voting, notice, director-composition, and approval rules for the mutual holding company system.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 10. Conversion of an Incorporated Medical Malpractice Mutual Insurer into an Incorporated Stock Insurer [4097 - 4097.20] ( Article 10 added by Stats. 1998, Ch. 421, Sec. 4. ) ## 4097.12. (a) Upon the effective date of a plan of conversion in accordance with Section 4097.05, the mutual insurer immediately becomes a stock corporation, the membership interests and rights in surplus of its members are extinguished, the members of the mutual insurer immediately become members of the mutual holding company and are granted rights in surplus in the mutual holding company equivalent to those rights in surplus previously held in the converted company, all of the voting stock initially issued by the converted insurer is owned by the stock holding company, and all of the voting stock initially issued by the stock holding company is owned by the mutual holding company. Except for the membership interests in the mutual insurer, which become membership interests in the mutual holding company, nothing herein is intended to, nor shall eliminate, curtail or otherwise diminish the contract rights of policyholders of a converted company. The stock holding company may thereafter, subject to compliance with Article 8 (commencing with Section 820) of Chapter 1 of Part 2 of Division 1, issue securities to other persons. After the effective date, owners of policies that are issued by a stock insurer that has been converted from a mutual insurer pursuant to proceedings under this article shall become members of the mutual holding company immediately upon issuance of the policies, except that owners of a reporting endorsements issued by the insurer that provide strictly tail coverage on expired claims made policies shall not be members of the mutual holding company. Any person may be a member of a mutual holding company. (b) From the effective date, the mutual holding company shall hold at least 51 percent of the issued and outstanding voting stock of the stock holding company and the stock holding company thereafter shall at all times hold all of the issued and outstanding voting stock of the converted insurer. The stock holding company may issue additional voting stock, and securities convertible into voting stock, to the mutual holding company and to other persons if, in the aggregate, the voting stock of the stock holding company held by the mutual holding company is not less than 51 percent of the issued and outstanding voting stock of the stock holding company. For purposes of the 51 percent limitation, any issued and outstanding securities of the stock holding company that are convertible into voting stock are considered issued and outstanding voting stock. (c) From the effective date, the mutual holding company’s equity interest in the stock holding company shall not be less than 51 percent of the total stockholders’ equity in the stock holding company. For purposes of the 51 percent limitation, any issued and outstanding securities of the stock holding company that are convertible into equity securities, whether voting or nonvoting, shall be considered stockholders’ equity. Debt securities that include a default contingency conversion interest shall not be considered stockholders’ equity for compliance with the foregoing limitation. (d) The commissioner shall retain jurisdiction over the mutual holding company pursuant to this article. For purposes of Section 1215.5, the mutual holding company shall be considered as if it were an insurance company. The commissioner shall also retain jurisdiction over the issuance of debt securities by the mutual holding company in accordance with the protections provided in Article 8 (commencing with Section 820) of Chapter 1 of Part 2 of Division 1. (e) If any proceedings under Article 14 (commencing with Section 1010), Article 14.3 (commencing with Section 1064.1), Article 14.5 (commencing with Section 1065.1), or Article 15.5 (commencing with Section 1077), of Chapter 1 of Part 2 of Division 1, are brought naming as a party a stock insurer created as a result of proceedings authorized by this article, the mutual holding company formed as part of the conversion automatically becomes a party to the proceedings. All of the assets of the mutual holding company, including, but not limited to, its interest in the stock holding company formed pursuant to this article, are deemed assets of the estate of the stock insurer to the extent necessary to satisfy claims of persons against the stock insurer who have claims falling within the priorities established in paragraphs (1) to (5), inclusive, of subdivision (a) of Section 1033. Claims of persons in their capacity as members of the mutual holding company shall be claims falling within the priority established in paragraph (6) of subdivision (a) of Section 1033. A mutual holding company may not dissolve, liquidate, or wind up and dissolve without the prior written approval of the commissioner or the court pursuant to proceedings brought pursuant to Article 15 (commencing with Section 1070) of Chapter 1 of Part 2 of Division 1. (f) Except as provided in this code, a mutual holding company is subject to the provisions of the general corporation law in like manner with other corporations. However, provisions of that law referring to shareholders or members shall be applied as though those provisions referred to the members of a mutual holding company. With respect to the management, records, and affairs of a mutual holding company and except as otherwise provided in this chapter, a member of a mutual holding company has the same character of rights and relationship as a stockholder has toward a domestic stock insurer subject to the provisions of this code. (g) Each member of a mutual holding company is entitled to one vote on each matter coming to a vote at any meeting of members, regardless of the number of policies that the member holds. (h) Notice of all meetings of members of the mutual holding company, whether annual or special, shall be given in writing to the members entitled to vote. The notice shall be given by the secretary, assistant secretary, or other persons charged with that duty. If there is no officer so charged, or if he or she neglects or refuses this duty, notice may be given by any director. At the option of the converted insurer, the notice may be imprinted on premium notices or receipts or on both. A notice may be given to any member either personally, or by mail, or other means of written communication, charges prepaid, addressed to the member at his or her address appearing on the books of the insurer, or given by the member to the converted insurer for the purpose of notice. If a member gives no address, and if there is no address on the books of the insurer, notice shall be deemed to have been given the member if sent by mail or other means of written communication addressed to the place where the principal office of the converted insurer is situated, or if published at least once in a newspaper of general circulation in the county in which the office is located and in the newspaper that has the largest daily circulation in this state. Notice of any meeting of members shall be sent to each member entitled to notice not less than 14 days before a meeting. Notice of any meeting of members shall specify the place, the day, and the hour of the meeting and the general nature of the business to be transacted. For any member who gives no address and has no address on the books of the insurer, notice of an annual meeting to be held at the time and place specified is deemed adequate if published at least once in each of four successive weeks in a newspaper of general circulation in the county in which the principal office of the converted insurer is located and in the newspaper that has the largest daily circulation in this state. If the notice is so published, no other notice of the meeting is required. (i) The presence in person or by proxy of 5 percent of the members of a mutual holding company entitled to vote at any meeting constitutes a quorum for the transaction of all business of the mutual holding company, including, but not limited to, the amendment of the articles of incorporation or bylaws of the mutual holding company. (j) Any required member approval shall be by the affirmative vote of a majority of the members who vote, or a higher percentage of the members as may be required by law or the articles of incorporation, a quorum being present. (k) The board of the mutual holding company shall be comprised of not less than 6 nor more than 18 directors. A majority of the mutual holding company directors shall be policyholders of the converted insurer. Unless the plan provides that at least a majority of the directors of the boards of the stock holding company and the converted insurer are also directors of the mutual holding company, the commissioner shall determine whether the proposed composition of the boards of directors of each of the constituent corporations of the mutual holding company system, as provided in the articles of incorporation and bylaws, facilitate the control of the converted insurer by the mutual holding company. No term shall continue longer than six years. In the absence of such provisions, each director shall be elected for a term of one year. All directors shall hold office for the term for which they are elected and until their successors are elected and qualified. The bylaws of the mutual holding company shall set forth a procedure for establishing mutual holding company independent directors in the event that the stock holding company issues securities. Not less than one of every six directors of the mutual holding company shall be so designated. A director may, but need not, be a member of the mutual holding company of which he or she is acting as director. Vacancies in the board of directors may be filled by a majority of the remaining directors, though less than a quorum. Each director so elected shall hold office until the next annual meeting. (l) Membership interests in a mutual holding company are exempt from Article 8 (commencing with Section 820) of Chapter 1 of Part 2 of Division 1. A description of the membership interests and related factual disclosure shall not be considered to be an inducement to buy insurance in violation of Section 10430. Any promise of returns, profits, or distributions, or representations with regard to the benefits of membership, made as an inducement in connection with the issuance and delivery of a policy is subject to Section 10430 and the remedy provided in Section 10433. (Added by Stats. 1998, Ch. 421, Sec. 4. Effective January 1, 1999.)
  74. 4097.13.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 10. Conversion of an Incorporated Medical Malpractice Mutual Insurer into an Incorporated Stock Insurer [4097 - 4097.20] ( Article 10 added by Stats. 1998, Ch. 421, Sec. 4. )

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    For five years around a conversion, no one acting together may buy or try to buy 5% or more of the voting securities of the converted insurer, or its controlling person, without the commissioner’s prior consent.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 10. Conversion of an Incorporated Medical Malpractice Mutual Insurer into an Incorporated Stock Insurer [4097 - 4097.20] ( Article 10 added by Stats. 1998, Ch. 421, Sec. 4. ) ## 4097.13. (a) Prior to, and for a period of five years following, the effective date of the plan of conversion, no person or group of persons acting in concert shall directly or indirectly offer to acquire or acquire in any manner the beneficial ownership of 5 percent or more of any class of voting securities of a converted insurer or of a person that controls, as defined by subdivision (c) of Section 1215, the converted insurer, without the prior consent of the commissioner. Any application for that approval shall contain information as the commissioner may require and shall be accompanied by a filing fee in an amount equal to the filing fee specified in Section 1215.2. (b) In the event of any violation of this section, or of any action that, if consummated, would constitute a violation, all voting securities of the converted insurer or of the person acquired by any person in excess of the maximum amount permitted to be acquired by the person pursuant to this subdivision shall be deemed to be nonvoting securities of the converted insurer or of that person. The violation or action may be enforced or enjoined by an appropriate proceeding commenced by the converted insurer, a person, the commissioner, any policyholder or stockholder of the converted insurer, or the person on behalf of the converted insurer or the person in the superior court in the judicial district in which the converted insurer has its home office or in any other court having jurisdiction. The court may issue any order it finds necessary to cure the violation or to prevent the proposed action. In addition to the foregoing, whenever it appears to the commissioner that any person has committed a violation of this section, the commissioner may proceed as provided in Article 14 (commencing with Section 1010) of Chapter 1 of Part 2 of Division 1 to take possession of the property of the converted insurer and to conduct the business thereof. (c) For the purposes of this section, “beneficial ownership,” with respect to voting securities, means the sole or shared power to vote, or direct the voting of, voting securities or the sole or shared power to dispose, or direct the disposition, of voting securities. (d) For the purposes of this section, “voting security” includes voting stock as defined in Section 4097.01, any preorganization certificate or subscription, including subscription rights issued pursuant to a plan of conversion, or any security convertible, with or without consideration, into voting security, or carrying any warrant or right to subscribe for, or purchase any, voting security, or any such warrant or right. (e) For the purposes of this section, “offer” includes an offer to buy or acquire, solicitation of an offer to sell, tender offer for, or request or invitation for tenders of a security or interest in a security for value. (Amended by Stats. 2017, Ch. 417, Sec. 22. (AB 1696) Effective January 1, 2018.)
  75. 4097.14.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 10. Conversion of an Incorporated Medical Malpractice Mutual Insurer into an Incorporated Stock Insurer [4097 - 4097.20] ( Article 10 added by Stats. 1998, Ch. 421, Sec. 4. )

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    Unless the conversion plan says otherwise, the mutual company’s directors and officers must continue serving the converted company until new directors and officers are elected and qualified.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 10. Conversion of an Incorporated Medical Malpractice Mutual Insurer into an Incorporated Stock Insurer [4097 - 4097.20] ( Article 10 added by Stats. 1998, Ch. 421, Sec. 4. ) ## 4097.14. Unless otherwise provided in the plan of conversion, the directors and officers of the mutual company shall serve as directors and officers of the converted company until new directors and officers have been duly elected and qualified pursuant to the articles of incorporation and bylaws of the stock company. (Added by Stats. 1998, Ch. 421, Sec. 4. Effective January 1, 1999.)
  76. 4097.15.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 10. Conversion of an Incorporated Medical Malpractice Mutual Insurer into an Incorporated Stock Insurer [4097 - 4097.20] ( Article 10 added by Stats. 1998, Ch. 421, Sec. 4. )

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    This section sets deadlines for lawsuits and judicial review involving conversion plans and plan amendments.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 10. Conversion of an Incorporated Medical Malpractice Mutual Insurer into an Incorporated Stock Insurer [4097 - 4097.20] ( Article 10 added by Stats. 1998, Ch. 421, Sec. 4. ) ## 4097.15. (a) Notwithstanding any other provision of law and except as otherwise provided in subdivision (b), actions concerning any plan of conversion, proposed plan of conversion, plan amendment, or proposed plan amendment under this article or any acts taken or proposed to be taken under this article shall be commenced within one year after the plan of conversion or plan amendment is filed in the office of the commissioner pursuant to subdivision (d) of Section 4097.02 or subdivision (a) of Section 4098.1, or six months from the effective date of the plan of conversion, whichever is later. If the plan of conversion is withdrawn, the actions or acts shall be commenced within six months from the date the board of directors approves a resolution to withdraw the plan. If an action concerns or arises out of a plan amendment or proposed plan amendment made under Section 4097.18, the applicable time period is measured from the filing, effective date, or approval of withdrawal of the plan amendment, whichever is later. (b) Judicial review of any act of the commissioner or any other governmental body or officer concerning or arising out of any plan of conversion, proposed plan of conversion, plan amendment, or proposed plan amendment under this article may only be had by filing a petition for a writ of mandate within 30 days of the date of the act. However, any petition seeking judicial review shall be filed no later than 30 days from the effective date of the plan of conversion or plan amendment, whichever is the subject of the petition. (Added by Stats. 1998, Ch. 421, Sec. 4. Effective January 1, 1999.)
  77. 4097.16.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 10. Conversion of an Incorporated Medical Malpractice Mutual Insurer into an Incorporated Stock Insurer [4097 - 4097.20] ( Article 10 added by Stats. 1998, Ch. 421, Sec. 4. )

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    Securities issued under an approved conversion plan are exempt from Article 8 in Division 1, Part 2, Chapter 1.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 10. Conversion of an Incorporated Medical Malpractice Mutual Insurer into an Incorporated Stock Insurer [4097 - 4097.20] ( Article 10 added by Stats. 1998, Ch. 421, Sec. 4. ) ## 4097.16. The offer or sale of securities, including any debt securities, issued pursuant to the plan of conversion developed and approved in accordance with the provisions of this article, shall be exempt from Article 8 (commencing with Section 820) of Chapter 1 of Part 2 of Division 1. (Added by Stats. 1998, Ch. 421, Sec. 4. Effective January 1, 1999.)
  78. 4097.17.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 10. Conversion of an Incorporated Medical Malpractice Mutual Insurer into an Incorporated Stock Insurer [4097 - 4097.20] ( Article 10 added by Stats. 1998, Ch. 421, Sec. 4. )

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    The commissioner may make, amend, and rescind rules and regulations needed to carry out this article, and may charge the insurer for certain state expenses.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 10. Conversion of an Incorporated Medical Malpractice Mutual Insurer into an Incorporated Stock Insurer [4097 - 4097.20] ( Article 10 added by Stats. 1998, Ch. 421, Sec. 4. ) ## 4097.17. The commissioner shall have the authority from time to time, to make, amend, and rescind any rules and regulations as may be necessary to carry out the provisions of this article. The commissioner shall also have the authority to charge and collect from the insurer for the actual amount of expenses reasonably incurred by the state in discharge of the commissioner’s duties hereunder. (Added by Stats. 1998, Ch. 421, Sec. 4. Effective January 1, 1999.)
  79. 4097.18.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 10. Conversion of an Incorporated Medical Malpractice Mutual Insurer into an Incorporated Stock Insurer [4097 - 4097.20] ( Article 10 added by Stats. 1998, Ch. 421, Sec. 4. )

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    After conversion is completed and the certificate of authority under Section 4097.11 is issued, the Secretary of State must file a verified copy of the amended articles of incorporation.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 10. Conversion of an Incorporated Medical Malpractice Mutual Insurer into an Incorporated Stock Insurer [4097 - 4097.20] ( Article 10 added by Stats. 1998, Ch. 421, Sec. 4. ) ## 4097.18. Upon completion of the act of conversion and issuance of the certificate of authority under Section 4097.11, the Secretary of State shall accept for filing a verified copy of the amended articles of incorporation. (Added by Stats. 1998, Ch. 421, Sec. 4. Effective January 1, 1999.)
  80. 4097.19.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 10. Conversion of an Incorporated Medical Malpractice Mutual Insurer into an Incorporated Stock Insurer [4097 - 4097.20] ( Article 10 added by Stats. 1998, Ch. 421, Sec. 4. )

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    A converted insurance company may amend its plan amendment only after the required board, commissioner, and member approvals, and the amendment becomes effective only when filed with the Secretary of State.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 10. Conversion of an Incorporated Medical Malpractice Mutual Insurer into an Incorporated Stock Insurer [4097 - 4097.20] ( Article 10 added by Stats. 1998, Ch. 421, Sec. 4. ) ## 4097.19. (a) The amended articles of incorporation of a converted company that have been adopted pursuant to a plan of conversion and filed with the Secretary of State in accordance with Section 4097.11 may be further amended after the effective date pursuant to applicable law. The plan of conversion may be amended in other respects after the effective date of the plan as specified in this section. The amendment shall take effect upon filing with the Secretary of State after compliance with the following: (1) Approval by a resolution of at least two-thirds of the board of directors of the converted company. The resolution shall specify the reasons for and the purposes of the proposed amendment. (2) Submission to the commissioner for consent in writing, subject to the provisions of Section 4097.06. (3) For the conversion of a mutual insurer, approval by at least two-thirds of those current policyholders of the corporation who were members of the former mutual insurer and were entitled to vote on the original plan of conversion approved pursuant to subdivision (c) of Section 4097.02 and who vote at a meeting called for that purpose. (4) For the demutualization of a mutual holding company, approval by at least two-thirds of those current members of the corporation who were members of the former mutual holding company and were entitled to vote on the original plan of conversion approved pursuant to subdivision (c) of Section 4097.02 and who vote at a meeting called for that purpose. (5) Filed in the office of the commissioner after having been consented to and approved as contemplated by paragraphs (2), (3), and (4). (b) If an amendment proposed under subdivision (a) would adversely affect the rights of one or more classes of members, but not all those members, then only the members of each class whose rights would be adversely affected by the proposed amendment are entitled to vote on the proposed plan amendment. (c) A policyholder or member meeting prescribed by paragraph (3) or (4) of subdivision (a) shall be called by the board of directors, the chairperson of the board, or the president of the converted company. Notice of the meeting shall be given to policyholders or members entitled to vote at the meeting by mail at least 45 days prior to the date set for the meeting. Voting shall be by ballot, in person, or by proxy. A quorum consists of 10 percent of the policyholders or members of the converted company entitled to vote at the meeting. (d) At any time before the plan amendment becomes effective, the converted company may, by resolution of two-thirds of the board of directors, amend the plan amendment or withdraw its plan amendment. For an amendment to a plan amendment, all references in this section to the plan amendment shall be deemed to refer to the plan amendment as amended. Any amendment of the plan amendment shall require the written consent of the commissioner. No amendment shall be deemed to change the date of adoption of the plan amendment. No amendment made after approval by the policyholders or members as provided in paragraph (3) or (4) of subdivision (a) may change the plan amendment in a manner that the commissioner determines is materially disadvantageous to any of the affected policyholders or members unless the plan amendment as amended is submitted for reconsideration under the procedures prescribed for the original plan amendment policyholder or member approval. (Added by Stats. 1998, Ch. 421, Sec. 4. Effective January 1, 1999.)
  81. 4097.20.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 10. Conversion of an Incorporated Medical Malpractice Mutual Insurer into an Incorporated Stock Insurer [4097 - 4097.20] ( Article 10 added by Stats. 1998, Ch. 421, Sec. 4. )

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    A mutual insurer converting to a stock insurer may keep using “mutual” in its name if the name also identifies it as a stock insurer and the commissioner finds the name is not likely to mislead or deceive the public.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. General Mutual Insurers [4010 - 4097.20] ( Chapter 4 added by Stats. 1963, Ch. 1772. ) ## ARTICLE 10. Conversion of an Incorporated Medical Malpractice Mutual Insurer into an Incorporated Stock Insurer [4097 - 4097.20] ( Article 10 added by Stats. 1998, Ch. 421, Sec. 4. ) ## 4097.20. If the name of a mutual insurer converting to a stock insurer pursuant to this article includes the word “mutual,” the new stock insurer may continue to use the word “mutual” in its name if the name includes a word or words that identify the new stock insurer as a stock insurer and the commissioner finds that the continued use of the word “mutual” in its name is not likely to mislead or deceive the public. (Added by Stats. 1998, Ch. 421, Sec. 4. Effective January 1, 1999.)
  82. 41.

    ## Insurance Code - INS ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1935, Ch. 145. )

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    All insurance in this State is governed by this code.

    ## Insurance Code - INS ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1935, Ch. 145. ) ## 41. All insurance in this State is governed by the provisions of this code. (Enacted by Stats. 1935, Ch. 145.)
  83. 410.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Types of Policies [410 - 413] ( Article 2 enacted by Stats. 1935, Ch. 145. )

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    A policy is either open or valued.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Types of Policies [410 - 413] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 410. A policy is either open or valued. (Enacted by Stats. 1935, Ch. 145.)
  84. 411.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Types of Policies [410 - 413] ( Article 2 enacted by Stats. 1935, Ch. 145. )

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    An open policy is one where the subject matter’s value is not agreed in advance and is determined later if there is a loss.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Types of Policies [410 - 413] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 411. An open policy is one in which the value of the subject matter is not agreed upon, but is left to be ascertained in case of loss. (Enacted by Stats. 1935, Ch. 145.)
  85. 412.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Types of Policies [410 - 413] ( Article 2 enacted by Stats. 1935, Ch. 145. )

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    A valued insurance policy is one that states on its face that the insured item will be valued at a specified amount.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Types of Policies [410 - 413] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 412. A valued policy is one which expresses on its face an agreement that the thing insured shall be valued at a specified sum. (Enacted by Stats. 1935, Ch. 145.)
  86. 413.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Types of Policies [410 - 413] ( Article 2 enacted by Stats. 1935, Ch. 145. )

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    A running policy is a policy for successive insurances that can be updated from time to time by additional statements or indorsements.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Types of Policies [410 - 413] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 413. A running policy is one which contemplates successive insurances, and which provides that the object of the policy may be from time to time defined, especially as to the subjects of insurance, by additional statements or indorsements. (Enacted by Stats. 1935, Ch. 145.)
  87. 42.

    ## Insurance Code - INS ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1935, Ch. 145. )

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    A licensed or certificated person may not call coverage a group coverage or group policy unless the policy is defined as group insurance under this code or the issuing state’s laws.

    ## Insurance Code - INS ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1935, Ch. 145. ) ## 42. The designation of insurance coverage as “group” in any code or law of this state other than this code does not authorize its representation as a group coverage or as a group policy, certificate, or contract by any person licensed or certificated by the commissioner unless the policy providing the coverage is defined as group insurance by a specific provision of this code or of the laws of the state in which the policy, certificate, or contract is issued. This section shall apply only to life, disability, and workers’ compensation insurance. (Amended by Stats. 2018, Ch. 231, Sec. 1. (AB 2045) Effective January 1, 2019.)
  88. 430.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Insurer’s Name on Policy [430- 430.] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    Every insurer must put its own name, or a commissioner-approved name, on each policy in large bold type.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Insurer’s Name on Policy [430- 430.] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 430. The policies issued by every insurer shall be entitled by its own name or a name approved by the commissioner under Section 881 or 882, printed on each policy in large bold type in at least as large as any other size type used in the policy or on the face page. (Amended by Stats. 1979, Ch. 737.)
  89. 44.

    ## Insurance Code - INS ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1935, Ch. 145. )

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    A person who willfully and knowingly spreads a false written or printed statement to harm an insurance company’s financial condition or stability commits a misdemeanor and may be fined up to $1,000.

    ## Insurance Code - INS ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1935, Ch. 145. ) ## 44. Any person who willfully and knowingly makes, circulates, or transmits to another any false written or printed statement for the purpose of damaging the financial condition or stability of any insurance company doing business in this state is guilty of a misdemeanor punishable by a fine of not more than one thousand dollars ($1,000). (Added by Stats. 1969, Ch. 839.)
  90. 440.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Warranties [440 - 449] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    A warranty is either express or implied.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Warranties [440 - 449] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 440. A warranty is either express or implied. (Enacted by Stats. 1935, Ch. 145.)
  91. 441.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Warranties [440 - 449] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    A factual statement in a policy about the insured person or thing, or the risk, counts as an express warranty.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Warranties [440 - 449] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 441. A statement in a policy of a matter relating to the person or thing insured, or to the risk, as a fact, is an express warranty thereof. (Enacted by Stats. 1935, Ch. 145.)
  92. 442.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Warranties [440 - 449] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    An insurance warranty can be created without using any particular wording.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Warranties [440 - 449] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 442. A particular form of words is not necessary to create a warranty. (Enacted by Stats. 1935, Ch. 145.)
  93. 443.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Warranties [440 - 449] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    An express warranty made before or when a policy is executed must be included in the policy or in another signed instrument referred to in the policy.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Warranties [440 - 449] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 443. Every express warranty made at or before the execution of a policy shall be contained in the policy itself, or in another instrument signed by the insured and referred to in the policy, as making a part of it. (Enacted by Stats. 1935, Ch. 145.)
  94. 444.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Warranties [440 - 449] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    A warranty can concern the past, the present, the future, or any combination of them.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Warranties [440 - 449] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 444. A warranty may relate to the past, the present, the future, or to any or all of these. (Enacted by Stats. 1935, Ch. 145.)
  95. 445.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Warranties [440 - 449] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    A policy statement about an intended act or omission that materially affects risk is treated as a warranty.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Warranties [440 - 449] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 445. A statement in a policy, which imports that there is an intention to do or not to do a thing which materially affects the risk, is a warranty that such act or omission will take place. (Enacted by Stats. 1935, Ch. 145.)
  96. 446.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Warranties [440 - 449] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    If a future warranty cannot be performed because a covered loss happens, performance becomes unlawful where the contract is made, or performance becomes impossible, failing to perform it does not avoid the policy.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Warranties [440 - 449] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 446. When, before the time arrives for the performance of a warranty relating to the future, a loss insured against happens, or performance becomes unlawful at the place of the contract, or impossible, the omission to fulfill the warranty does not avoid the policy. (Enacted by Stats. 1935, Ch. 145.)
  97. 447.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Warranties [440 - 449] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    If a material warranty or other material policy provision is violated by either party, the other party may rescind.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Warranties [440 - 449] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 447. The violation of a material warranty or other material provision of a policy, on the part of either party thereto, entitles the other to rescind. (Enacted by Stats. 1935, Ch. 145.)
  98. 448.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Warranties [440 - 449] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    An immaterial breach does not avoid the insurance policy unless the policy says that violating specified provisions will avoid it.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Warranties [440 - 449] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 448. Unless the policy declares that a violation of specified provisions thereof shall avoid it, the breach of an immaterial provision does not avoid the policy. (Enacted by Stats. 1935, Ch. 145.)
  99. 449.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Warranties [440 - 449] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    If a warranty is breached without fraud, the insurer is exonerated from that time; if the warranty was broken at the start, the policy does not attach to the risk.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Warranties [440 - 449] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 449. A breach of warranty without fraud merely exonerates an insurer from the time that it occurs, or where the warranty is broken in its inception, prevents the policy from attaching to the risk. (Enacted by Stats. 1935, Ch. 145.)
  100. 45.

    ## Insurance Code - INS ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1935, Ch. 145. )

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    This section defines electronic funds transfer and related payment methods, and says insurer payments may use specified electronic channels subject to stated conditions.

    ## Insurance Code - INS ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1935, Ch. 145. ) ## 45. (a) “Electronic funds transfer” means any transfer of funds, other than a transaction originated by check, draft, or similar paper instrument, that is initiated through an electronic terminal, telephonic instrument, or computer or magnetic tape, so as to order, instruct, or authorize a financial institution to debit or credit an account. Electronic funds transfer shall be accomplished by an automated clearinghouse debit, an automated clearinghouse credit, a Federal Reserve Wire Transfer (Fedwire), or an international funds transfer, at the option of the insurer. (b) For purposes of this section: (1) “Automated clearinghouse” means any federal reserve bank, or an organization established by agreement with the National Automated Clearing House Association, that operates as a clearinghouse for transmitting or receiving entries between banks or bank accounts and that authorizes an electronic transfer of funds between those banks or bank accounts. (2) “Automated clearinghouse debit” means a transaction in which any department of the state, through its designated depository bank, originates an automated clearinghouse transaction debiting the taxpayer’s bank account and crediting the state’s bank account for the amount of tax. Banking costs incurred for the automated clearinghouse debit transaction by the taxpayer shall be paid by the state. (3) “Automated clearinghouse credit” means an automated clearinghouse transaction in which the taxpayer, through its own bank, originates an entry crediting the state’s bank account and debiting its own bank account. Banking costs incurred by the state for the automated clearinghouse credit transaction may be charged to the taxpayer. (4) “Fedwire” means any transaction originated by the taxpayer and utilizing the national electronic payment system to transfer funds through federal reserve banks, pursuant to which the taxpayer debits its own bank account and credits the state’s bank account. Electronic funds transfers may be made by Fedwire only if prior approval is obtained from the department and the taxpayer is unable, for reasonable cause, to make payments pursuant to paragraph (2) or (3). Banking costs charged to the taxpayer and to the state may be charged to the taxpayer. (5) “International funds transfer” means any transaction originated by the taxpayer and utilizing “SWIFT,” the international electronic payment system to transfer funds in which the taxpayer debits its own bank account, and credits the funds to a United States bank that credits the state’s bank account. Banking costs charged to the taxpayer and to the state may be charged to the taxpayer. (Added by Stats. 1993, Ch. 661, Sec. 1. Effective January 1, 1994.)
  101. 46.

    ## Insurance Code - INS ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1935, Ch. 145. )

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    The Legislature states that “workmen’s compensation” should also be called “workers’ compensation.”

    ## Insurance Code - INS ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1935, Ch. 145. ) ## 46. The Legislature hereby declares its intent that the term “workmen’s compensation” shall hereafter also be known as “workers’ compensation.” In furtherance of this policy it is the desire of the Legislature that references to the term “workmen’s compensation” in this code be changed to “workers’ compensation” when such code sections are being amended for any purpose. This act is declaratory and not amendatory of existing law. (Added by Stats. 1974, Ch. 1454.)
  102. 460.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Inception Hours [460- 460.] ( Article 5 added by Stats. 1967, Ch. 1002. )

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    Insurance forms must state a 12:01 a.m. inception hour for coverage, with listed exceptions and limited flexibility for binders and extended coverage forms.

    ## 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 4. The Policy [380 - 460] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Inception Hours [460- 460.] ( Article 5 added by Stats. 1967, Ch. 1002. ) ## 460. On and after January 1, 1972, every printed form of an insurance contract, including every policy, endorsement, rider, or any amendment thereof issued in this state by any insurer or issued for delivery in this state by any insurer shall state an inception hour for coverage of 12:01 a.m. of the date upon which it is to be dated. However, the contract may provide that the inception time shall not be prior to the time applied for. Unless a specific provision of this code otherwise prescribes or permits, the hour prescribed shall be standard time at the residence within this state, or the principal place of business within this state, of the insured. This section shall not prohibit an insurer, directly or through an agent, from issuing a binder, whether it be oral or typed by insertions in blanks in a printed form, specifying an inception or termination hour other than 12:01 a.m. on the date upon which the coverage is to commence, or end, as specified in the standard form or forms issued as the normal policy. Such binder shall not be subject to Section 382 nor have the technical meaning therein ascribed to “covering notes.” This section shall not prohibit an insurer from issuing any policy or contract on a normal printed form which contains a provision extending the period of coverage for either 12 hours preceding, or following, the effective hour otherwise required by this section. This section shall not apply to: (1) Life insurance as defined in Section 101 or such supplemental disability insurance as is defined in Sections 10271 and 10292. (2) Marine insurance as defined in Section 103. (3) Title insurance as defined in Section 104. (4) Mortgage insurance as defined in Section 107. (5) Mortgage guarantee insurance as defined in Section 119. (6) Surety insurance, as defined in Section 105, or disability insurance, as defined in Section 106, unless, until, and to the extent following: The commissioner, on or after the effective date of the amendment of this section at the 1969 Regular Session of the Legislature, from time to time, as to specific types, classes, or categories of such insurance, declares, by rules and regulations promulgated as provided by law, that this section shall apply. Such rules or regulations shall provide that no policy or other form required by law to be approved by the commissioner need be refiled for approval if the only change from a previously approved form is the inclusion or change of the inception or termination hour. (Amended by Stats. 1983, Ch. 656, Sec. 1.)
  103. 47.

    ## Insurance Code - INS ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1935, Ch. 145. )

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    A “surplus line broker” is defined as a person licensed under Section 1765 and authorized to do business under Chapter 6 of Part 2 of Division 1.

    ## Insurance Code - INS ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1935, Ch. 145. ) ## 47. “Surplus line broker” means a person licensed under Section 1765 and authorized to do business under Chapter 6 (commencing with Section 1760) of Part 2 of Division 1. (Added by Stats. 1998, Ch. 269, Sec. 1. Effective January 1, 1999.)
  104. 48.

    ## Insurance Code - INS ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1935, Ch. 145. )

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    This section defines a “surplus line broker certificate” as a certificate issued by a surplus line broker to an insurance purchaser to show insurance placement with an eligible nonadmitted insurer.

    ## Insurance Code - INS ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1935, Ch. 145. ) ## 48. A “surplus line broker certificate” means a certificate issued by a surplus line broker to an insurance purchaser as evidence of the placement of insurance with an eligible nonadmitted insurer in accordance with the requirements of Sections 1764, 1764.1, and 1764.2. (Added by Stats. 1999, Ch. 255, Sec. 1. Effective January 1, 2000.)
  105. 480.

    ## 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 5. The Premium [480 - 491] ( Chapter 5 enacted by Stats. 1935, Ch. 145. )

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    An insurer is entitled to payment of the premium once the insured subject matter is exposed to the insured peril.

    ## 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 5. The Premium [480 - 491] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## 480. An insurer is entitled to payment of the premium as soon as the subject matter insured is exposed to the peril insured against. (Enacted by Stats. 1935, Ch. 145.)
  106. 481.

    ## 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 5. The Premium [480 - 491] ( Chapter 5 enacted by Stats. 1935, Ch. 145. )

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    This section gives insured people a right to premium refunds in some cancellation or surrender situations, and requires certain insurance policies to disclose non-pro rata refund terms and related fees or penalties.

    ## 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 5. The Premium [480 - 491] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## 481. (a) Unless the insurance contract otherwise provides, a person insured is entitled to a return of his or her premium if the policy is canceled, rejected, surrendered, or rescinded, as follows: (1) To the whole premium, if the insurer has not been exposed to any risk of loss. (2) When the insurance is made for a definite period of time and the insured surrenders his or her policy, to that proportion of the premium as corresponds with the unexpired time, after deducting from the whole premium any claim for loss or damage under the policy that has previously accrued. The provisions of Section 482 apply only to the expired time. (b) No contract for individual motor vehicle liability or homeowners’ multiple-peril insurance may contain a provision that mandates that the premium for the policy shall be fully earned upon the happening of any contingency except the expiration of the policy itself. This subdivision shall not apply to policy fees or membership fees. (c) (1) Any insurance policy that includes a provision to refund premium other than on a pro rata basis, including the assessment of cancellation fees, shall disclose that fact in writing, including the actual or maximum fees or penalties to be applied, which may be stated in the form of percentages of the premium. The disclosure shall be provided prior to, or concurrent with, the application and prior to each renewal to which the policy provision applies. For purposes of this subdivision, an insurer offering workers’ compensation insurance, as defined in Section 109, may provide the disclosure with the quote offering insurance to the consumer prior to the consumer accepting the quote in lieu of disclosure prior to, or concurrent with, the application. Disclosure shall not be required if the policy provision permits, but does not require, the insurer to refund premium other than on a pro rata basis, and the insurer refunds premium on a pro rata basis. (2) If an application is made by telephone, the disclosure shall be mailed to the applicant or insured within five business days. (3) The disclosure may be made electronically pursuant to Section 38.6 in lieu of being mailed. (4) This section does not apply to cancellations that are calculated subject to paragraph (2) of subdivision (g) of Section 673. (d) This section shall not apply to policies of ocean marine insurance. For purposes of this section, “ocean marine insurance” means insurance of vessels or crafts, their cargos, marine builders’ risks, marine protection and indemnity, or other risks commonly insured under marine insurance governed by the provisions of Chapter 1 (commencing with Section 1880) of Part 1 of Division 2, and as distinguished from inland marine insurance policies. (e) The disclosure requirements of subdivision (c) shall be prospective and shall apply only to policies issued or renewed on or after January 1, 2012. (f) Nothing in this section shall require any additional disclosure of a fee or penalty for early cancellation if that disclosure is required by any other law. (Amended by Stats. 2017, Ch. 417, Sec. 4. (AB 1696) Effective January 1, 2018.)
  107. 481.1.

    ## 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 5. The Premium [480 - 491] ( Chapter 5 enacted by Stats. 1935, Ch. 145. )

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    Temporary or implied insurance generally must stay in force for at least 30 days after issuance, unless it is sooner canceled, rejected, or surrendered under the section’s notice rule.

    ## 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 5. The Premium [480 - 491] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## 481.1. (a) In the event any conditional receipt, binder, or other evidence of temporary or implied insurance, except ocean marine insurance as defined in Section 481 and those classes of insurance as defined in Sections 101, 104, and 106, is canceled, rejected, or surrendered by the insurer, the coverage thereby extended shall terminate 10 days after written notice to the named insured is deposited, properly addressed with postage prepaid, with the United States Postal Service. (b) Any conditional receipt, binder, or other evidence of temporary or implied insurance described in subdivision (a) shall remain in force for a period of at least 30 days from the date of its issuance unless sooner canceled, rejected, or surrendered pursuant to the provisions of subdivision (a). (Amended by Stats. 1977, Ch. 404.)
  108. 481.5.

    ## 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 5. The Premium [480 - 491] ( Chapter 5 enacted by Stats. 1935, Ch. 145. )

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    Insurers must refund unearned premium after policy termination or coverage reduction, usually within 25 or 80 business days depending on the policy type, and related agents or brokers must forward money and account for offsets on short deadlines.

    ## 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 5. The Premium [480 - 491] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## 481.5. (a) Whenever a policy of personal lines insurance terminates for any reason, or there is a reduction in coverage, the insurer shall tender the gross unearned premium resulting from the termination, or the amount of the unearned premium generated by the reduction in coverage, to the insured or, pursuant to Section 673, to the insured’s premium finance company. The gross unearned premium shall be tendered within 25 business days after the insurer either receives notice of the event that generated the gross unearned premium, or receives notice from a premium finance company of a cancellation. (b) (1) Whenever a policy other than a policy of personal lines insurance terminates for any reason, or there is a reduction in coverage, the gross unearned premium shall be tendered to the insured or, pursuant to Section 673, to the insured’s premium finance company. If the policy is not auditable, the gross unearned premium shall be tendered within 80 business days after the insurer either receives notice of the event that generated the gross unearned premium, or receives notice from a premium finance company of a cancellation. If the policy is auditable, the gross unearned premium shall be tendered within 80 business days after the insured provides all requested audit information to the insurer or the insurer’s designee. (2) Notwithstanding paragraph (1), an insurer shall not be required to tender the unearned premium within 80 business days if the final unearned premium amount cannot be determined due to the insured’s failure, in breach of a policy requirement, to cooperate with the insurer in a premium audit, or if the amount of the unearned premium determined by a premium audit remains in dispute. (c) An insurer may tender gross or net unearned premium to an agent or broker, or net unearned premium to a finance company, but shall remain liable to the insured or finance company for payment of any portion of the gross unearned premium that the agent or broker fails to remit to the insured or premium finance company. (d) Any unearned premium that an insurer fails to tender within the time periods specified in subdivisions (a) and (b) shall bear interest at the rate of 10 percent per annum from and after the date on which the unearned premium was required to be tendered. For the purposes of this section, the tender of any unearned premium to the insured or premium finance company shall be deemed complete upon the deposit of the unearned premium in the United States mail, prepaid, addressed to the named insured or premium finance company at the last known address, or to an agent or broker with an assignment pursuant to paragraph (1) of subdivision (g). (e) For the purpose of this section, the following definitions apply: (1) “Gross unearned premium” means the unearned portion of the full amount of the premium charged to the insured, including the unearned portion of any amount of the premium the insurer allocated to an agent or broker as commission. (2) “Net unearned premium” means the gross unearned premium minus the unearned commission. (3) “Policy of personal lines insurance” means an insurance policy that is designed for and bought by individuals, and includes, but is not limited to, homeowners’ and automobile policies. (f) The interest penalty required by this section shall not apply to any insurer in conservatorship or liquidation, nor shall this insurer be subject to any other penalty for failure to remit unearned premium in accordance with the time periods required by this section. (g) (1) An assignment by an insured to an agent or broker of the insured’s right to receive unearned premium shall be valid only for the purpose set forth in Section 1735.5. (2) If the insured notifies the insurer, 25 or more days after the insurer’s tender of unearned premium to an agent or broker with an assignment pursuant to paragraph (1), that the agent or broker has failed to issue to the insured an accounting of an offset permitted by Section 1735.5, the insurer shall, within an additional 15 days, either tender the unearned premium directly to the insured or provide the insured with the agent’s or broker’s accounting of the offset permitted by Section 1735.5. (3) Whenever an insurer tenders the net rather than gross unearned premium to an agent or broker or premium finance company, the insurer shall contemporaneously notify the agent or broker of the amount of the unearned commission. (4) If an insurer elects to tender the net rather than the gross unearned premium to a premium finance company, the insurer shall document that the agent or broker tendered unearned commission to the premium finance company within the period required under subdivision (a) or (b) after the insurer either receives notice of the event that generated the unearned premium, or receives notice from a premium finance company of a cancellation. (h) Whenever an agent or broker receives a refund from a premium finance company, the agent or broker shall tender that money to the insured within 25 days. Whenever an agent or broker with an assignment from the insured receives unearned premium from an insurer, the agent or broker shall account to the insured for any offset permitted by Section 1735.5 within 25 days. If the agent or broker fails to tender payment of any remaining unearned premium after the offset within 25 days, the agent or broker shall pay the insured interest at the rate of 10 percent per annum from and after the 26th day after the agent or broker receives the refund. (i) In addition to the required unearned premium refund, an insurer shall provide both the insured and the agent or broker, upon the request of either, with an accounting and explanation of how the amount of the refund was calculated. The explanation shall be clear, concise, and easy to comprehend. The commissioner may adopt regulations setting forth standards to govern this subdivision. (j) For purposes of subdivisions (a) to (c), inclusive, if the unearned premium is not assigned as security to a premium finance agency pursuant to a premium finance agreement and the amount of unearned premium is less than twenty-five dollars ($25), tender of unearned premium shall include applying the amount of unearned premium either to the renewal premium at the next renewal date or to other premiums due, provided written notice of either application is given to the insured within 30 days after the endorsement, rejection, declination, cancellation, or surrender of a policy of insurance. At the time of endorsement or surrender of a policy of insurance or, within 15 days after the mailing of the written notice required by this subdivision, the insured may request in writing that the unearned premium be tendered as provided in subdivisions (a) to (c), inclusive. Whenever the amount of unearned premium is less than five dollars ($5), tender shall be effective and the written notice required by this subdivision shall not be required if the unearned premium is applied either to the renewal premium at the next renewal date or to other premiums due. (k) Notwithstanding subdivisions (a) to (c), inclusive, an insurer may at any time solicit the insured’s consent, or may in its policy reserve the right, to apply the unearned premium generated by an amendment or endorsement removing or reducing coverage for an insured person or property to the balance owed on the policy as a whole, rather than tendering a refund of the unearned premium. This subdivision shall not apply if the unearned premium is assigned as security to a premium finance company. (l) The amount of unearned premium required to be refunded by an insurer pursuant to this section shall not exceed the amount paid to the insurer by the insured or by a premium finance company. (Amended by Stats. 2006, Ch. 538, Sec. 450. Effective January 1, 2007.)
  109. 482.

    ## 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 5. The Premium [480 - 491] ( Chapter 5 enacted by Stats. 1935, Ch. 145. )

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    The insured is not entitled to a return of premiums for a risk once the insured peril has existed and the insurer has been liable, except as section 481 or the insurance contract provides.

    ## 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 5. The Premium [480 - 491] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## 482. Except as provided by section 481, or by the insurance contract, if a peril insured against has existed, and the insurer has been liable for any period, however short, the insured is not entitled to return of premiums, so far as that particular risk is concerned. (Enacted by Stats. 1935, Ch. 145.)
  110. 483.

    ## 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 5. The Premium [480 - 491] ( Chapter 5 enacted by Stats. 1935, Ch. 145. )

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    A person insured is entitled to get back the premium in three voidability situations.

    ## 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 5. The Premium [480 - 491] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## 483. A person insured is entitled to a return of the premium: (a) When the contract is voidable, on account of the fraud or misrepresentation of the insurer. (b) When the contract is voidable on account of facts, of the existence of which the insured was ignorant without his fault. (c) When, by any default of the insured other than actual fraud, the insurer did not incur any liability under the policy. (Enacted by Stats. 1935, Ch. 145.)
  111. 484.

    ## 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 5. The Premium [480 - 491] ( Chapter 5 enacted by Stats. 1935, Ch. 145. )

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    A premium receipt acknowledgment in a policy counts as conclusive evidence that the premium was paid, but the policy can still be canceled for unpaid premium if the policy reserves that cancellation right to the insurer.

    ## 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 5. The Premium [480 - 491] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## 484. An acknowledgment in a policy of the receipt of premium is conclusive evidence of its payment, so far as to make the policy binding. Notwithstanding such acknowledgment, a policy may be canceled effective at such times as otherwise permitted by law for nonpayment of all or any portion of the premium which is actually unpaid if such cancellation right is reserved to the insurer in the policy. (Amended by Stats. 1969, Ch. 536.)
  112. 485.

    ## 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 5. The Premium [480 - 491] ( Chapter 5 enacted by Stats. 1935, Ch. 145. )

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    If there is overinsurance by several insurers, the insured is entitled to a ratable refund of premium.

    ## 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 5. The Premium [480 - 491] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## 485. In case of an overinsurance by several insurers, the insured is entitled to a ratable return of the premium, proportioned to the amount by which the aggregate sum insured in all the policies exceeds the insurable value of the subject at risk. (Enacted by Stats. 1935, Ch. 145.)
  113. 486.

    ## 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 5. The Premium [480 - 491] ( Chapter 5 enacted by Stats. 1935, Ch. 145. )

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    If overinsurance is caused by simultaneous policies, the insurers must contribute to the premium that is returned in proportion to the amount insured under their policies.

    ## 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 5. The Premium [480 - 491] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## 486. When an overinsurance is effected by simultaneous policies, the insurers contribute to the premium to be returned in proportion to the amount insured by their respective policies. (Enacted by Stats. 1935, Ch. 145.)
  114. 487.

    ## 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 5. The Premium [480 - 491] ( Chapter 5 enacted by Stats. 1935, Ch. 145. )

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    When overinsurance exists through successive policies, only the policies relieved by prior insurance share in any return of premium, and only in proportion to the excess premium over the liability they could otherwise face.

    ## 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 5. The Premium [480 - 491] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## 487. When an overinsurance is effected by successive policies, those only contribute to a return of the premium who are exonerated by prior insurance from the liability assumed by them, and in proportion as the sum for which the premium was paid exceeds the amount for which, on account of prior insurance, they could be made liable. (Enacted by Stats. 1935, Ch. 145.)
  115. 488.

    ## 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 5. The Premium [480 - 491] ( Chapter 5 enacted by Stats. 1935, Ch. 145. )

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    An insurer may not raise a private passenger auto policy premium because of certain traffic convictions tied to work driving, if the insured or applicant gives a written declaration under penalty of perjury.

    ## 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 5. The Premium [480 - 491] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## 488. No insurer shall, in issuing or renewing a private passenger automobile insurance policy, increase the premium on that policy for the reason that the insured or applicant for insurance has been convicted for traffic violations committed while operating a motor vehicle for compensation during the hours of his employment if, with respect to a conviction, the employee or applicant has submitted to the insurer a written declaration made by the employee under penalty of perjury that the applicant or insured was, at that time, operating a motor vehicle for compensation during the hours of his or her employment. This section applies only to those individuals whose specific duties include driving their employer’s motor vehicles or individuals who have authority in their name from the Public Utilities Commission to operate as a highway carrier and who are the registered owners or lease operators of the motor vehicle used in the operation as a highway carrier. This section does not apply to an insured or applicant for insurance convicted of any of the following: (a) Homicide or assault arising out of the operation of a motor vehicle for compensation during the hours of employment. (b) A violation while operating a motor vehicle for compensation during the hours of employment of any of the following sections or section subdivisions of the Vehicle Code: (1) Subdivision (a) of Section 14601. (2) Subdivision (a) of Section 14601.1. (3) Subdivision (a) of Section 14601.2. (4) Section 20001 or 20002. (5) Subdivision (a) of Section 20008. (6) Section 23103, 23104, 23105, 23152, or 23153. (c) This section shall not apply to a person insured under the California assigned risk plan prescribed by Article 4 (commencing with Section 11620) of Chapter 1 of Part 3 of Division 2. (Amended by Stats. 2007, Ch. 682, Sec. 2. Effective January 1, 2008.)
  116. 488.5.

    ## 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 5. The Premium [480 - 491] ( Chapter 5 enacted by Stats. 1935, Ch. 145. )

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    Insurers must not raise private auto insurance premiums for covered public safety or federal employees because of specified duty-related accidents.

    ## 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 5. The Premium [480 - 491] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## 488.5. (a) An insurer shall not, in issuing or renewing a private automobile insurance policy to a peace officer, member of the Department of the California Highway Patrol, or firefighter, with respect to his or her operation of a private passenger motor vehicle, increase the premium on that policy for the reason that the insured or applicant for insurance has been involved in an accident while operating an authorized emergency vehicle, as defined in subdivision (a) or (f) of Section 165 of the Vehicle Code or in paragraph (1) or (2) of subdivision (b) of Section 165 of the Vehicle Code, or any employer-leased vehicle or employer-rented vehicle, in the performance of his or her duty during the hours of his or her employment, or was involved in an accident while operating his or her private passenger motor vehicle in the performance of his or her duty at the request or direction of an employer. (b) An insurer shall not, in issuing or renewing a private automobile insurance policy to a federal officer or federal customs agent, with respect to his or her operation of a private motor vehicle, increase the premium on that policy for the reason that the insured or applicant for insurance has been involved in an accident while operating an official government vehicle in the performance of his or her duty during the hours of his or her employment. (c) As used in this section: (1) “Peace officer” means every person defined in Chapter 4.5 (commencing with Section 830) of Title 3 of Part 2 of the Penal Code. (2) “Policy” shall have the same meaning as defined in subdivision (a) of Section 660. (Amended by Stats. 2012, Ch. 823, Sec. 1. (AB 2298) Effective January 1, 2013.)
  117. 489.

    ## 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 5. The Premium [480 - 491] ( Chapter 5 enacted by Stats. 1935, Ch. 145. )

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    Insurers, or their agents, must give named insureds notices about premium increases tied to accidents or convictions, including at issuance and before renewal; a one-time March 1977 notice rule also applied and expired March 1, 1978.

    ## 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 5. The Premium [480 - 491] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## 489. (a) Upon issuance of a policy of insurance described in Section 660, the insurer or its agent shall deliver to the named insured a notice explaining the manner in which the insurer’s rating plan provides for an increase in the premium based upon accidents or convictions within the meaning of Sections 13103 and 13105 of the Vehicle Code. Every insurer or its agent, not less than 20 days prior to renewal of a policy covered by this section, shall inform the named insured of the named insured’s right to be informed, upon request, of any increase in the premium, in whole or in part, charged the named insured by virtue of the involvement in any accident, or conviction within the meaning of Section 13103 and 13105 of the Vehicle Code, by the insured or any operator of the motor vehicle. (b) Every insurer shall, after March 1, 1977, as part of the first offer required by Section 663, deliver to everyone who was a named insured under a policy of insurance described in Section 660 on March 1, 1977, a notice explaining the manner in which the insurer’s rating plan provides for an increase in the premium, based upon accidents or convictions within the meaning of Sections 13103 and 13105 of the Vehicle Code. The provisions of this subdivision shall expire on March 1, 1978. (Added by Stats. 1976, Ch. 1240.)
  118. 491.

    ## 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 5. The Premium [480 - 491] ( Chapter 5 enacted by Stats. 1935, Ch. 145. )

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    A motor vehicle liability insurer’s rating plan cannot raise premiums for an accident when the insured was not at fault; if the insurer disagrees with an accident report on fault, it must investigate before deciding.

    ## 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 5. The Premium [480 - 491] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## 491. The rating plan of a motor vehicle liability insurer shall not provide for an increase in the premium if based upon an accident in which the insured is not at fault, in any manner, as determined by either the accident report or the insurer. In the event the insurer determines that its insured is at fault contrary to an accident report’s specific finding that the insured is not at fault, the insurer shall reach its conclusion only after an investigation. (Added by Stats. 1986, Ch. 470, Sec. 1.)
  119. 5.

    ## Insurance Code - INS ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1935, Ch. 145. )

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    The general provisions in this section govern how the code is to be construed, unless the context requires otherwise.

    ## Insurance Code - INS ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1935, Ch. 145. ) ## 5. Unless the context otherwise requires, the general provisions hereinafter set forth shall govern the construction of this code. (Enacted by Stats. 1935, Ch. 145.)
  120. 500.

    ## 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 5.2. Renewal Notices [500- 500.] ( Chapter 5.2 added by Stats. 1972, Ch. 357. )

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    If an insurer usually sends renewal premium notices but plans to stop, it must notify the insured of that intent.

    ## 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 5.2. Renewal Notices [500- 500.] ( Chapter 5.2 added by Stats. 1972, Ch. 357. ) ## 500. Whenever any insurer has, as a regular course of conduct, sent renewal premium notices to an insured, and intends to discontinue that practice, it shall notify such insured of its intention not to send such notices. (Added by Stats. 1972, Ch. 357.)
  121. 5050.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [5050 - 5063] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    At least 250 residents of one county may form a mutual fire insurer if they agree to buy coverage, pay the premium when notified, and make a special deposit at incorporation.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [5050 - 5063] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 5050. Two hundred fifty (250) or more persons residing in one county of this State may incorporate for the purpose of forming a mutual fire insurer upon all such persons agreeing to: (a) Secure fire insurance from such insurer when organized through policies to be issued by such insurer having face amounts aggregating one million five hundred thousand dollars ($1,500,000) or more covering their property of the same or greater value. Such insurer shall retain net of reinsurance aggregate amounts on such policies at least equal to such amount. (b) Pay the premium for such insurance immediately upon notification by such insurer that it is prepared to issue such policies providing such insurance. (c) Pay to the insurer immediately upon its incorporation a special deposit of at least one dollar ($1) on each one hundred dollars ($100) of insurance applied for under (a) above, such special deposit to be applied to future premiums payable by such persons either after the expiration of three years or upon the commissioner determining that the insurer has a surplus earned by insurance operations in the amount of at least fifteen thousand dollars ($15,000), whichever occurs first. (Amended by Stats. 1955, Ch. 1250.)
  122. 5050.1.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [5050 - 5063] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    If the incorporation of the insurer is not completed within one year after the first agreement is secured, the related proceedings and agreements become null and void.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [5050 - 5063] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 5050.1. If such persons have not performed all acts and secured all agreements necessary to complete the incorporation of such insurer within one year from the date of their first securing an agreement from any person, all proceedings and agreements in connection with such incorporation shall become null and void and all persons entering into such agreements shall be released therefrom. (Added by Stats. 1955, Ch. 1250.)
  123. 5050.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [5050 - 5063] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    A county mutual fire insurer may extend a fire policy to cover certain additional insurance kinds if it has issued a fire policy and keeps at least $50,000 more admitted assets than liabilities.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [5050 - 5063] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 5050.5. Any county mutual fire insurer heretofore or hereafter incorporated and doing business under the provisions of this chapter may, if it has issued an insurance policy against fire, and as long as it maintains an excess of admitted assets over liabilities of at least fifty thousand dollars ($50,000), endorse such policy to extend the coverage thereof to include insurance of the kinds included in Sections 107, 112, 120 and 122 (excluding liability insurance). (Amended by Stats. 1961, Ch. 473.)
  124. 5051.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [5050 - 5063] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    Before filing incorporation papers, the persons organizing the insurer must pay $7,055 in advance to the commissioner.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [5050 - 5063] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 5051. Upon the payment in advance of seven thousand fifty-five dollars ($7,055) to the commissioner for all services to be rendered by him or her in the matter of organization of the insurer, those persons shall file with the commissioner a declaration of their intention to incorporate for the purposes expressed in Section 5050. The declaration shall be signed by all of those persons, and shall contain a copy of the articles of incorporation proposed to be adopted. (Amended by Stats. 2017, Ch. 534, Sec. 54. (AB 1699) Effective January 1, 2018.)
  125. 5052.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [5050 - 5063] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    The commissioner must examine proposed articles of incorporation and, if they conform to the chapter, must issue a certificate allowing incorporation.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [5050 - 5063] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 5052. The commissioner shall examine the proposed articles of incorporation. If they conform to this chapter he shall deliver to such persons a certificate permitting them to incorporate such insurer. The certificate shall be directed to the clerk of the county in which such insurer is proposed to be organized and shall contain a copy of the proposed articles of incorporation. (Enacted by Stats. 1935, Ch. 145.)
  126. 5053.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [5050 - 5063] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    A county mutual fire insurer may operate a fire insurance business only after organizing under its articles of incorporation and obtaining a certificate of authority from the commissioner.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [5050 - 5063] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 5053. The duly executed articles of incorporation and a copy of the certificate of the commissioner shall be filed with the Secretary of State in conformity with Section 200 of the Corporations Code. Upon organizing under the articles of incorporation and obtaining from the commissioner a certificate of authority, the county mutual fire insurer may carry on a fire insurance business as provided by this chapter. The term and nature of the certificate of authority, annual renewal fee therefor, the due date and delinquent date of the fee shall be the same as prescribed by Article 3 (commencing with Section 699) of Chapter 1 of Part 2 of Division 1 for stock and mutual insurers governed by that article. (Amended by Stats. 2002, Ch. 221, Sec. 68. Effective January 1, 2003.)
  127. 5054.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [5050 - 5063] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    The Legislature of this State may control and modify the articles of incorporation and certificate of a county mutual fire insurer operating under this chapter.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [5050 - 5063] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 5054. The articles of incorporation and certificate obtained by any county mutual fire insurer operating under the provisions of this chapter are subject to control and modification by the Legislature of this State. (Enacted by Stats. 1935, Ch. 145.)
  128. 5055.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [5050 - 5063] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    By-laws and any amendments must be filed with the commissioner within 60 days after adoption.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [5050 - 5063] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 5055. The by-laws and all amendments thereto shall be filed with the commissioner within sixty days after their adoption. (Enacted by Stats. 1935, Ch. 145.)
  129. 5056.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [5050 - 5063] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    A county mutual fire insurer must have 7 to 11 directors, with a majority making a quorum.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [5050 - 5063] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 5056. Such insurer shall have not less than seven, nor more than 11 directors, a majority of whom shall constitute a quorum to do business. The by-laws or the articles may provide or be amended to provide for either concurrent terms of one year for all directors or staggered terms of not more than five years. If provision is made for staggered terms, such terms shall, except for the first directors elected for staggered terms, be uniform for all directors and so arranged that as nearly equal a number of directors as is feasible shall be elected each year. The directors shall be elected by ballot from the members of the insurer. They shall hold office for the terms for which they were elected, and until their successors are elected and qualified. (Amended by Stats. 1945, Ch. 95.)
  130. 5057.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [5050 - 5063] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    The insurer’s members must hold an annual meeting on the second Monday of February each year, unless the board of directors sets a different time.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [5050 - 5063] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 5057. The annual meeting of the members of the insurer shall be held on the second Monday of February of each year, unless its board of directors fixes the time for the annual meeting in which event the board may select any day between the second and third Mondays of February. (Amended by Stats. 1941, Ch. 117.)
  131. 5058.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [5050 - 5063] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    Each member is entitled to one vote for the first board election, and later to as many votes as there are directors to be elected.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [5050 - 5063] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 5058. In the election of the first board of directors each member shall be entitled to one vote. At every subsequent election each member shall be entitled to as many votes as there are directors to be elected. (Amended by Stats. 1941, Ch. 117.)
  132. 5059.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [5050 - 5063] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    A member may vote in person or by proxy and may distribute or cumulate votes among the directors to be elected.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [5050 - 5063] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 5059. A member may cast his votes in person or by proxy, distributing them among the directors to be elected, or among a less number of the directors, or cumulating them upon one candidate, as he sees fit. (Enacted by Stats. 1935, Ch. 145.)
  133. 5060.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [5050 - 5063] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    The directors must elect a president, vice president, treasurer, and secretary. The treasurer and secretary do not have to be members of the insurer or natural persons.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [5050 - 5063] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 5060. The directors shall elect, from their own number, a president and a vice president. They shall also elect a treasurer and a secretary, who need not be members of the insurer nor natural persons. All of such officers hold their office for one year from the date of their election, and until their successors are elected and qualified. (Enacted by Stats. 1935, Ch. 145.)
  134. 5061.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [5050 - 5063] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    The treasurer and secretary must give bonds to the insurer, and the board of directors sets the bond amounts.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [5050 - 5063] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 5061. The treasurer and secretary shall give bonds to the insurer for the faithful performance of their duties, in such amounts as are prescribed by the board of directors. (Enacted by Stats. 1935, Ch. 145.)
  135. 5062.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [5050 - 5063] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    People involved in forming or managing a county mutual fire insurer must not advance premiums, special deposits, or assessments for subscribers or members.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [5050 - 5063] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 5062. No incorporators or persons acting in their behalf or other persons participating in the management of such insurer shall advance to or for the subscribers or members any premium, special deposit or assessment required to be paid. It is the intent of this chapter that no person shall have a proprietary interest in such insurer, except equally with all other members. (Added by Stats. 1955, Ch. 1250.)
  136. 5063.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [5050 - 5063] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    A county mutual fire insurer may not enter a general agency or management contract that gives another person virtual control of its operations or business production in California or part of California.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [5050 - 5063] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 5063. No such insurer may enter into any general agency or management contract whereby it authorizes or delegates to a person the right to assume virtual control of its operations or of the production of business for it in this State or any specified portion thereof. (Added by Stats. 1955, Ch. 1250.)
  137. 5080.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Powers [5080 - 5081] ( Article 2 enacted by Stats. 1935, Ch. 145. )

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    The insurer and its directors have the usual powers, and they are subject to the usual duties of corporations and directors.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Powers [5080 - 5081] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 5080. Such insurer and its directors possess the usual powers, and are subject to the usual duties of corporations and directors. (Enacted by Stats. 1935, Ch. 145.)
  138. 5081.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Powers [5080 - 5081] ( Article 2 enacted by Stats. 1935, Ch. 145. )

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    A county mutual fire insurer may accumulate surplus if its directors consider it desirable.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Powers [5080 - 5081] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 5081. Such insurer may accumulate such surplus as its directors deem desirable for meeting contingencies, to cover the catastrophe hazard, and for general corporate purposes. (Added by Stats. 1945, Ch. 96.)
  139. 5090.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Membership [5090 - 5094] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    People with an insurable interest in property in the relevant county, or an adjoining county, may become members by insuring there; members get membership rights, with limits on director residency and director selection.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Membership [5090 - 5094] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 5090. Any person having an insurable interest in property in the county in which any such insurer is formed or any person having such an interest in property in any adjoining county may become a member by insuring therein. Every member shall be entitled to all the rights and privileges appertaining to membership, except that at least a majority of the directors shall reside either in the county in which the insurer is formed or in any of the counties which were the original domicile of any of the constituent companies of a county mutual merged under Article 9.5 (commencing with Section 7040) of this chapter, and not more than one member from each of the adjoining counties in which it transacts insurance may become one of its directors. Whenever any public or private corporation, board or association in this State has entered into an agreement for and holds a policy in any county mutual insurer operating under this chapter, any officer, stockholder or trustee of any such corporation, board or association may be recognized as acting for or on its behalf for the purpose of such membership, but shall not be personally liable upon such contract of insurance by reason of acting in such representative capacity. The right of any corporation organized under the laws of this State to participate as a member of such county mutual insurer is hereby declared to be incidental to the purpose for which such corporation is organized and as much granted as the rights and powers expressly conferred. (Amended by Stats. 1963, Ch. 1470.)
  140. 5090.2.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Membership [5090 - 5094] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    Limits who may serve as a director of a county mutual insurer and restricts commissions for certain related people.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Membership [5090 - 5094] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 5090.2. Not more than one person licensed as an insurance agent, broker or solicitor, or who is a member of an association or partnership or a stockholder or employee of a corporation which is so licensed is eligible to be a director of a county mutual insurer. If a director of the board is licensed as an insurance agent, broker or solicitor, or is a member of an association or partnership or a stockholder or employee of a corporation which is so licensed, neither he nor the association, partnership or corporation shall transact insurance with or for a county mutual insurer as an agent, broker or solicitor, or receive any commission from a county mutual insurer. The secretary or other person who passes upon the risks and upon whose decisions or recommendations the application for insurance is accepted or rejected by the insurer, shall not receive, as any part of his compensation, a commission upon the premiums. His compensation shall be determined by the directors. (Added by Stats. 1941, Ch. 117.)
  141. 5091.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Membership [5090 - 5094] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    A member of the insurer may start withdrawing by surrendering the policy for cancellation and giving written notice to the secretary, while the policy is still in force and the insurer is still operating.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Membership [5090 - 5094] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 5091. Any member of such insurer may commence to withdraw therefrom by surrendering his policy for cancellation, and by giving notice in writing to the secretary at any time during the life of the policy and while the insurer continues the business for which it was organized. (Enacted by Stats. 1935, Ch. 145.)
  142. 5092.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Membership [5090 - 5094] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    A withdrawal may be completed by paying the member’s share, if any, under the policy, of all claims existing against the insurer on the day the withdrawal is completed.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Membership [5090 - 5094] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 5092. The withdrawal may be completed by paying the member’s share, if any, under the terms of his policy, of all claims that exist against the insurer on the day of such completion. (Enacted by Stats. 1935, Ch. 145.)
  143. 5093.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Membership [5090 - 5094] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    The insurer may cancel a policy if it gives the insured 20 days’ written notice and states whether any un-tendered excess premium will be refunded on demand.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Membership [5090 - 5094] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 5093. The insurer may cancel any policy by giving the insured 20 days’ written notice of cancellation with or without tender of the excess of paid premium above the pro rata premium for the expired time, which excess, if not tendered, shall be refunded on demand. Notice of cancellation shall state that the excess premium (if not tendered) will be refunded on demand. The notice may be served in person or by mail, addressed either to the member’s last post office address or, if this is not known, to the address given upon the application which is part of the policy. (Amended by Stats. 2003, Ch. 148, Sec. 5. Effective January 1, 2004.)
  144. 5094.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Membership [5090 - 5094] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    If the insurer cancels the policy, it must notify the mortgage holder and any person entitled to loss payments, using the same manner of notice.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Membership [5090 - 5094] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 5094. In case of cancellation by the insurer it shall also notify in the same manner any holder of a mortgage whose name appears, either on the signed application which is a part of the policy, or otherwise upon the policy and any party to whom loss, if any, is payable. (Enacted by Stats. 1935, Ch. 145.)
  145. 510.

    ## 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 5.3. Consumer Complaints [510- 510.] ( Chapter 5.3 added by Stats. 1987, Ch. 808, Sec. 1. )

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    When certain insurance policies or bail bonds are first issued or delivered, the insurer must give a written consumer disclosure with specified Department of Insurance contact information, and the disclosure must be formatted in bold large type.

    ## 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 5.3. Consumer Complaints [510- 510.] ( Chapter 5.3 added by Stats. 1987, Ch. 808, Sec. 1. ) ## 510. (a) Whenever a policy of insurance specified in Section 660 or 675, a policy of life insurance as defined in Section 101, a policy of disability insurance as defined in Section 106, or a certificate of coverage as defined in Section 10270.6, is first issued to or delivered to a new insured or a new policyholder in this state, or when a bail bond as defined in Section 1800.4 is first executed or delivered, the insurer shall include a written disclosure containing the name, address, toll-free telephone number, and internet website of the unit within the Department of Insurance that deals with consumer affairs. The telephone number shall be the same as that provided to consumers under Section 12921.1. The disclosure shall be printed in large, boldface type. (b) The disclosure described in subdivision (a) shall also contain the address and customer service telephone number of the insurer, or the address and customer service telephone number of the agent or broker of record, or all of those addresses and telephone numbers. All addresses and telephone numbers for the insurer or the agent or broker of record shall be prominently displayed, in boldfaced type. The disclosure shall also contain a statement that the Department of Insurance should be contacted only after discussions with the insurer, or its agent or other representative, or both, have failed to produce a satisfactory resolution to the problem. If the policy or certificate was issued or delivered by an agent or broker, the disclosure shall specifically advise the insured to contact their agent or broker for assistance. (Amended by Stats. 2022, Ch. 424, Sec. 3. (SB 1242) Effective January 1, 2023.)
  146. 515.

    ## 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 5.4. Proof of Coverage Disclosure [515- 515.] ( Chapter 5.4 added by Stats. 1990, Ch. 314, Sec. 1. )

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    An insurer must promptly give written proof of coverage to the named insured or the DMV when requested, and may provide it electronically to the insured if available.

    ## 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 5.4. Proof of Coverage Disclosure [515- 515.] ( Chapter 5.4 added by Stats. 1990, Ch. 314, Sec. 1. ) ## 515. (a) (1) Notwithstanding any other law, an insurer issuing policies of automobile liability insurance or motor vehicle liability insurance shall, upon request of either the named insured or the Department of Motor Vehicles, promptly issue to that person or the department written verification as to the existence of that coverage. (2) Upon the request of the insured, an insurer may issue the verification as to the existence of that coverage in an electronic format to a mobile electronic device to the extent available. This section does not require an insurer to provide the verification of coverage in an electronic format in real time. (b) For purposes of this section, “mobile electronic device” has the same meaning as defined in subdivision (f) of Section 16028 of the Vehicle Code. (Amended by Stats. 2012, Ch. 236, Sec. 1. (AB 1708) Effective January 1, 2013.)
  147. 520.

    ## 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 6. Loss [520 - 580] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Transfer of Interest After Loss [520- 520.] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    An agreement made before a loss that tries to stop the insured from transferring a claim against the insurer after the loss is void, unless another code provision says otherwise.

    ## 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 6. Loss [520 - 580] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Transfer of Interest After Loss [520- 520.] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 520. An agreement not to transfer the claim of the insured against the insurer after a loss has happened, is void if made before the loss except as otherwise provided in Article 2 of Chapter 1 of Part 2 of Division 2 of this code. (Amended by Stats. 1947, Ch. 904.)
  148. 530.

    ## 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 6. Loss [520 - 580] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Causes of Loss [530 - 533.7] ( Article 2 enacted by Stats. 1935, Ch. 145. )

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    An insurer is liable for a loss if an insured peril was the proximate cause, even if another unplanned peril was a remote cause.

    ## 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 6. Loss [520 - 580] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Causes of Loss [530 - 533.7] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 530. An insurer is liable for a loss of which a peril insured against was the proximate cause, although a peril not contemplated by the contract may have been a remote cause of the loss; but he is not liable for a loss of which the peril insured against was only a remote cause. (Enacted by Stats. 1935, Ch. 145.)
  149. 530.5.

    ## 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 6. Loss [520 - 580] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Causes of Loss [530 - 533.7] ( Article 2 enacted by Stats. 1935, Ch. 145. )

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    If a loss involves a landslide, mudslide, mudflow, or debris flow together with other perils, coverage must be provided when an insured peril is the efficient proximate cause and would otherwise be covered.

    ## 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 6. Loss [520 - 580] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Causes of Loss [530 - 533.7] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 530.5. If a loss or damage results from a combination of perils, one of which is a landslide, mudslide, mudflow, or debris flow, coverage shall be provided if an insured peril is the efficient proximate cause of the loss or damage and coverage would otherwise be provided for the insured peril. Coverage shall be provided under the same terms and conditions as would be provided for the insured peril. (Added by Stats. 2018, Ch. 620, Sec. 1. (SB 917) Effective January 1, 2019.)
  150. 531.

    ## 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 6. Loss [520 - 580] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Causes of Loss [530 - 533.7] ( Article 2 enacted by Stats. 1935, Ch. 145. )

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    An insurer is liable when a rescue of insured property leads to an uninsured peril that permanently deprives the insured of possession, or when rescue efforts cause the loss.

    ## 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 6. Loss [520 - 580] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Causes of Loss [530 - 533.7] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 531. An insurer is liable: (a) Where the thing insured is rescued from a peril insured against, and which would otherwise have caused a loss, if, in the course of such rescue, the thing is exposed to a peril not insured against, and which permanently deprives the insured of its possession, in whole or in part. (b) If a loss is caused by efforts to rescue the thing insured from a peril insured against. (Enacted by Stats. 1935, Ch. 145.)
  151. 532.

    ## 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 6. Loss [520 - 580] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Causes of Loss [530 - 533.7] ( Article 2 enacted by Stats. 1935, Ch. 145. )

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    A loss is excepted from coverage if it would not have happened but for a peril that is specially excepted in the insurance contract, even when the immediate cause was a different peril.

    ## 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 6. Loss [520 - 580] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Causes of Loss [530 - 533.7] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 532. If a peril is specially excepted in a contract of insurance and there is a loss which would not have occurred but for such peril, such loss is thereby excepted even though the immediate cause of the loss was a peril which was not excepted. (Enacted by Stats. 1935, Ch. 145.)
  152. 533.

    ## 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 6. Loss [520 - 580] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Causes of Loss [530 - 533.7] ( Article 2 enacted by Stats. 1935, Ch. 145. )

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    An insurer is not liable for a loss caused by the insured’s wilful act, but negligence by the insured, agents, or others does not excuse the insurer.

    ## 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 6. Loss [520 - 580] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Causes of Loss [530 - 533.7] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 533. An insurer is not liable for a loss caused by the wilful act of the insured; but he is not exonerated by the negligence of the insured, or of the insured’s agents or others. (Enacted by Stats. 1935, Ch. 145.)
  153. 533.5.

    ## 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 6. Loss [520 - 580] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Causes of Loss [530 - 533.7] ( Article 2 enacted by Stats. 1935, Ch. 145. )

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    Insurance policies cannot cover fines, penalties, or restitution in the specified proceedings, and cannot provide a duty to defend those claims.

    ## 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 6. Loss [520 - 580] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Causes of Loss [530 - 533.7] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 533.5. (a) No policy of insurance shall provide, or be construed to provide, any coverage or indemnity for the payment of any fine, penalty, or restitution in any criminal action or proceeding or in any action or proceeding brought pursuant to Chapter 5 (commencing with Section 17200) of Part 2 of, or Chapter 1 (commencing with Section 17500) of Part 3 of, Division 7 of the Business and Professions Code by the Attorney General, any district attorney, any city prosecutor, or any county counsel, notwithstanding whether the exclusion or exception regarding this type of coverage or indemnity is expressly stated in the policy. (b) No policy of insurance shall provide, or be construed to provide, any duty to defend, as defined in subdivision (c), any claim in any criminal action or proceeding or in any action or proceeding brought pursuant to Chapter 5 (commencing with Section 17200) of Part 2 of, or Chapter 1 (commencing with Section 17500) of Part 3 of, Division 7 of the Business and Professions Code in which the recovery of a fine, penalty, or restitution is sought by the Attorney General, any district attorney, any city prosecutor, or any county counsel, notwithstanding whether the exclusion or exception regarding the duty to defend this type of claim is expressly stated in the policy. (c) For the purpose of this section, “duty to defend” means the insurer’s right or obligation to investigate, contest, defend, control the defense of, compromise, settle, negotiate the compromise or settlement of, or indemnify for the cost of any aspect of defending any claim in any criminal action or proceeding or in any action or proceeding brought pursuant to Chapter 5 (commencing with Section 17200) of Part 2 of, or Chapter 1 (commencing with Section 17500) of Part 3 of, Division 7 of the Business and Professions Code in which the insured expects or contends that (1) the insurer is liable or is potentially liable to make any payment on behalf of the insured or (2) the insurer will provide a defense for a claim even though the insurer is precluded by law from indemnifying that claim. (d) Any provision in a policy of insurance which is in violation of subdivision (a) or (b) is contrary to public policy and void. (Amended by Stats. 1991, Ch. 1195, Sec. 4.)
  154. 533.7.

    ## 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 6. Loss [520 - 580] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Causes of Loss [530 - 533.7] ( Article 2 enacted by Stats. 1935, Ch. 145. )

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    An insurer may defend a duly licensed physician or surgeon in certain lawsuits involving acts that require a physician’s and surgeon’s certificate.

    ## 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 6. Loss [520 - 580] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Causes of Loss [530 - 533.7] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 533.7. Notwithstanding any other law, an insurer may defend a duly licensed physician or surgeon against any cause of action involving the performance of any act for which a physician’s and surgeon’s certificate is required. (Added by Stats. 1988, Ch. 489, Sec. 2.)
  155. 550.

    ## 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 6. Loss [520 - 580] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Notice and Proofs of Loss [550 - 557.5] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    For fire insurance losses, the insured or another person entitled to the benefit of the insurance must give the insurer notice of the loss without unnecessary delay.

    ## 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 6. Loss [520 - 580] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Notice and Proofs of Loss [550 - 557.5] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 550. In case of loss upon an insurance against fire, an insurer is exonerated if notice thereof is not given to him without unnecessary delay by an insured or some person entitled to the benefit of the insurance. (Enacted by Stats. 1935, Ch. 145.)
  156. 551.

    ## 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 6. Loss [520 - 580] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Notice and Proofs of Loss [550 - 557.5] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    For most insurance policies against loss, notice of an accident, injury, or death may be given within 20 days after the event.

    ## 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 6. Loss [520 - 580] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Notice and Proofs of Loss [550 - 557.5] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 551. Except in the case of life, marine, or fire insurance, notice of an accident, injury, or death may be given at any time within twenty days after the event, to the insurer under a policy against loss therefrom. In such a policy, no requirement of notice within a lesser period shall be valid. (Enacted by Stats. 1935, Ch. 145.)
  157. 552.

    ## 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 6. Loss [520 - 580] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Notice and Proofs of Loss [550 - 557.5] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    If a policy requires preliminary proof of loss, the insured does not have to provide proof equivalent to what would be required in court; it is enough to provide the best evidence available at the time.

    ## 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 6. Loss [520 - 580] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Notice and Proofs of Loss [550 - 557.5] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 552. When preliminary proof of loss is required by a policy, the insured is not bound to give such proof as would be necessary in a court of justice; but it is sufficient for him to give the best evidence in his power at the time. (Enacted by Stats. 1935, Ch. 145.)
  158. 553.

    ## 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 6. Loss [520 - 580] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Notice and Proofs of Loss [550 - 557.5] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    If the insurer does not promptly point out remediable defects in a notice of loss or preliminary proof, those defects are waived.

    ## 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 6. Loss [520 - 580] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Notice and Proofs of Loss [550 - 557.5] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 553. All defects in a notice of loss, or in preliminary proof thereof, which the insured might remedy, and which the insurer omits to specify to him, without unnecessary delay, as grounds of objection, are waived. (Enacted by Stats. 1935, Ch. 145.)
  159. 554.

    ## 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 6. Loss [520 - 580] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Notice and Proofs of Loss [550 - 557.5] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    Delay in giving an insurer notice or proof of loss is treated as waived if the delay was caused by the insurer’s act or if the insurer does not object promptly and specifically on that ground.

    ## 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 6. Loss [520 - 580] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Notice and Proofs of Loss [550 - 557.5] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 554. Delay in the presentation to an insurer of notice or proof of loss is waived, if caused by an act of his, or if he omits to make objection promptly and specifically upon that ground. (Enacted by Stats. 1935, Ch. 145.)
  160. 555.

    ## 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 6. Loss [520 - 580] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Notice and Proofs of Loss [550 - 557.5] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    If a policy requires a third person’s certificate or testimony as preliminary proof of loss, the insured or beneficiary satisfies the requirement by using reasonable diligence to obtain it and, if it is refused, giving the insurer reasonable evidence about the refusal.

    ## 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 6. Loss [520 - 580] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Notice and Proofs of Loss [550 - 557.5] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 555. If a policy requires, by way of preliminary proof of loss, the certificate or testimony of a person other than the insured or beneficiary, there is sufficient compliance with the requirement if the insured or the beneficiary (a) uses reasonable diligence to procure the certificate or testimony, and (b) in case of refusal to give it to him, furnishes reasonable evidence to the insurer that the refusal was not induced by just grounds of disbelief in the facts necessary to be certified or testified. (Amended by Stats. 1941, Ch. 876.)
  161. 557.

    ## 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 6. Loss [520 - 580] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Notice and Proofs of Loss [550 - 557.5] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    It is a misdemeanor for any person to make or help make a false bid or writing about repairing damaged motor vehicles or other damaged property when it is intended to mislead an automobile liability insurer.

    ## 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 6. Loss [520 - 580] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Notice and Proofs of Loss [550 - 557.5] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 557. It is a misdemeanor for any person alone or in concert to prepare or make any bid or other writing which falsely purports to be a bona fide offer to repair a damaged motor vehicle or any other damaged property, with the intent that the same be used for the purpose of fraudulently leading an automobile liability insurer to believe: (a) That a bid of some other person represents an offer made in open competition; or (b) That the policy provisions of such insurer governing bids for the repair of vehicles or other property insured under the policy have been complied with in good faith. (Added by Stats. 1959, Ch. 1907.)
  162. 557.5.

    ## 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 6. Loss [520 - 580] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Notice and Proofs of Loss [550 - 557.5] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    Some emergency-vehicle drivers must report accident information to their insurer within 10 days, and employers cannot require that report in one situation.

    ## 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 6. Loss [520 - 580] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Notice and Proofs of Loss [550 - 557.5] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 557.5. (a) A peace officer, member of the Department of the California Highway Patrol, or firefighter shall not be required to report, nor shall any employer of the same be authorized to request or require that a peace officer, member of the Department of the California Highway Patrol, or firefighter report, any accident in which he or she is involved while operating an authorized emergency vehicle, as defined in subdivision (a), (b), or (f) of Section 165 of the Vehicle Code, or any employer-leased or employer-rented vehicle in the performance of his or her duty during the hours of his or her employment, to any person who has issued that peace officer, member of the California Highway Patrol, or firefighter a private automobile insurance policy. (b) (1) Notwithstanding any other provision of law or any provision in a private passenger motor vehicle owner’s automobile liability insurance policy, in the event of a loss or injury that occurs as the result of an accident during any time period when that private passenger motor vehicle is operated by an employee who is a peace officer, member of the Department of the California Highway Patrol, or firefighter and is used by him or her at the request or direction of the employer in the performance of the employee’s duty, the vehicle’s owner shall have no liability. The peace officer, member of the Department of the California Highway Patrol, or firefighter shall report and provide, within 10 days of the accident, to his or her private automobile insurer all documentation and information known to him or her related to the accident. The employer shall be considered the owner of the vehicle for the purpose of any liability and defense of the claim, and any losses shall be borne solely by the employer. (2) Notwithstanding any other provision of law, the employer shall assume liability for and defense of a claim in which a dispute exists as to whether the employer directed or requested the employee to use the private passenger motor vehicle when the loss occurred that gave rise to the claim. (3) If it is subsequently determined that the employer did not direct or request the employee to use the private passenger motor vehicle when the loss occurred, the employer and employee shall provide notice to the private passenger motor vehicle’s insurer of this determination and provide all documentation and information known to him or her related to the claim or loss to the private passenger motor vehicle’s insurer within 10 days of the determination. The private passenger motor vehicle insurer that insures the vehicle shall reimburse the employer the reasonable costs of defense to the extent of the insurer’s obligation and up to the coverage limits under the applicable automobile liability insurance policy. (4) A good faith delay by an employee in reporting the accident to his or her private passenger motor vehicle liability insurer, under the circumstances described in this section, shall not be used by the insurer as a basis to claim delayed reporting, noncooperation, prejudice, or the like as a means of avoiding the defense or indemnity obligations that would otherwise exist under the terms of the automobile liability insurance policy or applicable law in the absence of delayed reporting. This subdivision shall apply only if the employee complies with requirements set forth in paragraphs (1) and (3). (5) This subdivision shall not apply to the operation of a private passenger motor vehicle when operated by an employee, otherwise subject to this section, for the purposes of reporting to or from his or her regularly assigned work location. (c) As used in this section: (1) “Peace officer” means every person defined in Chapter 4.5 (commencing with Section 830) of Title 3 of Part 2 of the Penal Code. (2) “Policy” shall have the same meaning as defined in subdivision (a) of Section 660. (3) “Private passenger motor vehicle” or “private motor vehicle” means a motor vehicle that is insured under a personal automobile liability insurance policy insuring a single individual or individuals residing in the same household as the named insured, but does not include a vehicle with less than four wheels. (Amended by Stats. 2012, Ch. 823, Sec. 2. (AB 2298) Effective January 1, 2013.)
  163. 560.

    ## 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 6. Loss [520 - 580] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment of Automobile Collision Repairs [560- 560.] ( Article 4 added by Stats. 1971, Ch. 798. )

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    Insurers must pay covered automobile collision or physical damage repair claims promptly after receiving the completed itemized bill, and they generally cannot withhold payment just because the insured chooses not to repair the vehicle.

    ## 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 6. Loss [520 - 580] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment of Automobile Collision Repairs [560- 560.] ( Article 4 added by Stats. 1971, Ch. 798. ) ## 560. (a) An insurer that issues a policy providing automobile collision coverage, as defined in subdivision (d) of Section 660, or automobile physical damage coverage, as defined in subdivision (c) of Section 660, shall, if a covered automobile is damaged by collision or otherwise and the insurer knows that the automobile will be repaired by the repairer, make payment by check or draft, payable to the repairer or to the named insured and the repairer, jointly, or, with the consent of the repairer, by an electronic funds transfer to the repairer, not later than 10 days subsequent to receipt of an itemized bill or invoice covering repairs authorized by the insurer which have been satisfactorily completed. This section applies if the insured has received actual notice that the repairer is doing work pursuant to a contract approved by the insurance company and, in that case, the payment shall include the name of the repairer. (b) (1) This section does not limit the right of an insured to select, or prohibit an insured from selecting, the auto body repair shop or other repair facility to repair the damaged vehicle, as described in Section 758.5, nor does it limit the right of an insured to decide, or prohibit an insured from deciding, not to have the vehicle repaired. If the insured decides not to have the vehicle repaired, the insurer shall not withhold the payment of reasonable repair cost benefits that are otherwise payable under the policy. (2) This section does not prohibit an insurer from restricting payment in cases of suspected fraud or from including a named loss payee or lienholder as an additional payee on the claims payment check or draft, to the degree the insurance policy permits the loss payee or lienholder to be added as additional payee on the claims payment check or draft. (3) This section does not prohibit an insurer from requiring that a damaged vehicle be repaired as a condition for payment if the damage to the vehicle is sufficiently serious that safety features that are part of the vehicle’s operating systems are compromised. (Amended by Stats. 2019, Ch. 132, Sec. 1. (AB 1538) Effective January 1, 2020.)
  164. 570.

    ## 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 6. Loss [520 - 580] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Certain Insurance Covering Real Property [570 - 572] ( Article 5 added by Stats. 1974, Ch. 288. )

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    An insurer covered by this section must pay the contractor directly, not the property owner, for covered repair or reconstruction work, unless the insurer already obtained a release on the loss.

    ## 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 6. Loss [520 - 580] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Certain Insurance Covering Real Property [570 - 572] ( Article 5 added by Stats. 1974, Ch. 288. ) ## 570. Except in the event that the insurer has previously obtained a release on a loss, each insurer which issues, amends, or renews, on or after January 1, 1975, a policy of insurance covering repair or reconstruction work on commercial, industrial, or residential real property and appurtenances thereon, shall, in the event of covered work being performed by a licensee under the Contractors License Law (Chapter 9 (commencing with Section 7000) of Division 3 of the Business and Professions Code), make payment by check or draft directly to the contractor performing the work, or, with the consent of the contractor, by an electronic funds transfer to the contractor performing the work, and not to the owner of the property, in every case in which all of the following conditions are present and the insurer has actual knowledge thereof: (a) The property owner of record has, in a writing signed by him and transmitted to the insurer, stated all of the following: (1) The work completed meets with his satisfaction. (2) The insurer, upon direct payment to the contractor, is released from liability. (3) The writing was not completed or signed by him until after all work was completed. (b) The property owners of record, the named insured, and any loss payee have consented in writing to such direct payment and release from liability. (c) The completed work has been certified by the appropriate public agency or authority as conforming to existing building, electrical, and construction codes. (d) Each subcontractor of the contractor, and each materialman, to whom direct payment is to be made by the insurer has executed, and filed of record, releases of any and all claims, including, but not limited to, mechanic’s liens, which the subcontractor and materialman might have against the property or any appurtenance thereof, the property owners of record, the named insured, and any loss payee named in the policy, for any work the subcontractor performed, or material the materialman furnished, upon the property under the contract for which such payment is being made. The property owner or the contractor, as the case may be, shall submit to the insurer proof, satisfactory to it, of such execution and filing prior to the insurer’s making any direct payment provided for by this article. (Amended by Stats. 2009, Ch. 433, Sec. 5. (AB 328) Effective January 1, 2010.)
  165. 571.

    ## 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 6. Loss [520 - 580] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Certain Insurance Covering Real Property [570 - 572] ( Article 5 added by Stats. 1974, Ch. 288. )

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    If the insurer authorized the work and its liability is not disputed, it must make the direct payment under Section 570 to the contractor within 30 days after it learns the Section 570 conditions have been completed.

    ## 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 6. Loss [520 - 580] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Certain Insurance Covering Real Property [570 - 572] ( Article 5 added by Stats. 1974, Ch. 288. ) ## 571. Where the insurer has authorized the work and its liability is not in dispute, the direct payment provided for by Section 570 shall be made to the contractor performing the work not later than 30 days after the insurer has actual knowledge that the conditions of subdivisions (a) through (d) of Section 570 have been completed. (Added by Stats. 1975, Ch. 281.)
  166. 572.

    ## 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 6. Loss [520 - 580] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Certain Insurance Covering Real Property [570 - 572] ( Article 5 added by Stats. 1974, Ch. 288. )

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    In this article, “loss payee” includes any mortgagee of the insured real property.

    ## 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 6. Loss [520 - 580] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Certain Insurance Covering Real Property [570 - 572] ( Article 5 added by Stats. 1974, Ch. 288. ) ## 572. As used in this article, the term “loss payee” shall include, but not be limited to, any mortgagee of the insured real property. (Added by Stats. 1975, Ch. 281.)
  167. 580.

    ## 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 6. Loss [520 - 580] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Electronic Payment of Claims [580- 580.] ( Article 6 added by Stats. 2009, Ch. 433, Sec. 6. )

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    An insurer may pay a loss by electronic funds transfer if the insured consents, and it may not require that consent.

    ## 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 6. Loss [520 - 580] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Electronic Payment of Claims [580- 580.] ( Article 6 added by Stats. 2009, Ch. 433, Sec. 6. ) ## 580. Every insurer required to make payment for a loss, may, with the consent of the insured, make payment by an electronic funds transfer. An insurer may not require an insured to consent to payment by an electronic funds transfer. (Added by Stats. 2009, Ch. 433, Sec. 6. (AB 328) Effective January 1, 2010.)
  168. 590.

    ## 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 7. Double Insurance [590 - 591] ( Chapter 7 enacted by Stats. 1935, Ch. 145. )

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    This section defines double insurance as a situation where the same person is insured separately by several insurers for the same subject and interest.

    ## 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 7. Double Insurance [590 - 591] ( Chapter 7 enacted by Stats. 1935, Ch. 145. ) ## 590. A double insurance exists where the same person is insured by several insurers separately in respect to the same subject and interest. (Enacted by Stats. 1935, Ch. 145.)
  169. 591.

    ## 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 7. Double Insurance [590 - 591] ( Chapter 7 enacted by Stats. 1935, Ch. 145. )

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    In double insurance, insurers share losses according to the rules in this section, with special rules for fire and marine insurance.

    ## 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 7. Double Insurance [590 - 591] ( Chapter 7 enacted by Stats. 1935, Ch. 145. ) ## 591. In case of double insurance, the several insurers are liable to pay losses thereon as follows: (a) In fire insurance, each insurer shall contribute ratably, without regard to the dates of the several policies. (b) In marine insurance, the liability of the several insurers for a total loss, whether actual or constructive, where the policies are not simultaneous, is in the order of the dates of the several policies. No liability attaches to a second or other subsequent policy, except as to the excess of the loss over the amount of all previous policies on the same interest. If two or more policies bear the same date, they are deemed to be simultaneous, and each insurer on simultaneous policies shall contribute ratably. The insolvency of any of the insurers does not affect the proportionate liability of the other insurers. All insurers on the same marine interest shall contribute ratably for a partial or average loss. (Enacted by Stats. 1935, Ch. 145.)
  170. 6.

    ## Insurance Code - INS ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1935, Ch. 145. )

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    Section headings and similar headings in this code do not control or change the meaning, scope, or intent of the provisions.

    ## Insurance Code - INS ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1935, Ch. 145. ) ## 6. Division, part, chapter, article, and section headings contained herein shall not be deemed to govern, limit, modify or in any manner affect the scope, meaning, or intent of the provisions of any division, part, chapter, article, or section hereof. (Enacted by Stats. 1935, Ch. 145.)
  171. 6010.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. The Policy [6010 - 6021] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    This section sets the standard county mutual fire insurer policy form and lists key policy conditions, exclusions, claims steps, cancellation rules, and suit deadlines.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. The Policy [6010 - 6021] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 6010. (a) The following is adopted as the standard form of county mutual fire insurer’s policy for this state: California Standard Form of County Fire Insurance Policy No. (Space for insertion of name of company or companies issuing the policy and other matter permitted to be stated at the head of the policy.) (Space for listing amounts of insurance, rates and premiums for the basic coverages insured under the standard form of policy and for additional coverages or perils insured under endorsements attached.) In consideration of the provisions and stipulations herein or added hereto, of the obligations herein and in the application, and of ____ dollars premium this company, for the term of ________ from the day of , 20____ ⎱ at 12:01 a.m., to the day of , 20____ ⎰ standard time, at location of property involved, to an amount not exceeding ____ dollars, does accept as a member and insure ____ and legal representatives, to the extent of the actual cash value of the property at the time of loss, but not exceeding the amount which it would cost to repair or replace the property with material of like kind and quality within a reasonable time after such loss, without allowance for any increased cost of repair or reconstruction by reason of any ordinance or law regulating construction or repair, and without compensation for loss resulting from interruption of business or manufacture, nor in any event for more than the interest of the insured, against all LOSS BY FIRE, LIGHTNING AND BY REMOVAL FROM PREMISES ENDANGERED BY THE PERILS INSURED AGAINST IN THIS POLICY, EXCEPT AS HEREINAFTER PROVIDED, to the property described hereinafter while located or contained as described in this policy, or pro rata for five days at each proper place to which any of the property shall necessarily be removed for preservation from the perils insured against in this policy, but not elsewhere. For a more particular description, and as forming a part of this policy, reference is had to application No. ___ on file in the office of this company. This policy is made and accepted subject to the foregoing provisions and stipulations and those hereinafter stated, which are hereby made a part of this policy, together with such other provisions, stipulations and agreements as may be added hereto, as provided in this policy. The charter and bylaws of this company are to be resorted to and used to explain the rights and obligations of the parties hereto in all cases not herein otherwise specially provided for, and are hereby made a part of this policy. This policy is made and accepted upon the above expressed condition. IN WITNESS WHEREOF, this company has executed and attested these presents; but this policy shall not be valid unless countersigned by the duly authorized secretary of this company at ____. _____ Secretary. _____ _____ President. _____ Countersigned this day of , 20____. Secretary. Concealment, fraud This entire policy shall be void if, whether before or after a loss, the insured has willfully concealed or misrepresented any material fact or circumstance concerning this insurance or the subject thereof, or the interest of the insured therein, or in case of any fraud or false swearing by the insured relating thereto. Uninsurable and excepted property This policy shall not cover accounts, bills, currency, deeds, evidences of debt, money or securities; nor, unless specifically named hereon in writing, bullion or manuscripts. Perils not included This company shall not be liable for loss by fire or other perils insured against in this policy caused, directly or indirectly, by: (a) enemy attack by armed forces, including action taken by military, naval or air forces in resisting an actual or an immediately impending enemy attack; (b) invasion; (c) insurrection; (d) rebellion; (e) revolution; (f) civil war; (g) usurped power; (h) order of any civil authority except acts of destruction at the time of and for the purpose of preventing the spread of fire; provided, that such fire did not originate from any of the perils excluded by this policy; (i) neglect of the insured to use all reasonable means to save and preserve the property at and after a loss, or when the property is endangered by fire in neighboring premises; (j) nor shall this company be liable for loss by theft. Other insurance Other insurance may be prohibited or the amount of insurance may be limited by endorsement attached hereto. Conditions suspending or restricting insurance Unless otherwise provided in writing added hereto this company shall not be liable for loss occurring (a) while the hazard is increased by any means within the control or knowledge of the insured; or (b) while a described building, whether intended for occupancy by owner or tenant, is vacant or unoccupied beyond a period of 60 consecutive days; or (c) as a result of explosion or riot, unless fire ensue, and in that event for loss by fire only. Other perils or subjects Any other peril to be insured against or subject of insurance to be covered in this policy shall be by endorsement in writing hereon or added hereto. Added provisions The extent of the application of insurance under this policy and of the contribution to be made by this company in case of loss, and any other provision or agreement not inconsistent with the provisions of this policy, may be provided for in writing added hereto, but no provision may be waived except such as by the terms of this policy or by statute is subject to change. Waiver provisions No permission affecting this insurance shall exist, or waiver of any provision be valid, unless granted herein or expressed in writing added hereto. No provision, stipulation or forfeiture shall be held to be waived by any requirement or proceeding on the part of this company relating to appraisal or to any examination provided for herein. Cancellation of policy This policy may be canceled and the insured as a member of this company may withdraw therefrom by the insured surrendering the policy for cancellation at any time during the life of the policy and while the company continues the business for which it was organized, by giving notice in writing to the company and by paying such obligations as may have accrued against the insured on the day of cancellation. This policy may be canceled at any time by this company by giving to the insured 20 days’ written notice of cancellation with or without tender of the excess of paid premium above the pro rata premium for the expired time, which excess, if not tendered, shall be refunded on demand. Notice of cancellation shall state that said excess premium (if not tendered) will be refunded on demand. If the reason for cancellation is nonpayment of premium, this policy may be canceled by this company by giving to the insured a 10 days’ written notice of cancellation. Assignment This company may give its consent in writing allowing the assignment of this policy upon the bona fide sale of the property insured herein; provided, within 30 days from the transfer of the title to the within property and upon the assignment thereof such purchaser or his or her agent signs an agreement becoming a member and accepting the conditions of the within policy; otherwise this policy to be null and void, except as to holders of a mortgage or deed of trust. Mortgagee interests and obligations If loss hereunder is made payable, in whole or in part, to a designated mortgagee not named herein as the insured, such interest in this policy may be canceled by giving to such mortgagee a 10 days’ written notice of cancellation. If the insured fails to render proof of loss such mortgagee, upon notice, shall render proof of loss in the form herein specified within 60 days thereafter and shall be subject to the provisions hereof relating to appraisal and time of payment and of bringing suit. If this company shall claim that no liability existed as to the mortgagor or owner, it shall, to the extent of payment of loss to the mortgagee, be subrogated to all the mortgagee’s rights of recovery, but without impairing mortgagee’s right to sue; or it may pay off the mortgage debt and require an assignment thereof and of the mortgage. Other provisions relating to the interests and obligations of such mortgagee may be added hereto by agreement in writing. Pro rata liability This company shall not be liable for a greater proportion of any loss than the amount hereby insured shall bear to the whole insurance covering the property against the peril involved, whether collectible or not. Requirements in case loss occurs The insured shall give written notice to this company of any loss without unnecessary delay, protect the property from further damage, forthwith separate the damaged and undamaged personal property, put it in the best possible order, furnish a complete inventory of the destroyed, damaged and undamaged property, showing in detail quantities, costs, actual cash value and amount of loss claimed; and within 60 days after the loss, unless such time is extended in writing by this company, the insured shall render to this company a proof of loss, signed and sworn to by the insured, stating the knowledge and belief of the insured as to the following: The time and origin of the loss, the interest of the insured and of all others in the property, the actual cash value of each item thereof and the amount of loss thereto, all encumbrances thereon, all other contracts of insurance, whether valid or not, covering any of said property, any changes in the title, use, occupation, location, possession or exposures of said property since the issuing of this policy, by whom and for what purpose any building herein described and the several parts thereof were occupied at the time of loss and whether or not it then stood on leased ground, and shall furnish a copy of all the descriptions and schedules in all policies and, if required and obtainable, verified plans and specifications of any building, fixtures or machinery destroyed or damaged. The insured, as often as may be reasonably required, shall exhibit to any person designated by this company all that remains of any property herein described, and submit to examinations under oath by any person named by this company, and subscribe the same; and, as often as may be reasonably required, shall produce for examination all books of account, bills, invoices and other vouchers, or certified copies thereof if originals be lost, at such reasonable time and place as may be designated by this company or its representative, and shall permit extracts and copies thereof to be made. Appraisal In case the insured and this company shall fail to agree as to the actual cash value or the amount of loss, then, on the written demand of either, each shall select a competent and disinterested appraiser and notify the other of the appraiser selected within 20 days of such demand. The appraisers shall first select a competent and disinterested umpire; and failing for 15 days to agree upon such umpire, then, on request of the insured or this company, such umpire shall be selected by a judge of a court of record in the state in which the property covered is located. The appraisers shall then appraise the loss, stating separately actual cash value and loss to each item; and, failing to agree, shall submit their differences, only, to the umpire. An award in writing, so itemized, of any two when filed with this company shall determine the amount of actual cash value and loss. Each appraiser shall be paid by the party selecting him or her and the expenses of appraisal and umpire shall be paid by the parties equally. Company’s options It shall be optional with this company to take all, or any part, of the property at the agreed or appraised value, and also to repair, rebuild or replace the property destroyed or damaged with other of like kind and quality within a reasonable time, on giving notice of its intention so to do within 30 days after the receipt of the proof of loss herein required. Abandonment There can be no abandonment to this company of any property. When loss payable Except where assessment is required as hereinafter provided, the amount of loss for which this company may be liable shall be payable 60 days after proof of loss, as herein provided, is received by this company and ascertainment of the loss is made either by agreement between the insured and this company expressed in writing or by the filing with this company of an award as herein provided. Assessment for deficiency When the amount of any loss shall have been ascertained, which exceeds in amount the cash funds of the company, the president shall convene the directors of this company, who shall proceed in the manner provided by Article 8 (commencing with Section 7010) of Chapter 5 of Part 1 of Division 2 of the Insurance Code. Notice of assessment It shall be the duty of the secretary, whenever assessment shall have been made, to immediately notify every person holding a risk in this company, personally, by an agent, or by letter directed to the person’s usual post office address, of the amount of such loss, and the sum due from him or her, as his or her share thereof, and of the time and to whom such payment is made; but such time shall not be less than 30 days, nor more than 90 days from date of such notice. No assessment or assessments can be levied under this policy in excess of three times the premium named herein. Action for neglect or refusal to pay assessments An action may be brought against the member whose property is insured herein and this policy is automatically suspended if the insured shall not have paid, before it is delinquent, the insured’s portion of any assessment levied or other liability due this company for a period in excess of 90 days. The directors of this company who shall willfully refuse or neglect to perform the duties imposed upon them by law or the bylaws of the company, shall be liable in their individual capacity to the person sustaining such loss. An action may also be brought and maintained against this company by members thereof for losses sustained if payment is withheld after the amount of such losses have been determined and is due by the terms of the policy. Suit No suit or action on this policy for the recovery of any claim shall be sustainable in any court of law or equity unless all the requirements of this policy shall have been complied with, and unless commenced within 12 months next after inception of the loss. If the loss is related to a state of emergency, as defined in subdivision (b) of Section 8558 of the Government Code, the time limit to bring suit is extended to 24 months after inception of the loss. Subrogation This company may require from the insured an assignment of all right of recovery against any party for loss to the extent that payment therefor is made by this company. (b) The amendments to this section made by the act adding this subdivision shall govern a policy utilizing the form provided in subdivision (a) when that policy is originated or renewed on or after January 1, 2004. (c) (1) The amendments to this section made by the act adding this subdivision govern a policy originated or renewed on or after the effective date of this act. (2) Notwithstanding paragraph (1), an insurer shall incorporate the revisions to the standard form of county mutual fire insurer’s policy made by the act adding this subdivision on or before July 1, 2019. (Amended by Stats. 2018, Ch. 639, Sec. 2. (AB 2594) Effective September 21, 2018.)
  172. 6010.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. The Policy [6010 - 6021] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    The policy does not have to be used for reinsurance between insurers.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. The Policy [6010 - 6021] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 6010.5. The policy is not required to be used for reinsurance between insurers. (Added by Stats. 1949, Ch. 697.)
  173. 6011.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. The Policy [6010 - 6021] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    The standard policy blanks or attached endorsement blanks must be filled in appropriately. The first page or an endorsement may also be formatted as a schedule, and if that schedule clearly shows the amount at risk, rate, and premium for fire insurance, the words “the above specified” may be inserted in specified blanks.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. The Policy [6010 - 6021] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 6011. Either the blanks in the standard form or those in an endorsement attached thereto shall be appropriately filled. The first page of the policy or an endorsement attached thereto may be arranged to show in schedule form the amounts of insurance, rates and premiums for the basic coverages insured under the standard form of policy and additional coverages or perils insured under endorsements attached, and such other data as may be conveniently included for duplication on daily reports for office records. If such a schedule clearly shows the amount at risk, the rate, and the premium in respect of fire insurance, the words, “the above specified” may be inserted in the blanks preceding the word “dollars” in the two places in which “dollars” appears in that portion of the standard form which precedes the countersignature clause, or in identical blanks in an endorsement attached to the standard form and containing the paragraph in the standard form in which the blanks appear. (Amended by Stats. 1949, Ch. 697.)
  174. 6011.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. The Policy [6010 - 6021] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    A standard form policy may use any clear format to state the coverage term, instead of the Section 6010 form.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. The Policy [6010 - 6021] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 6011.5. In lieu of showing the term of coverage in the form set forth in Section 6010, the standard form policy may show the term in any form which clearly states the period during which the insurance is to continue. The period shall begin and end on specified dates at 12:01 a.m., standard time, at the location of the property involved. An example of permissible method of showing the term is: “ for the term of _____ from At 12:01 a.m. (Standard Time) to At 12:01 a.m. (Standard Time) at location of property involved, ” _____ (Amended by Stats. 1972, Ch. 618.)
  175. 6011.6.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. The Policy [6010 - 6021] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    A standard form policy may include specified wording instead of the Section 6010 attestation clause and signatures, but the policy is not valid unless countersigned by the company’s duly authorized secretary.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. The Policy [6010 - 6021] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 6011.6. In lieu of the attestation clause and official signatures in the form as set forth in Section 6010, the standard form policy may show, immediately following the policy provisions, the following: “In witness whereof, this company has executed and attested these presents; but this policy shall not be valid unless countersigned by the duly authorized secretary of this company at ______. Secretary President” (Added by Stats. 1953, Ch. 460.)
  176. 6012.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. The Policy [6010 - 6021] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    A special agreement endorsed on the policy or added to it may waive appraisement or apportionment of loss and may set property valuations in advance for a total loss.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. The Policy [6010 - 6021] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 6012. By special agreement indorsed on the policy or added thereto, the provisions regarding appraisement or apportionment of loss may be waived and the valuations of all or any of the insured property in case of total loss may be agreed upon in advance of loss. (Enacted by Stats. 1935, Ch. 145.)
  177. 6013.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. The Policy [6010 - 6021] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    The standard policy form must be plainly printed, with minimum type-size and legibility requirements, and later lines must be numbered consecutively.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. The Policy [6010 - 6021] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 6013. The standard form of policy shall be plainly printed. The type shall not be smaller than eight-point and in a style not less legible than Century and subheads shall be in type larger than eight-point and in a style not less legible than Century. The lines of the policy following the countersignature clause shall be numbered consecutively. (Amended by Stats. 1953, Ch. 460.)
  178. 6014.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. The Policy [6010 - 6021] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    County mutual fire insurance policies for subject matter in this state must use the county mutual standard form, with no additions unless this article allows them, and no omissions unless Section 6017 allows them.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. The Policy [6010 - 6021] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 6014. All county mutual fire insurance policies on subject matter in this State shall be on the county mutual standard form and, except as provided by this article, shall not contain additions thereto. Except as provided in Section 6017, no part of the standard form shall be omitted from the policy. (Amended by Stats. 1945, Ch. 146.)
  179. 6015.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. The Policy [6010 - 6021] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    The insurer may add certain information to the policy.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. The Policy [6010 - 6021] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 6015. The insurer may add to the policy any matter relating to its financial condition, directors, officers, members and history, and the address of its home office and principal office in the State. (Enacted by Stats. 1935, Ch. 145.)
  180. 6016.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. The Policy [6010 - 6021] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    A policy may include clauses that define the rights, duties, and obligations of mortgagees, assignees, and other parties with an interest in the insured property.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. The Policy [6010 - 6021] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 6016. Clauses may be added to the policy providing for and defining the rights, duties and obligations of mortgagees, assignees, and other parties having an interest in, right to or lien upon the insured subject matter. (Enacted by Stats. 1935, Ch. 145.)
  181. 6017.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. The Policy [6010 - 6021] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    Certain insurers may change the standard policy form to carry out a permitted limit or elimination of assessment liability under this chapter.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. The Policy [6010 - 6021] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 6017. Insurers authorized to limit or eliminate their assessment liability in accordance with the terms of this chapter may make such changes in the standard form as will properly accomplish that purpose. (Amended by Stats. 1945, Ch. 146.)
  182. 6017.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. The Policy [6010 - 6021] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    Certain insurers may use the California standard form insurance policy instead of the standard form required by this chapter.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. The Policy [6010 - 6021] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 6017.5. Insurers authorized to eliminate their assessment liability in accordance with the terms of this chapter may use the California standard form insurance policy in lieu of the standard form prescribed in this chapter. (Added by Stats. 1959, Ch. 1553.)
  183. 6018.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. The Policy [6010 - 6021] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    A clause or rider affecting the insurer’s standard fire-loss liability cannot be added unless it is specially printed in red ink or large capital type, and the policy heading must also carry a specified warning in red ink and bold type.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. The Policy [6010 - 6021] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 6018. No clause shall be inserted nor rider attached affecting the standard form liability of the insurer for loss or damage by fire occasioned either directly or indirectly by earthquake, hurricane, volcanic action or other disturbance of nature, unless such rider or clause is printed in red ink in type larger than pica or in capital letters measuring not less than eight one-hundredths (8/100's) of an inch in height, and unless there is printed at the head of the policy in red ink and in large bold-faced type the words: “This policy contains limitations of liability not permitted in the California standard form.” (Amended by Stats. 1949, Ch. 697.)
  184. 6019.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. The Policy [6010 - 6021] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    The policy may include extra clauses for uncovered property or risks, but nuclear-related loss or damage can be covered only by a written endorsement attached to the standard policy.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. The Policy [6010 - 6021] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 6019. Clauses may be added to the policy: (a) Covering property and risks not otherwise covered; provided that clauses covering loss or damage caused by nuclear reaction, nuclear radiation or radioactive contamination, all whether directly or indirectly resulting from an insured peril under the standard policy issued pursuant to Section 6010 may be insured under said policy only by a written endorsement providing such insurance, with such endorsement affixed to said standard policy. (b) Assuming greater liability than is otherwise imposed on the insurer. (c) Granting the insured permits and privileges not otherwise provided. (d) Waivers of any of the matters voiding the policy or suspending the insurance. (e) Waivers of any of the requirements imposed on the insured after loss. (Amended by Stats. 1959, Ch. 1101.)
  185. 6020.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. The Policy [6010 - 6021] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    Except as otherwise provided by this article, clauses may be attached to the policy by separate riders in specified larger type, and those clauses may impose duties and obligations on the insured and limit the insurer’s liability.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. The Policy [6010 - 6021] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 6020. Except as otherwise provided by this article, clauses may be attached, by separate riders in type larger than pica or in capital letters measuring not less than eight one-hundredths (8/100's) of an inch in height, to the policy, imposing specified duties and obligations upon the insured and limiting the liability of the insurer. (Amended by Stats. 1949, Ch. 697.)
  186. 6021.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. The Policy [6010 - 6021] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    An insurer or its agent must not countersign or issue a county mutual fire insurance policy for subject matter in this State if doing so violates this article.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. The Policy [6010 - 6021] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 6021. It is a misdemeanor for any insurer or its agent to countersign or issue a county mutual fire insurance policy covering in whole or part subject-matter in this State in violation of this article. Any policy so issued shall notwithstanding be binding upon the issuing insurer. (Enacted by Stats. 1935, Ch. 145.)
  187. 6040.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Risks [6040 - 6050] ( Article 5 enacted by Stats. 1935, Ch. 145. )

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    A county mutual fire insurer may issue policies covering certain listed buildings and related property.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Risks [6040 - 6050] ( Article 5 enacted by Stats. 1935, Ch. 145. ) ## 6040. Such insurer may issue policies on dwellings, schoolhouses, churches, fraternal or lodge halls, community, creamery, or farm buildings and property contained in or on such premises or owned by the insured and stored in public or private warehouses. (Amended by Stats. 1955, Ch. 1904.)
  188. 6040.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Risks [6040 - 6050] ( Article 5 enacted by Stats. 1935, Ch. 145. )

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    Insurers covered by this chapter are not limited by Section 6040 in what types of risks they may insure.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Risks [6040 - 6050] ( Article 5 enacted by Stats. 1935, Ch. 145. ) ## 6040.5. Insurers authorized to eliminate their assessment liability in accordance with the terms of this chapter (commencing with Section 5050) shall not be restricted as to the type of risks they may insure by the provisions of Section 6040. (Added by Stats. 1961, Ch. 464.)
  189. 6041.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Risks [6040 - 6050] ( Article 5 enacted by Stats. 1935, Ch. 145. )

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    Insurance under this chapter stays in force when covered personal property is used or transported in the ordinary course of the insured’s affairs, if the property’s primary situs at the time of loss is in this state.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Risks [6040 - 6050] ( Article 5 enacted by Stats. 1935, Ch. 145. ) ## 6041. Insurance permitted by this chapter upon personal property owned by the insured, including automobiles and livestock, shall continue in full force and effect during the use or transportation of the property in the ordinary course of the insured’s affairs if the primary situs of the property is located at the time of loss within this State. Otherwise such insurance is governed by Section 6048. (Amended by Stats. 1961, Ch. 463.)
  190. 6042.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Risks [6040 - 6050] ( Article 5 enacted by Stats. 1935, Ch. 145. )

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    Policies may be made for up to five years, but not longer than the insurer is allowed to exist.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Risks [6040 - 6050] ( Article 5 enacted by Stats. 1935, Ch. 145. ) ## 6042. Policies may be executed for any time not exceeding five years and not extending beyond the time limited for the existence of the insurer. (Enacted by Stats. 1935, Ch. 145.)
  191. 6043.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Risks [6040 - 6050] ( Article 5 enacted by Stats. 1935, Ch. 145. )

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    Members of a county mutual fire insurer must agree in writing to pay their share of covered expenses and losses, and must also pay required estimated-cost percentages and other charges when the insurance is issued.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Risks [6040 - 6050] ( Article 5 enacted by Stats. 1935, Ch. 145. ) ## 6043. All members of such an insurer shall agree in writing to pay their pro rata share to the insurer of the necessary expense and loss sustained by any member thereof during the time for which their respective policies are in force. They shall also, at the time of effecting the insurance, pay the insurer such percentage of the estimated cost and such other charges as are required by law or the insurer’s rules and by-laws. (Amended by Stats. 1939, Ch. 931.)
  192. 6044.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Risks [6040 - 6050] ( Article 5 enacted by Stats. 1935, Ch. 145. )

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    These insurers must classify the insured subject matter when issuing policies.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Risks [6040 - 6050] ( Article 5 enacted by Stats. 1935, Ch. 145. ) ## 6044. All such insurers shall classify the subject matter insured by them at the time of issuing policies thereon. Such classification shall be under rates corresponding as nearly as practicable to the greater or less risk from loss attached to the several kinds of subject matter insured. (Amended by Stats. 1939, Ch. 931.)
  193. 6045.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Risks [6040 - 6050] ( Article 5 enacted by Stats. 1935, Ch. 145. )

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    This section defines several terms used in the chapter, including “a city or town block,” “closely built up district,” “one risk,” and “clear space.”

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Risks [6040 - 6050] ( Article 5 enacted by Stats. 1935, Ch. 145. ) ## 6045. For the purpose of this chapter: (a) “A city or town block” is an area of not more than one hundred sixty thousand square feet having at least one frontage in a closely built up district fronting on a used public highway, surrounded on all sides by a clear space at least equal in width to the clear space of such public highway. (b) “Closely built up district” means territory abutting a public highway where for not less than a quarter of a mile the buildings average less than one hundred feet apart. (c) “One risk” means one hazard under one or more policies, subject to one fire and relates to the amount named in the policy or policies. (d) “Clear space” means space free from combustible material likely to communicate fire. (Enacted by Stats. 1935, Ch. 145.)
  194. 6047.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Risks [6040 - 6050] ( Article 5 enacted by Stats. 1935, Ch. 145. )

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    County mutual fire insurers generally may not write more than $6,000 on one risk unless they immediately reinsure the excess, but they can write limited extra amounts if they meet the stated insurance-volume conditions.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Risks [6040 - 6050] ( Article 5 enacted by Stats. 1935, Ch. 145. ) ## 6047. Except as provided in this section, such insurer shall not issue policies to an amount in excess of six thousand dollars ($6,000) on any one risk, whether under one or more policies, without immediately reinsuring the excess amount in some other insurer. Any such insurer having more than ten million dollars ($10,000,000) direct insurance in force as shown by its books may, for each one million dollars ($1,000,000) in excess of ten million dollars ($10,000,000), write five hundred dollars ($500) additional insurance in excess of six thousand dollars ($6,000) on each such risk; provided, however, that any such insurer 90 percent of whose business in force is reinsurance assumed and which has more than ten million dollars ($10,000,000) gross insurance in force may, for each one million dollars ($1,000,000) in excess of ten million dollars ($10,000,000), write five hundred dollars ($500) additional insurance in excess of six thousand dollars ($6,000) on each such risk. Any such insurer issuing nonassessable policies as provided in Section 7015 (c) (3) hereof, may issue policies in accordance with Section 3080 of this code. (Amended by Stats. 1953, Ch. 459.)
  195. 6048.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Risks [6040 - 6050] ( Article 5 enacted by Stats. 1935, Ch. 145. )

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    A county mutual fire insurer may insure only property in its organizing county or a next-adjoining county, with a further exception for a contiguous county if the prior condition is met.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Risks [6040 - 6050] ( Article 5 enacted by Stats. 1935, Ch. 145. ) ## 6048. Except as provided in Section 6041 such insurer shall insure only property within the limits of the county wherein it is organized, or in a county next adjoining the county of organization. In the event that no such insurer may, under the provisions of the preceding sentence, insure property in a county contiguous to the said next adjoining county, then such insurer may also insure property in the said contiguous county. (Amended by Stats. 1955, Ch. 817.)
  196. 6049.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Risks [6040 - 6050] ( Article 5 enacted by Stats. 1935, Ch. 145. )

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    A county mutual fire insurer may not assume certain risks on property in closely built-up blocks or inside an incorporated city unless it immediately reinsures the excess amount.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Risks [6040 - 6050] ( Article 5 enacted by Stats. 1935, Ch. 145. ) ## 6049. Such an insurer shall not assume any risks on property situated within any one block of a closely built-up district or of territory within the limit of any incorporated city, unless on a single risk in such block it immediately reinsures all of the amount at risk which is in excess of the limit provided in this article or unless in the case of more than one risk in any such block it immediately reinsures all of the amount at risk which is in excess of one-quarter of 1 percent of its direct amount of insurance in force; provided, however, that any such insurer 90 percent of whose business in force is reinsurance assumed, and which has more than ten million dollars ($10,000,000) gross insurance in force, in the case of more than one risk in any such block, shall immediately reinsure all of the amount at risk which is in excess of one-quarter of 1 percent of its net amount of insurance in force. (Amended by Stats. 1953, Ch. 1390.)
  197. 6050.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Risks [6040 - 6050] ( Article 5 enacted by Stats. 1935, Ch. 145. )

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    An insurer cannot write more insurance on certain country property when its existing policies already reach the article limit, and the protected radius must stay at least 75 feet during the policy term unless reinsured.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Risks [6040 - 6050] ( Article 5 enacted by Stats. 1935, Ch. 145. ) ## 6050. Where the amount of insurance in policies already written equals the amount limited by the provisions of this article, no additional insurance shall be written by such insurer on country property within a radius of one hundred feet of an existing risk. Such radius shall continue at not less than seventy-five feet during the life of the policy, unless insurance within the radius is covered by reinsurance. (Enacted by Stats. 1935, Ch. 145.)
  198. 6070.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Reinsurance [6070 - 6072] ( Article 6 enacted by Stats. 1935, Ch. 145. )

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    A county mutual fire insurer may accept reinsurance from certain other county mutual fire insurers or from an authorized insurer wholly owned by county mutual insurers, but the accepted reinsurance cannot exceed the risk retained by the insurer that originated the business.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Reinsurance [6070 - 6072] ( Article 6 enacted by Stats. 1935, Ch. 145. ) ## 6070. Any such insurer may accept reinsurance under any agreement for reinsurance between two or more county mutual fire insurers or from any authorized insurer the stock of which is wholly owned by county mutual insurers. In any such case the reinsurance accepted by any one insurer shall not exceed the amount of risk retained by the insurer originating the business. (Amended by Stats. 1953, Ch. 468.)
  199. 6071.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Reinsurance [6070 - 6072] ( Article 6 enacted by Stats. 1935, Ch. 145. )

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    An insurer may cede reinsurance if it keeps enough risk and cash amount in the originating insurer, subject to minimum-retention limits and a cap on the minimum required amount.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Reinsurance [6070 - 6072] ( Article 6 enacted by Stats. 1935, Ch. 145. ) ## 6071. Any such insurer may cede reinsurance provided the amount retained by the originating insurer shall be not less than 10 percent nor less than five hundred dollars ($500); provided, however, that the minimum required hereunder shall never exceed six thousand dollars ($6,000). The applicable provisions of Sections 922.1 to 922.8 inclusive shall govern for the purposes of testing the solvency and preparing the annual statement of the ceding insurer. (Amended by Stats. 1953, Ch. 468.)
  200. 6072.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Reinsurance [6070 - 6072] ( Article 6 enacted by Stats. 1935, Ch. 145. )

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    The chapter’s restrictions for original insurance also apply to reinsurance written by any insurer.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Reinsurance [6070 - 6072] ( Article 6 enacted by Stats. 1935, Ch. 145. ) ## 6072. The restrictions imposed by this chapter upon any insurer as to original insurance shall apply to reinsurance written by it. (Enacted by Stats. 1935, Ch. 145.)

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