Insurance Code — Part 20 | INS — United States — California law | Esheria

Insurance Code

Part 20 of 23 · provisions 3,801–4,000

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

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This section defines “underwriters’ corps” for this chapter. This chapter must not impair or interfere with the powers or duties of a municipality’s regular fire department. An owner of property cannot treat an underwriters’ corps act as a justification for abandoning the property. Certain domestic insurance-underwriter corporations may maintain an underwriter’s corps at their own expense if they meet the stated fire-prevention and local-business conditions. An underwriter’s corps may enter certain burning or fire-exposed buildings and may remove or protect property from fire or water damage while a fire is happening and immediately after.

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Provisions of Insurance Code

Showing 200 of 4,461

  1. 6090.

    ## 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 7. Loss [6090 - 6091] ( Article 7 enacted by Stats. 1935, Ch. 145. )

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    A covered member who suffers a loss must immediately notify the 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 7. Loss [6090 - 6091] ( Article 7 enacted by Stats. 1935, Ch. 145. ) ## 6090. Every member of such insurer who sustains loss by any hazard covered by his policy shall immediately notify the insurer in accordance with the terms of his policy. (Enacted by Stats. 1935, Ch. 145.)
  2. 6091.

    ## 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 7. Loss [6090 - 6091] ( Article 7 enacted by Stats. 1935, Ch. 145. )

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    Members of a county mutual fire insurer may bring and keep an action against the insurer to recover insured losses when payment is withheld after the loss amount is determined and due under 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 7. Loss [6090 - 6091] ( Article 7 enacted by Stats. 1935, Ch. 145. ) ## 6091. An action may be brought and maintained against any such insurer by its members to recover for losses insured against by the insurer, if payment is withheld after the amount of such losses is determined, and is due by the terms of the policy. (Enacted by Stats. 1935, Ch. 145.)
  3. 620.

    ## 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 8. Reinsurance [620 - 623] ( Chapter 8 enacted by Stats. 1935, Ch. 145. )

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    A reinsurance contract is one where an insurer gets another person to insure it against loss or liability from the original 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 8. Reinsurance [620 - 623] ( Chapter 8 enacted by Stats. 1935, Ch. 145. ) ## 620. A contract of reinsurance is one by which an insurer procures a third person to insure him against loss or liability by reason of such original insurance. (Enacted by Stats. 1935, Ch. 145.)
  4. 621.

    ## 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 8. Reinsurance [620 - 623] ( Chapter 8 enacted by Stats. 1935, Ch. 145. )

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    Reinsurance is presumed to be a contract that indemnifies against liability, not just against damage.

    ## 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 8. Reinsurance [620 - 623] ( Chapter 8 enacted by Stats. 1935, Ch. 145. ) ## 621. A reinsurance is presumed to be a contract of indemnity against liability, and not merely against damage. (Enacted by Stats. 1935, Ch. 145.)
  5. 622.

    ## 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 8. Reinsurance [620 - 623] ( Chapter 8 enacted by Stats. 1935, Ch. 145. )

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    If an insurer obtains reinsurance, it must tell the reinsurer all representations of the original insured and all material knowledge and information it has, including later-acquired information.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Reinsurance [620 - 623] ( Chapter 8 enacted by Stats. 1935, Ch. 145. ) ## 622. Where an insurer obtains reinsurance, he must communicate all the representations of the original insured, and also all the knowledge and information he possesses, whether previously or subsequently acquired, which are material to the risk. (Enacted by Stats. 1935, Ch. 145.)
  6. 623.

    ## 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 8. Reinsurance [620 - 623] ( Chapter 8 enacted by Stats. 1935, Ch. 145. )

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    The original insured has no interest in a reinsurance contract.

    ## 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 8. Reinsurance [620 - 623] ( Chapter 8 enacted by Stats. 1935, Ch. 145. ) ## 623. The original insured has no interest in a contract of reinsurance. (Enacted by Stats. 1935, Ch. 145.)
  7. 650.

    ## 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 9. Rescission [650 - 651] ( Chapter 9 enacted by Stats. 1935, Ch. 145. )

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    An insurer may rescind an insurance contract before a lawsuit on the contract begins, if a rescission right is given by this part.

    ## 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 9. Rescission [650 - 651] ( Chapter 9 enacted by Stats. 1935, Ch. 145. ) ## 650. Whenever a right to rescind a contract of insurance is given to the insurer by any provision of this part such right may be exercised at any time previous to the commencement of an action on the contract. The rescission shall apply to all insureds under the contract, including additional insureds, unless the contract provides otherwise. (Amended by Stats. 1983, Ch. 389, Sec. 1.)
  8. 651.

    ## 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 9. Rescission [650 - 651] ( Chapter 9 enacted by Stats. 1935, Ch. 145. )

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    If an insurer rescinds an automobile liability policy, it must give the insured a statement of the grounds for rescission within 15 days after the driver requests 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 9. Rescission [650 - 651] ( Chapter 9 enacted by Stats. 1935, Ch. 145. ) ## 651. Whenever an insurer gives notice of rescission of an automobile liability policy, upon request of the driver, the insurer, within 15 days of receipt of the request, shall furnish to the insured a statement setting forth the ground or grounds upon which the notice of rescission is based. There shall be no liability on the part of, and no cause of action shall arise against, any insurer or authorized representative, or its licensed investigative sources, for any statements made by them in a written notice required to be given pursuant to this section. If the insurer fails to comply with the provisions of this section, the insured may apply to the commissioner for a certificate of the facts or information desired. Any such request shall be made in accordance with Article 3 (commencing with Section 12950) of Chapter 2 of Division 3, and the commissioner shall exercise any power conferred upon him by that article as may be necessary to ensure compliance with this section. (Amended by Stats. 2008, Ch. 107, Sec. 1. Effective January 1, 2009.)
  9. 655.

    ## 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 9.5. Filing of Certificates [655- 655.] ( Chapter 9.5 added by Stats. 1972, Ch. 356. )

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    Certain insurers must complete and file the certificate or certificates required by Vehicle Code Section 16431.

    ## 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 9.5. Filing of Certificates [655- 655.] ( Chapter 9.5 added by Stats. 1972, Ch. 356. ) ## 655. Every insurer issuing policies of motor vehicle liability insurance within the meaning of Section 16450 of the Vehicle Code, automobile liability insurance within the meaning of Section 16054 of that code, or any other liability insurance issued for vehicles with less than four wheels that meets the requirements of Section 16056 of that code shall also, as an incident thereto, complete and file the certificate or certificates provided for under Section 16431 of that code. The proof required by this section may be provided by the filing of a single certificate. (Amended by Stats. 1991, Ch. 1177, Sec. 1. Effective October 14, 1991.)
  10. 657.

    ## 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 9.6. Reasons for Denial of Motor Vehicle Liability Insurance [657 - 658] ( Chapter 9.6 added by Stats. 1977, Ch. 914. )

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    If an insurer or licensed insurance agent refuses a motor vehicle liability policy application or refuses to issue the policy after a written application, they must give the applicant a written explanation if the applicant asks in writing within 30 days.

    ## 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 9.6. Reasons for Denial of Motor Vehicle Liability Insurance [657 - 658] ( Chapter 9.6 added by Stats. 1977, Ch. 914. ) ## 657. (a) Where any admitted insurer, licensed to issue motor vehicle liability policies as defined in Section 16450 of the Vehicle Code, or any licensed insurance agent refuses to accept an application for such a policy or refuses to issue such a policy when a written application has been made, the refusing agent or refusing insurer shall furnish to the applicant for insurance a written statement explaining the reason or reasons relied upon for such action if within 30 days of such refusal the applicant requests in writing, from the agent or insurer who has refused to accept the application or to issue the policy, such a written explanation. Such statement shall be furnished within 30 days of receipt of such request. (b) Any insurer or agent willfully violating any provisions of this section is guilty of a misdemeanor and is punishable by a fine not exceeding one thousand dollars ($1,000) for each violation thereof. (c) There shall be no liability on the part of, and no cause of action of any nature shall arise against, the Insurance Commissioner or against any insurer, its authorized representative, its agents, its employees, or any firm, person or corporation furnishing to the insurer information as to the reasons for such a refusal, for any statement made by any of them in any written notice of reasons for refusing to accept the application or issue the policy or in any other communication, oral or written, specifying the reasons for such action or the providing of the information pertaining thereto, or for statements made or evidence submitted in any hearings conducted in connection therewith. (Amended by Stats. 1983, Ch. 1092, Sec. 177. Effective September 27, 1983. Operative January 1, 1984, by Sec. 427 of Ch. 1092.)
  11. 658.

    ## 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 9.6. Reasons for Denial of Motor Vehicle Liability Insurance [657 - 658] ( Chapter 9.6 added by Stats. 1977, Ch. 914. )

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    If an admitted insurer rejects a good driver discount application or refuses to issue the policy, and the applicant qualifies, the insurer must give the applicant a written reason within 10 days.

    ## 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 9.6. Reasons for Denial of Motor Vehicle Liability Insurance [657 - 658] ( Chapter 9.6 added by Stats. 1977, Ch. 914. ) ## 658. Where any admitted insurer, licensed to issue motor vehicle liability policies as defined in Section 16450 of the Vehicle Code, refuses to accept an applicant for a good driver discount policy as defined in paragraph (1) of subdivision (b) of Section 1861.02 or refuses to issue a good driver discount policy when written application has been made, and where the applicant meets the criteria for purchase of a good driver discount policy, the refusing insurer shall furnish the applicant for insurance a written statement within 10 days of the refusal explaining the reason or reasons relied upon for denying insurance coverage. Notwithstanding Section 1633.3 of the Civil Code, the written statement explaining the reason or reasons for denying the coverage may not be electronically delivered to the applicant unless the application for the good driver discount was electronically delivered to the insurer. (Amended by Stats. 2009, Ch. 433, Sec. 7. (AB 328) Effective January 1, 2010.)
  12. 660.

    ## 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 10. Cancellation or Failure to Renew [660 - 669.5] ( Chapter 10 repealed and added by Stats. 1968, Ch. 137. )

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    This section defines terms used in the chapter on cancellation or failure to renew for certain automobile insurance 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 10. Cancellation or Failure to Renew [660 - 669.5] ( Chapter 10 repealed and added by Stats. 1968, Ch. 137. ) ## 660. As used in this chapter: (a) “Policy” means an automobile liability, automobile physical damage, or automobile collision policy, or any combination thereof, delivered or issued for delivery in this state, insuring a single individual or individuals residing in the same household, as named insured, and under which the insured vehicles therein designated are of the following types only: (1) A motor vehicle of the private passenger or station wagon type that is not used as a public or livery conveyance for passengers, nor rented to others; or (2) Any other four-wheel motor vehicle with a load capacity of 1,500 pounds or less; provided, however, that this chapter shall not apply to any of the following: (A) Any policy issued under an automobile assigned risk plan. (B) Any policy insuring more than four automobiles. (C) Any policy covering garage, automobile sales agency, repair shop, service station, or public parking place operation hazards. (3) A motorcycle. (b) “Automobile liability coverage” includes only coverage of bodily injury and property damage liability, medical payments, and uninsured motorists coverage. (c) “Automobile physical damage coverage” includes all coverage of loss or damage to an automobile insured under the policy except loss or damage resulting from collision or upset. (d) “Automobile collision coverage” includes all coverage of loss or damage to an automobile insured under the policy resulting from collision or upset. (e) “Renewal” or “to renew” means to continue coverage with either the insurer which issued the policy or an affiliated insurer, as defined in Section 1215, for an additional policy period upon expiration of the current policy period of a policy, provided that if coverage is continued with an affiliated insurer, it shall be the same or broader coverage as provided by the present insurer, and the insured shall be notified in writing at least 20 days prior to expiration of the current policy period of all of the following: (1) That the insurer has determined that it will not offer renewal of the policy with the present insurer. (2) That it is offering replacement in an affiliated insurer. (3) That the insured may obtain in writing the reasons for the change in insurers if he or she requests in writing not later than one month following the expiration of the policy period the reason or reasons for the change in insurers. Any policy with a policy period or term of six months or less, whether or not made continuous for successive terms upon the payment of additional premiums, shall, for the purpose of this chapter be considered as if written for a policy period or term of six months. Any policy written for a term longer than one year, or any policy with no fixed expiration date, shall for the purpose of this chapter, be considered as if written for successive policy periods or terms of one year. (f) “Nonpayment of premium” means failure of the named insured to discharge when due any of his obligations in connection with the payment of premiums on a policy, or any installment of such premium, whether the premium is payable directly to the insurer or its agent or indirectly under any premium finance plan or extension of credit. (g) “Cancellation” means termination of coverage by an insurer (other than termination at the request of the insured) during a policy period. (h) “Nonrenewal” means a notice by the insurer to the named insured that the insurer is unwilling to renew a policy. (i) “Expiration” means termination of coverage by reason of the policy having reached the end of the term for which it was issued or the end of the period for which a premium has been paid. (Amended by Stats. 2016, Ch. 304, Sec. 1. (AB 2884) Effective January 1, 2017.)
  13. 661.

    ## 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 10. Cancellation or Failure to Renew [660 - 669.5] ( Chapter 10 repealed and added by Stats. 1968, Ch. 137. )

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    A policy cancellation notice is effective only if it is based on one of the listed reasons; the section also says a small deductible change is not cancellation and the section does not apply to nonrenewal.

    ## 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 10. Cancellation or Failure to Renew [660 - 669.5] ( Chapter 10 repealed and added by Stats. 1968, Ch. 137. ) ## 661. (a) A notice of cancellation of a policy shall be effective only if it is based on one or more of the following reasons: (1) Nonpayment of premium. (2) The driver’s license or motor vehicle registration of the named insured or of any other operator who either resides in the same household or customarily operates an automobile insured under the policy has been under suspension or revocation during the policy period or, if the policy is a renewal, during its policy period or the 180 days immediately preceding its effective date. (3) Discovery of fraud by the named insured in pursuing a claim under the policy provided the insurer does not rescind the policy. (4) Discovery of material misrepresentation of any of the following information concerning the named insured or any resident of the same household who customarily operates an automobile insured under the policy: (A) Safety record. (B) Annual miles driven in prior years. (C) Number of years of driving experience. (D) Record of prior automobile insurance claims, if any. (E) Any other factor found by the commissioner to have a substantial relationship to the risk of loss. Any insured who negligently misrepresents information described in this paragraph may avoid cancellation by furnishing corrected information to the insurer within 20 days after receiving notice of cancellation and agreeing to pay any difference in premium for the policy period in which the information remained undisclosed. (5) A substantial increase in the hazard insured against. (b) Modification of automobile physical damage coverage by the inclusion of a deductible not exceeding one hundred dollars ($100) shall not be deemed a cancellation of the coverage or of the policy. (c) This section shall not apply to nonrenewal. (Amended by Stats. 2012, Ch. 786, Sec. 5. (AB 2303) Effective January 1, 2013.)
  14. 662.

    ## 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 10. Cancellation or Failure to Renew [660 - 669.5] ( Chapter 10 repealed and added by Stats. 1968, Ch. 137. )

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    An insurer must give advance notice before cancelling a policy, with shorter notice allowed for nonpayment of premium, and it may send lienholder notices electronically if the lienholder consents.

    ## 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 10. Cancellation or Failure to Renew [660 - 669.5] ( Chapter 10 repealed and added by Stats. 1968, Ch. 137. ) ## 662. (a) (1) A notice of cancellation of a policy shall not be effective unless mailed or delivered by the insurer to the named insured, lienholder, or additional interest at least 20 days prior to the effective date of cancellation; provided, however, that where cancellation is for nonpayment of premium, at least 10 days’ notice of cancellation after nonpayment of premium due by the specified due date accompanied by the reason for the cancellation shall be given. Unless the reason accompanies or is included in the notice of cancellation, the notice of cancellation shall state or be accompanied by a statement that upon written request of the named insured, mailed or delivered to the insurer not less than 15 days prior to the effective date of cancellation, the insurer will specify the reason for the cancellation. (2) A cancellation based on nonpayment of premium shall only be effective on the date specified in the notice if the insured has not cured the nonpayment of premium due identified in the notice by the end of the 10-day period. (b) This section shall not apply to nonrenewal. (c) Notices made to lienholders pursuant to this section may be done electronically with the consent of the lienholder. (Amended by Stats. 2024, Ch. 793, Sec. 1. (SB 1295) Effective January 1, 2025.)
  15. 662.1.

    ## 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 10. Cancellation or Failure to Renew [660 - 669.5] ( Chapter 10 repealed and added by Stats. 1968, Ch. 137. )

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    A notice of cancellation can be enough to end the parties’ interest if it is mailed or delivered at least the required number of days before termination, and lienholders or additional interests cannot demand a stricter notice form.

    ## 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 10. Cancellation or Failure to Renew [660 - 669.5] ( Chapter 10 repealed and added by Stats. 1968, Ch. 137. ) ## 662.1. Proof of mailing or delivery of a notice of cancellation to a lienholder or an additional interest on a policy to which this chapter applies shall be sufficient to terminate the interest of the parties provided the notice is mailed or delivered at least the maximum number of days prior to termination of the parties’ interest as required by Section 662. For purposes of this section, “delivery” includes electronic transmittal or facsimile or personal delivery. No lienholder or additional interest shall require a more restrictive form of notice. (Amended by Stats. 1993, Ch. 401, Sec. 1. Effective January 1, 1994.)
  16. 663.

    ## 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 10. Cancellation or Failure to Renew [660 - 669.5] ( Chapter 10 repealed and added by Stats. 1968, Ch. 137. )

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    An insurer must send the named insured a renewal offer or nonrenewal notice before policy expiration, with specific 20-day or 30-day timing rules.

    ## 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 10. Cancellation or Failure to Renew [660 - 669.5] ( Chapter 10 repealed and added by Stats. 1968, Ch. 137. ) ## 663. (a) Before policy expiration, an insurer shall deliver to or mail to the named insured, at the address shown on the policy, one of the following: (1) At least 20 days before expiration, a written or verbal offer of renewal of the policy, contingent upon payment of premium as stated in the offer. (2) At least 30 days before expiration, a written notice of nonrenewal of the policy, including the statement required by Section 666. (b) (1) An insurer that delivers a verbal offer to renew that is declined by an insured shall, at least 20 days before expiration of the policy, deliver to or mail to the named insured, at the address shown on the policy, a written confirmation of the offer and rejection. (2) An insurer that attempts to satisfy subdivision (a) with a verbal offer to renew, but is unable to contact the named insured directly at least 20 days before policy expiration, shall, at least 20 days before policy expiration, deliver to or mail to the named insured, at the address shown on the policy, a written offer to renew the policy, contingent upon payment of premium as stated in the offer. (c) In the event that an insurer fails to give the named insured either an offer of renewal or notice of nonrenewal as required by this section, the existing policy, with no change in its terms and conditions, shall remain in effect for 30 days from the date that either the offer to renew or the notice of nonrenewal is delivered or mailed to the named insured. A notice to this effect shall be provided by the insurer to the named insured with the policy or the notice of renewal or nonrenewal. Notwithstanding the failure of an insurer to comply with this section, the policy shall terminate on the effective date of any other replacement or succeeding automobile insurance policy procured by the insured, or his agent or broker, with respect to any automobile designated in both policies. (d) The insurer shall not be required to notify the named insured, or any other insured, of nonrenewal of the policy if the insurer has mailed or delivered a notice of expiration or cancellation, on or prior to the 30th day preceding expiration of the policy period. (e) This section shall become operative on January 1, 2019. (Repealed (in Sec. 6) and added by Stats. 2013, Ch. 369, Sec. 7. (SB 251) Effective January 1, 2014. Section operative January 1, 2019, by its own provisions.)
  17. 663.5.

    ## 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 10. Cancellation or Failure to Renew [660 - 669.5] ( Chapter 10 repealed and added by Stats. 1968, Ch. 137. )

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    An insurer may not refuse to renew a policy just because the insured is older or because a claim is pending.

    ## 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 10. Cancellation or Failure to Renew [660 - 669.5] ( Chapter 10 repealed and added by Stats. 1968, Ch. 137. ) ## 663.5. (a) No insurer shall fail to renew a policy solely on the basis of the age of the insured. (b) On and after January 1, 2000, no insurer shall fail to renew a policy solely on the grounds that a claim is pending under the policy. This subdivision shall not be construed to limit an insurer’s ability to nonrenew a policy based upon a directive from the commissioner for solvency or other financially related issues. This subdivision shall not be construed to limit an insurer’s right to cancel a policy pursuant to Section 676. (Amended by Stats. 1999, Ch. 313, Sec. 1. Effective January 1, 2000.)
  18. 664.

    ## 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 10. Cancellation or Failure to Renew [660 - 669.5] ( Chapter 10 repealed and added by Stats. 1968, Ch. 137. )

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    Proof that a cancellation or nonrenewal notice was mailed to the named insured at the policy address or latest known address is sufficient proof of notice.

    ## 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 10. Cancellation or Failure to Renew [660 - 669.5] ( Chapter 10 repealed and added by Stats. 1968, Ch. 137. ) ## 664. Proof of mailing of notice of cancellation, or of intention not to renew or of reasons for cancellation, to the named insured at the address shown in the policy or to the named insured’s latest known address, shall be sufficient proof of notice. (Repealed and added by Stats. 1968, Ch. 137.)
  19. 664.5.

    ## 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 10. Cancellation or Failure to Renew [660 - 669.5] ( Chapter 10 repealed and added by Stats. 1968, Ch. 137. )

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    If an insurer requires periodic physical exams as a condition of renewal, it must pay for those exams unless it chooses to rely on certified written results from a recent exam instead.

    ## 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 10. Cancellation or Failure to Renew [660 - 669.5] ( Chapter 10 repealed and added by Stats. 1968, Ch. 137. ) ## 664.5. Any insurer who requires periodic physical examinations of an insured as a condition of renewal of a policy shall pay the cost of such physical examinations, except that an insurer shall not pay any cost if it elects to accept the certified written results of an insured’s physical examination voluntarily conducted within 12 months preceding the policy expiration or renewal date. (Added by Stats. 1975, Ch. 296.)
  20. 665.

    ## 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 10. Cancellation or Failure to Renew [660 - 669.5] ( Chapter 10 repealed and added by Stats. 1968, Ch. 137. )

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    When certain automobile liability policies are canceled or not renewed, the insurer must notify the named insured about possible eligibility for the automobile liability assigned risk plan.

    ## 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 10. Cancellation or Failure to Renew [660 - 669.5] ( Chapter 10 repealed and added by Stats. 1968, Ch. 137. ) ## 665. When a policy of automobile liability insurance is canceled, other than for nonpayment of premium, or in the event of failure to renew a policy of automobile liability insurance to which Section 663 applies, the insurer shall notify the named insured of his possible eligibility for automobile liability insurance through the automobile liability assigned risk plan. Such notice shall accompany or be included in the notice of cancellation or the notice of intent not to renew. (Added by Stats. 1968, Ch. 137.)
  21. 666.

    ## 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 10. Cancellation or Failure to Renew [660 - 669.5] ( Chapter 10 repealed and added by Stats. 1968, Ch. 137. )

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    If an insured asks in writing, the insurer must give the reason for a cancellation in writing and send it within 5 days; electronic delivery is not allowed unless the insured made the request electronically.

    ## 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 10. Cancellation or Failure to Renew [660 - 669.5] ( Chapter 10 repealed and added by Stats. 1968, Ch. 137. ) ## 666. Where the reason for cancellation does not accompany or is not included in the notice of cancellation, the insurer shall upon written request of the named insured, mailed or delivered to the insurer not less than 15 days prior to the effective date of cancellation, specify in writing the reason for the cancellation. The reason shall be mailed or delivered to the named insured within five days after receipt of the request. Notwithstanding Section 1633.3 of the Civil Code, the writing specifying the reason for cancellation may not be delivered electronically to the insured unless the insured electronically delivered the request to the insurer. (Amended by Stats. 2009, Ch. 433, Sec. 9. (AB 328) Effective January 1, 2010.)
  22. 667.

    ## 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 10. Cancellation or Failure to Renew [660 - 669.5] ( Chapter 10 repealed and added by Stats. 1968, Ch. 137. )

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    This section gives immunity from liability and lawsuits for specified people and entities when they make statements or provide information about cancellation or nonrenewal.

    ## 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 10. Cancellation or Failure to Renew [660 - 669.5] ( Chapter 10 repealed and added by Stats. 1968, Ch. 137. ) ## 667. There shall be no liability on the part of, and no cause of action of any nature shall arise against, the Insurance Commissioner or against any insurer, its authorized representative, its agents, its employees, or any firm, person, or corporation furnishing to the insurer information as to reasons for cancellation or nonrenewal, for any statement made by any of them in any written notice of cancellation or nonrenewal, or in any other communication, oral or written, specifying the reasons for cancellation or nonrenewal, or the providing of information pertaining thereto, or for statements made or evidence submitted at any hearings conducted in connection therewith. (Amended by Stats. 1969, Ch. 227.)
  23. 667.5.

    ## 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 10. Cancellation or Failure to Renew [660 - 669.5] ( Chapter 10 repealed and added by Stats. 1968, Ch. 137. )

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    An insurer’s cancellation or policy change requested by the named insured is binding, and notice must be mailed or delivered to the named insureds listed on the declarations page unless the policy 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 10. Cancellation or Failure to Renew [660 - 669.5] ( Chapter 10 repealed and added by Stats. 1968, Ch. 137. ) ## 667.5. Unless a policy specifically provides otherwise, the cancellation of a policy, or any change in the policy, executed by an insurer, at the request of the named insured designated on the declarations page of the policy, shall be binding upon any other insured or named insured. Notice of cancellation or an endorsement evidencing the named insured’s request shall be mailed or delivered to the address stated in the policy to all individuals or to all entities designated as named insureds on the declarations page of the policy. (Added by Stats. 1985, Ch. 1266, Sec. 1.)
  24. 668.

    ## 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 10. Cancellation or Failure to Renew [660 - 669.5] ( Chapter 10 repealed and added by Stats. 1968, Ch. 137. )

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    Section 663 does not apply to liability insurance policies issued under assigned risk plans.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Cancellation or Failure to Renew [660 - 669.5] ( Chapter 10 repealed and added by Stats. 1968, Ch. 137. ) ## 668. Section 663 shall not apply to policies of liability insurance issued pursuant to assigned risk plans. (Added by Stats. 1968, Ch. 595.)
  25. 669.

    ## 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 10. Cancellation or Failure to Renew [660 - 669.5] ( Chapter 10 repealed and added by Stats. 1968, Ch. 137. )

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    An insurer that willfully violates Section 663 commits a misdemeanor and can be fined up to $1,000 for each violation.

    ## 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 10. Cancellation or Failure to Renew [660 - 669.5] ( Chapter 10 repealed and added by Stats. 1968, Ch. 137. ) ## 669. Any insurer willfully violating any provisions of Section 663 is guilty of a misdemeanor and is punishable by a fine of not exceeding one thousand dollars ($1,000) for each violation thereof. (Amended by Stats. 1983, Ch. 1092, Sec. 178. Effective September 27, 1983. Operative January 1, 1984, by Sec. 427 of Ch. 1092.)
  26. 669.5.

    ## 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 10. Cancellation or Failure to Renew [660 - 669.5] ( Chapter 10 repealed and added by Stats. 1968, Ch. 137. )

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    An insurer must not refuse to renew certain private auto policies because the insured had an accident while driving an authorized emergency vehicle during duty hours.

    ## 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 10. Cancellation or Failure to Renew [660 - 669.5] ( Chapter 10 repealed and added by Stats. 1968, Ch. 137. ) ## 669.5. No insurer shall fail to renew any private automobile insurance policy of a peace officer, member of the California Highway Patrol, or firefighter, with respect to his or her operation of a private motor vehicle, for the reason that the insured has been involved in an accident while operating an authorized emergency vehicle, as defined in subdivision (a) of Section 165 of the Vehicle Code or in paragraph (1) or (2) of subdivision (b) or (f) of Section 165 of the Vehicle Code, in the performance of his or her duty during the hours of his or her employment. As used in this section, “peace officer” means every person defined in Chapter 4.5 (commencing with Section 830) of Title 3 of Part 2 and Section 830.6 of the Penal Code, and “firefighter” means every person defined in Section 50925 of the Government Code. In the case of a volunteer firefighter, this section applies to the regular employer of the volunteer firefighter to the extent that the involvement of the volunteer firefighter in the accident shall not be cause for the employer’s insurer’s decision to renew the employer’s insurance policy as it applies to the employee covered by this section. (Amended by Stats. 1993, Ch. 1098, Sec. 5.5. Effective January 1, 1994.)
  27. 669.7.

    ## 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 10.1. Certain Automobile Insurance [669.7- 669.7.] ( Chapter 10.1 added by Stats. 1998, Ch. 136, Sec. 1. )

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    An insurer may issue certain automobile policies in this state for a single individual or people in the same household, including vehicles with load capacity over 1,500 pounds, despite Section 660.

    ## 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 10.1. Certain Automobile Insurance [669.7- 669.7.] ( Chapter 10.1 added by Stats. 1998, Ch. 136, Sec. 1. ) ## 669.7. Notwithstanding Section 660, an insurer may deliver or issue an automobile liability, automobile physical damage, or automobile collision policy in this state insuring a single individual or individuals residing in the same household, as named insured, and under which the insured vehicle is a motor vehicle with a load capacity exceeding 1,500 pounds. (Added by Stats. 1998, Ch. 136, Sec. 1. Effective January 1, 1999.)
  28. 670.

    ## 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 10.2. Prohibited Cancellations [670- 670.] ( Chapter 10.2 added by Stats. 1973, Ch. 788. )

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    An admitted insurer licensing motor vehicle liability policies must not cancel or refuse to renew a policy, or execute a related agreement, because hired drivers were convicted of covered traffic or Vehicle Code violations committed in private passenger vehicles not owned or leased by their employer.

    ## 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 10.2. Prohibited Cancellations [670- 670.] ( Chapter 10.2 added by Stats. 1973, Ch. 788. ) ## 670. (a) No admitted insurer licensed to issue motor vehicle liability policies, as defined in Section 16450 of the Vehicle Code, shall cancel, or refuse to renew, a motor vehicle liability insurance policy covering drivers hired to drive by a commercial business establishment nor execute the agreement specified in paragraph (1) of subdivision (d) of Section 11580.1 with respect to those drivers for the reason that those drivers have been convicted of violations of the Vehicle Code or the traffic laws of any subdivision of the state that were committed while operating private passenger vehicles not owned or leased by their employer. (b) This section does not apply to drivers convicted of any of the following: (1) Homicide or assault arising out of the operation of a private passenger motor vehicle. (2) A violation while operating a private passenger motor vehicle of any of the following sections or section subdivisions of the Vehicle Code: (A) Subdivision (a) of Section 14601. (B) Subdivision (a) of Section 14601.1. (C) Subdivision (a) of Section 14601.2. (D) Section 20001 or 20002. (E) Subdivision (a) of Section 20008. (F) Section 23104 or 23105. (G) Subdivision (c) of Section 23152. (H) Section 23153. (3) A violation, while operating a private passenger motor vehicle, of subdivision (a) or (b) of Section 23152 of the Vehicle Code punishable under Section 23540 or 23546 of the Vehicle Code. (Amended by Stats. 2007, Ch. 682, Sec. 3. Effective January 1, 2008.)
  29. 671.

    ## 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 10.25. Automobile Collision and Comprehensive Coverage [671- 671.] ( Chapter 10.25 added by Stats. 1988, Ch. 1290, Sec. 1. )

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    An insurer may not refuse to issue an automobile collision or comprehensive coverage policy just because the car is older, if the car’s market value is over $2,500.

    ## 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 10.25. Automobile Collision and Comprehensive Coverage [671- 671.] ( Chapter 10.25 added by Stats. 1988, Ch. 1290, Sec. 1. ) ## 671. No insurer issuing an automobile collision policy, as defined in Section 660, or a policy for comprehensive coverage for an automobile, as defined in Section 11580.07, shall refuse to issue the policy of insurance, or the policy in combination with other coverages, when the refusal is based solely on the age of the automobile to be insured, if the market value of the automobile exceeds two thousand five hundred dollars ($2,500). This section does not apply to any policy which includes coverage for losses resulting from wear and tear or from normal deterioration of an automobile or its component parts, nor to any policy which provides coverage for an antique or classic automobile. (Added by Stats. 1988, Ch. 1290, Sec. 1.)
  30. 672.

    ## 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 10.27. Availability of Cost Estimates [672- 672.] ( Chapter 10.27 added by Stats. 2004, Ch. 765, Sec. 1. )

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    Auto insurers must give eligible consumers a cost estimate for the lowest-priced personal automobile policy and provide a toll-free number or website to help obtain 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 10.27. Availability of Cost Estimates [672- 672.] ( Chapter 10.27 added by Stats. 2004, Ch. 765, Sec. 1. ) ## 672. (a) Every admitted insurer or insurer group licensed to sell automobile insurance shall provide consumers of personal automobile insurance, as described in Section 660, with a cost estimate for its lowest priced personal automobile insurance policy at the limits the consumer has requested and for which the consumer is eligible. (b) The insurer shall meet this requirement by either or both of the following: (1) Maintaining a toll-free telephone number available to consumers in any geographic area in which the insurer is authorized or approved to write business in California. Upon request, the insurer shall provide the consumer with a cost estimate, or shall refer the consumer to an insurer representative or insurance broker-agent who shall, upon request, provide such an estimate based upon information provided by the consumer. The insurer shall make this toll-free number available to the consumer by maintaining a listing in the toll-free telephone directory. (2) Maintaining an Internet Web site where consumers can obtain a cost estimate online, or be referred to an insurer representative or insurance broker-agent who shall, upon request, provide the cost estimate based upon information provided by the consumer. (c) Each insurer shall provide the toll-free number or the Internet Web site address, or both, to the commissioner, who shall make the information available on the department’s Internet Web site and through the department’s consumer toll-free telephone line. (Added by Stats. 2004, Ch. 765, Sec. 1. Effective January 1, 2005.)
  31. 673.

    ## 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 10.3. Cancellation of Policies When Premium Financed [673- 673.] ( Chapter 10.3 added by Stats. 1970, Ch. 573. )

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    This section regulates how a lender or industrial loan company may cancel a premium-financed insurance policy and what notices must be sent.

    ## 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 10.3. Cancellation of Policies When Premium Financed [673- 673.] ( Chapter 10.3 added by Stats. 1970, Ch. 573. ) ## 673. (a) As used in this section, “exercise the right to cancel” means the act of formally electing to use the right of the insured to cancel any insurance policy in accordance with and subject to the provisions of that policy when the right to use that right of the insured has been transferred or assigned by the insured in writing executed by, or on behalf of, the insured to a lender who has advanced to the insurer the premium for the policy. The transfer or assignment may be by power of attorney or other document. The transfer or assignment may, but need not, be accompanied by an assignment of any unearned premium due the insured on cancellation. (b) No lender shall exercise the right to cancel a financed insurance policy because of the default of the insured under a premium payment loan agreement except in accordance with this section. (c) Written notice of the exercise of the right to cancel shall be mailed by the lender to the insurer and to the insured at the address shown on the premium payment loan agreement or his or her last known address, specifying a date five days or more after the date of mailing of such notice as the effective date of cancellation. Any insurer may, in writing delivered to the lender, waive, generally or specifically, the right to receive such notice or notices. A copy of such notice may be mailed to the producer of record if known to the lender, but failure to do so shall not affect any rights granted by this section. This subdivision shall not apply to an industrial loan company. (d) An industrial loan company shall, in giving the insured 10 days’ notice of its intent to cancel pursuant to Section 18608 of the Financial Code, furnish a copy of such notice to the insurance agent or insurance broker indicated on the premium finance agreement. After expiration of the 10-day period, the industrial loan company may thereafter, in the name of the insured, cancel the insurance contract or contracts by mailing to the insurer a written notice of cancellation, and the insurance contract shall be canceled as if the notice of cancellation had been submitted by the insured person, but without requiring the return of the insurance contract or contracts. The industrial loan company shall also mail a notice of cancellation, setting forth the effective date of cancellation of the finance insurance contract, to the insured at his or her last known address and to the insurance agent or insurance broker indicated on the premium finance agreement. For the purposes of this subdivision, the words “premium finance agreement” shall have the same meaning as that specified in Section 18564 of the Financial Code. (e) A written exercise of that right containing a confirmation of the effective date of cancellation shall be mailed by the lender to the insurer within five days following that effective date of cancellation specified in the notice described in subdivision (c) unless the insured has cured any and all defaults. Cancellation shall be effective on the financed insurance policy without requiring the return of the insurance policy or insurance policies, except as provided in subdivisions (f) and (g), on the confirmation date specified in the written exercise of that right. This subdivision shall not apply to an industrial loan company. (f) All statutory, regulatory, and contractual restrictions providing that the financed insurance policy may not be canceled unless notice is given to a governmental agency, mortgagee, or other third party shall apply where cancellation is effected under this section. The insurer shall give the prescribed notice on behalf of itself or the insured to any governmental agency, mortgagee, or other third party on or before the fifth business day after the day it receives the written exercise of cancellation right containing confirmation of the cancellation date from the lender, as provided in subdivision (e), or a written notice of cancellation from an industrial loan company, pursuant to subdivision (d), and shall, for the purpose of the notice, determine the effective date of cancellation as to those persons mentioned in this subdivision only, taking into consideration the number of days’ notice required to complete the cancellation. (g) Whenever such a financed insurance policy is canceled by any party for any reason: (1) The insurer shall, in accordance with the written agreements of which it has notice, return to the lender such unearned premiums as are due to the lender. The amount of the return premiums shall be based upon the confirmed date of cancellation specified in subdivision (e), or upon the written notice of cancellation specified in subdivision (d) in the case of an industrial loan company, lessened by the amount, if any, to compensate equitably the insurer for carrying the risk of loss as to any governmental agency, mortgagee, or other parties specified in subdivision (f) from that date to the effective date of cancellation as to those parties. (2) When a financed insurance policy is canceled, or the insured discontinues payments to a lender, the insurer shall calculate the return premium on a pro rata basis. This paragraph shall not apply to any policy issued under an assigned risk plan or to any policy with respect to which the insurer has made a loan to the insured for the purposes of payment of premiums for the policy. (h) The commissioner may amend the rules and regulations of any assigned risk plan, fair plan, or similar plan to provide for the equitable assignment of insurance risks among insurers now in existence or hereafter established, in such manner as may be necessary to carry out the purposes of this section. (i) A lender which sends a written exercise of cancellation right or a written notice of cancellation to an insurer, as provided in subdivision (c), or subdivision (d) in the case of an industrial loan company, thereby represents that he or she has a valid right to do so and to receive the unearned premium. If the lender thereby accomplishes the cancellation and receives an unearned premium, such representation shall be conclusive as between the insurer and the lender. An insurer relying upon the written exercise of that right containing a confirmation of cancellation date and giving, when applicable, notice as required by subdivision (e), shall be relieved from complying with any other duty or form of cancellation required by this code. (j) This section shall not apply where the insurer exercises its own right to cancel the policy for nonpayment of premium, direct or indirect, or otherwise. Such a cancellation shall be subject to all applicable provisions of the policy, this code, except this section, and any rights of the lender of which the insurer has written notice. (k) Whenever a lender or industrial loan company cancels a policy as described in this section and then requests the insurer to reinstate the policy, the insurer shall provide written notice by mail to the insured, agent/broker, and lender or industrial loan company within 15 days that the reinstatement has been accepted or rejected. (l) This section shall apply only to contracts entered into between an insured and a lender on or after January 1, 1974. (Amended by Stats. 2006, Ch. 740, Sec. 2. Effective January 1, 2007.)
  32. 674.

    ## 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 10.4. Prior Notice Concerning Cancellation or Nonrenewal [674 - 674.9] ( Chapter 10.4 added by Stats. 1977, Ch. 503. )

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    A liability policy for a local public entity or state agency generally cannot be canceled or not renewed unless the named insured gets advance mailed notice, with shorter notice rules for nonrenewal and cancellation and exceptions for certain renewal notices and additional insureds.

    ## 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 10.4. Prior Notice Concerning Cancellation or Nonrenewal [674 - 674.9] ( Chapter 10.4 added by Stats. 1977, Ch. 503. ) ## 674. A policy of liability insurance issued to a local public entity or state agency as a named insured shall not be canceled or renewal of such a policy declined for reasons other than nonpayment of premium unless notice is mailed to the named insured at least 45 days prior to the effective date of nonrenewal or at least 60 days prior to the effective date of cancellation. Such notice need not be sent if a renewal notice stating a premium for an additional period of coverage has been sent the named insured at least 45 days before cancellation or expiration of an existing policy and such premium has not been tendered the insurer before such cancellation or expiration. This section shall not require that notice of cancellation or nonrenewal be given an additional insured added by way of endorsement or certificate of insurance. (Repealed and added by Stats. 1978, Ch. 344.)
  33. 674.5.

    ## 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 10.4. Prior Notice Concerning Cancellation or Nonrenewal [674 - 674.9] ( Chapter 10.4 added by Stats. 1977, Ch. 503. )

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    An insurer may not stop offering a particular class of commercial liability insurance unless it first notifies the commissioner.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10.4. Prior Notice Concerning Cancellation or Nonrenewal [674 - 674.9] ( Chapter 10.4 added by Stats. 1977, Ch. 503. ) ## 674.5. (a) No insurer shall cease to offer any particular class of commercial liability insurance without prior notification to the commissioner. (b) The department shall adopt regulations implementing this section as emergency regulations in accordance with Chapter 3.5 (commencing with Section 11340) of Division 3 of Title 2 of the Government Code, except that for the purposes of Chapter 3.5 (commencing with Section 11340) of Division 3 of Title 2 of the Government Code, any regulations adopted under this section shall be deemed to be necessary for the immediate preservation of the public peace, health and safety, or general welfare. These regulations shall remain in effect for 180 days. Unless the regulation provides for notification by some other classification or category, notification pursuant to this section shall be made for each class of insurance as defined by the Insurance Services Office. (Added by Stats. 1986, Ch. 1329, Sec. 1.)
  34. 674.6.

    ## 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 10.4. Prior Notice Concerning Cancellation or Nonrenewal [674 - 674.9] ( Chapter 10.4 added by Stats. 1977, Ch. 503. )

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    Insurers must give advance notice before dropping or withdrawing from certain lines of coverage, and the commissioner may review the withdrawal’s market impact.

    ## 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 10.4. Prior Notice Concerning Cancellation or Nonrenewal [674 - 674.9] ( Chapter 10.4 added by Stats. 1977, Ch. 503. ) ## 674.6. (a) No insurer issuing policies of insurance subject to Section 674.5 or 675 shall cease to offer any particular line of coverage without prior notification to the commissioner. (b) Except as provided in Section 674.9, an insurer shall notify the department at least 60 days prior to the date it intends to withdraw wholly or substantially from a line of (1) commercial liability insurance, (2) any insurance defined in Section 660 or 675 when coverage is provided by a separate rider or endorsement for an activity for which the insured receives compensation, a stipend, or remuneration of any kind for the activity and then only to the extent of the coverage, (3) any other insurance defined in Section 660, or (4) any insurance issued to an individual or individuals covering a risk not arising from a business or commercial activity. Upon receipt of the notice, the commissioner may request and review additional information, as deemed necessary, and investigate the market conditions to determine whether that insurance may become not readily available in the voluntary insurance market as a result of the withdrawal. (c) For purposes of this section, “intent to substantially withdraw” means an insurer’s intent to nonrenew in excess of 50 percent of its current policyholders in the line of coverage upon their next renewal. (d) The commissioner shall adopt appropriate rules, regulations, and standards for purposes of implementing this section. (e) Any insurer that has notified the commissioner pursuant to subdivision (b) shall (1) notify the commissioner within 10 days after the date given in the withdrawal notice if the insurer does not in fact withdraw that line of insurance from the market, or (2) notify the commissioner within 10 days after reentry if the insurer reenters that line after the withdrawal. (Amended by Stats. 2003, Ch. 899, Sec. 1. Effective January 1, 2004.)
  35. 674.9.

    ## 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 10.4. Prior Notice Concerning Cancellation or Nonrenewal [674 - 674.9] ( Chapter 10.4 added by Stats. 1977, Ch. 503. )

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    Insurers covering certain liability policies must give advance notice before stopping or substantially reducing that coverage and must send periodic reports to the commissioner.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10.4. Prior Notice Concerning Cancellation or Nonrenewal [674 - 674.9] ( Chapter 10.4 added by Stats. 1977, Ch. 503. ) ## 674.9. (a) Notwithstanding subdivision (b) of Section 674.6, an insurer issuing policies of liability insurance to long-term health care facilities, residential care facilities for the elderly, or physicians who provide or oversee the provision of services to residents in long-term health care facilities or residential care facilities for the elderly shall notify the department at least 90 days prior to the date it intends to cease, withdraw, or substantially withdraw from offering liability policies to those facilities or physicians. (b) Each insurer writing liability insurance for long-term health care facilities, residential care facilities for the elderly, or physicians who provide or oversee the provision of services to residents in long-term health care facilities or residential care facilities for the elderly shall, by a date to be set by the commissioner, but not more than once each calendar year, report to the commissioner information specified by him or her regarding liability policies for those facilities or physicians. The information shall include, but not be limited to, the following: (1) Whether the insurer is writing coverage for long-term health care facilities, residential care facilities for the elderly, or physicians who provide or oversee the provision of services to residents in long-term health care facilities or residential care facilities for the elderly, including new and renewal policies, and the types of policies it is writing. (2) The number and types of long-term health care facilities or residential care facilities for the elderly and beds covered. (3) The total amount of premiums from insureds, both written and earned, during the immediately preceding five calendar years. (4) The total number of claims received, including the amount per claim. (5) The number of claims incurred, together with the monetary amount reserved for loss and defense and cost containment expense for the immediately preceding accident year or report year. (6) The number of claims closed with payment during the immediately preceding five calendar years, the total monetary amount paid for loss thereon, reported by the year the claim was incurred, and the total defense and cost containment expense paid thereon, reported by the year the claim was incurred. (7) The monetary amount paid on claims, including the amount paid per claim, during the immediately preceding five calendar years to be reported separately by the year the claim was incurred, with defense and cost containment expense paid. (8) The number of claims closed without payment during the immediately preceding five calendar years, reported by the year the claim was incurred, and the defense and cost containment expense paid thereon. (9) The monetary amount reserved in the annual statement for loss and defense and cost containment expense for the immediately preceding calendar year for outstanding claims incurred but not reported to the insurer. (10) The number and types of lawsuits filed against the insureds in the immediately preceding calendar year. (11) Annualized information on investment income or loss, that shall be consistent with the reported information provided by insurers to the National Association of Insurance Commissioners. (c) For the purposes of information collection conducted pursuant to this section, first priority shall be given by the department and commissioner to collecting and compiling information from insurers concerning long-term health care facilities and physicians providing services in those facilities, and, to the extent that departmental resources allow, secondary priority shall then be given to the collecting and compiling of information concerning residential care facilities for the elderly and the physicians who provide services in those facilities. (d) Information that is collected for long-term health care facilities and the physicians for those facilities shall be collected, maintained, analyzed, and reported separately from information that is collected, maintained, analyzed, and reported concerning residential care facilities for the elderly, and the physicians for those facilities. (e) As used in this section, “long-term health care facility” has the same meaning as that term is defined in Section 1418 of the Health and Safety Code. (f) As used in this section, “residential care facilities for the elderly” has the same meaning as that term is defined in Section 1569.2 of the Health and Safety Code. (g) Information collected by the department pursuant to this section shall be deemed official information and subject to the disclosure protections of Section 1040 of the Evidence Code. Nothing in this section shall require individualized information that would identify the amount paid by a specific insurer or facility to be released. However, nothing in this subdivision shall prevent the department from preparing reports and policy recommendations based on the data collected pursuant to this section. (Amended by Stats. 2010, Ch. 400, Sec. 4. (AB 2782) Effective January 1, 2011.)
  36. 675.

    ## 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. )

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    This section limits when certain property insurance policies are covered by the chapter and bars an insurer from refusing to renew a covered policy just because a claim is pending, starting January 1, 2000.

    ## 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. ) ## 675. (a) Except as provided in Sections 676.8 and 679.6, this chapter shall apply to policies of insurance, other than automobile insurance and workers’ compensation insurance, on risks located or resident in this state which are issued and take effect or which are renewed after the effective date of this chapter and insuring any of the following contingencies: (1) Loss of or damage to real property which is used predominantly for residential purposes and which consists of not more than four dwelling units. (2) Loss of or damage to personal property in which natural persons resident in specifically described real property of the kind described in paragraph (1) have an insurable interest, except personal property used in the conduct of a commercial or industrial enterprise. (3) Legal liability of a natural person or persons for loss of, damage to, or injury to, persons or property, but not including policies primarily insuring risks arising from the conduct of a commercial or industrial enterprise. (b) This chapter shall not be construed so as to modify or negate any of the provisions of Chapter 3 (commencing with Section 330) of Part 1 of Division 1, nor to destroy any rights or remedies therein provided. (c) On and after January 1, 2000, an insurer may not refuse to renew a policy of insurance specified in subdivision (a) solely on the grounds that a claim is pending under the policy. This subdivision is not applicable to claims made under coverage for loss or damage caused by the peril of earthquake as provided in Chapter 8.5 (commencing with Section 10081) or Chapter 8.6 (commencing with Section 10089.5), of Part 1 of Division 2. (Amended by Stats. 1999, Ch. 313, Sec. 2. Effective January 1, 2000.)
  37. 675.1.

    ## 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. )

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    After a total loss to a primary insured residential structure, the insurer must adjust coverage and premium at renewal, and generally cannot cancel or refuse renewal except in specified cases.

    ## 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. ) ## 675.1. (a) In the case of a total loss to the primary insured structure under a policy of residential property insurance subject to Section 675, the following provisions apply: (1) If reconstruction of the primary insured structure has not been completed by the time of policy renewal, the insurer, prior to or at the time of renewal, and after consultation by the insurer or its representative with the insured as to what limits and coverages might or might not be needed, shall adjust the limits and coverages, write an additional policy, or attach an endorsement to the policy that reflects the change, if any, in the insured’s exposure to loss. The insurer shall adjust the premium charged to reflect any change in coverage. (2) The insurer shall not cancel coverage while the primary insured structure is being rebuilt, except for the reasons specified in subdivisions (a) to (e), inclusive, of Section 676. The insurer shall not use the fact that the primary insured structure is in damaged condition as a result of the total loss as the sole basis for a decision to cancel the policy pursuant to subdivision (e) of that section. (3) Except for the reasons specified in subdivisions (a) to (e), inclusive, of Section 676, the insurer shall offer, for at least the next two annual renewal periods, but no less than 24 months of coverage from the date of the loss, to renew the policy in accordance with paragraph (1) if the total loss to the primary insured structure was caused by a disaster, as defined in subdivision (b) of Section 1689.14 of the Civil Code, the loss was not also due to the negligence of the insured, and losses have not occurred subsequent to the disaster-related total loss that relate to physical or risk changes to the insured property that result in the property becoming uninsurable. (4) With respect to policies of residential earthquake insurance, the California Earthquake Authority, or any insurer, including a participating insurer, as defined in subdivision (i) of Section 10089.5, may defer its initial implementation of this section until no later than October 1, 2005. (5) With respect to a residential earthquake insurance policy issued by the California Earthquake Authority, the following provisions apply: (A) The participating insurer that issued the underlying policy of residential property insurance on the primary insured structure shall consult with the insured as to what limits and coverages might or might not be needed as required by paragraph (1). (B) The California Earthquake Authority, in lieu of meeting the requirements of paragraph (1), shall establish procedures and practices that allow it to reasonably accommodate the needs and interests of consumers in maintaining appropriate earthquake insurance coverage, within the statutory and regulatory limitations on the types of insurance coverages and the coverage limits of the policies that the authority may issue. (b) (1) An insurer shall not cancel or refuse to renew a policy of residential property insurance for a property located in any ZIP Code within or adjacent to the fire perimeter, for one year after the declaration of a state of emergency, as defined in Section 8558 of the Government Code, based solely on the fact that the insured structure is located in an area in which a wildfire has occurred. This prohibition applies to all policies of residential property insurance in effect at the time of the declared emergency. (2) For the purposes of this section, the fire perimeter shall be determined by the Department of Forestry and Fire Protection in consultation with the Office of Emergency Services. The department shall provide the commissioner with data describing the fire perimeter sufficient for the commissioner to determine which ZIP Codes are within or adjacent to the fire perimeter. The commissioner shall then issue a bulletin to inform insurers which ZIP Codes are subject to this subdivision. (c) Subdivision (b) does not apply in any of the following circumstances: (1) If willful or grossly negligent acts or omissions by the named insured, or his or her representatives, are discovered that materially increase any of the risks insured against. (2) If losses unrelated to the postdisaster loss condition of the property have occurred that would collectively render the risk ineligible for renewal. (3) If there are physical or risk changes to the insured property beyond the catastrophe-damaged condition of the structures and surface landscape that result in the property becoming uninsurable. (d) For the purposes of this section, “policy of residential property insurance” has the meaning described in subdivision (a) of Section 10087. (Amended by Stats. 2018, Ch. 618, Sec. 1.5. (SB 894) Effective January 1, 2019.)
  38. 675.5.

    ## 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. )

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    This section says the chapter applies to certain commercial insurance policies issued for delivery in California or renewed on or after January 1, 1987, and defines what counts as commercial insurance and what is excluded.

    ## 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. ) ## 675.5. (a) In addition to any policy of insurance specified in Section 675, this chapter shall apply to policies of commercial insurance issued or issued for delivery in this state which are issued and take effect or are renewed on or after January 1, 1987. (b) As used in this section, commercial insurance means commercial multiperil, commercial property, commercial liability, commercial special multiperil, commercial comprehensive multiperil, errors and omissions liability, and professional liability insurance, and any other insurance not included in subdivision (d) which covers any of the following contingencies: (1) Loss of or damage to real property used or owned by a commercial or industrial enterprise. (2) Loss of or damage to personal property, except personally owned motor vehicles, used in the conduct of a commercial or industrial enterprise. (3) Legal liability of any person for loss of, damage to, or injury to persons or property, arising from the conduct of a commercial or industrial enterprise. (c) As used in this section, the term commercial or industrial enterprise includes a business operated for profit, a professional practice, a nonprofit organization, or a governmental entity. (d) As used in this section, the term commercial insurance does not include any of the following: (1) Workers’ compensation insurance. (2) Insurance provided pursuant to the California FAIR plan or the California automobile assigned risk plan. (3) Disability insurance. (4) Automobile insurance covered by Section 660 and property insurance covered by Section 675. (5) Ocean marine insurance. (6) Fidelity and surety insurance. (7) Surplus line insurance, which is nonadmitted insurance as defined in subdivision (m) of Section 1760.1. (8) Reinsurance. (9) Any insurance, other than professional liability insurance for malpractice, errors, or omissions, for which premiums are determined on a retrospective rating basis. (10) Nuclear liability insurance. (11) Nuclear property insurance. (Amended by Stats. 2011, Ch. 83, Sec. 4. (AB 315) Effective July 15, 2011. Operative July 21, 2011, by Sec. 34 of Stats. 2011, Ch. 83.)
  39. 675.55.

    ## 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. )

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    An insurer generally may not cancel or refuse to renew certain commercial property insurance for one year after a state of emergency if the property is in a ZIP Code within or next to the fire perimeter and the decision is based only on wildfire location.

    ## 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. ) ## 675.55. (a) (1) An insurer shall not cancel or refuse to renew a policy of commercial property insurance for a property located in any ZIP Code within or adjacent to the fire perimeter, for one year after the declaration of a state of emergency, as defined in Section 8558 of the Government Code, based solely on the fact that the insured structure is located in an area in which a wildfire has occurred. This prohibition applies to all policies of commercial property insurance in effect at the time of the declared emergency. (2) For the purposes of this section, the fire perimeter shall be determined by the Department of Forestry and Fire Protection in consultation with the Office of Emergency Services. The department shall provide the commissioner with data describing the fire perimeter sufficient for the commissioner to determine which ZIP Codes are within or adjacent to the fire perimeter. The commissioner shall then issue a bulletin to inform insurers which ZIP Codes are subject to this subdivision. (b) Subdivision (a) does not apply in any of the following circumstances: (1) If willful or grossly negligent acts or omissions by the named insured, or the named insured’s representatives, are discovered that materially increase any of the risks insured against. (2) If losses unrelated to the postdisaster loss condition of the property have occurred that would collectively render the risk ineligible for renewal. (3) If there are physical or risk changes to the insured property beyond the catastrophe-damaged condition of the structures and surface landscape that result in the property becoming uninsurable. (c) (1) For the purposes of this section, “policy of commercial property insurance” is a policy subject to Section 675.5. (2) For purposes of this section, a “policy of commercial property insurance” does not include either of the following: (A) Policies that are inland marine, transit, or transportation insurance, including commercial automobile insurance. (B) A policy of commercial property insurance with an annual premium of twenty-five thousand dollars ($25,000) or more and the insured employed at least 25 employees on average during the prior 12 months. (d) Notwithstanding subparagraph (B) of paragraph (2) of subdivision (c), this section shall apply to a policy of commercial property insurance that insures against loss of, or damage to, real property, used primarily for commercial residential or habitational purposes, including, but not limited to, policies insuring all of the following: (1) Homeowners associations. (2) Condominium associations. (3) Long-term rental hotels or motels. (4) Apartment complexes. (5) Condominium complexes. (6) Multifamily dwellings with greater than five units. (7) Student housing. (8) Senior living facilities. (Added by Stats. 2025, Ch. 544, Sec. 1. (SB 547) Effective January 1, 2026.)
  40. 676.

    ## 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. )

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    A cancellation notice for certain property insurance is ineffective unless it is based on one of the listed grounds, and the policy has been in force for 60 days (or is a renewal, which is effective immediately).

    ## 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. ) ## 676. After a policy specified in Section 675 has been in effect for 60 days, or, if the policy is a renewal, effective immediately, no notice of cancellation shall be effective unless it is based on the occurrence, after the effective date of the policy, of one or more of the following: (a) Nonpayment of premium, including nonpayment of any additional premiums, calculated in accordance with the current rating manual of the insurer, justified by a physical change in the insured property or a change in its occupancy or use. (b) Conviction of the named insured of a crime having as one of its necessary elements an act increasing any hazard insured against. (c) Discovery of fraud or material misrepresentation by either of the following: (1) The insured or his or her representative in obtaining the insurance. (2) The named insured or his or her representative in pursuing a claim under the policy. (d) Discovery of grossly negligent acts or omissions by the insured or his or her representative substantially increasing any of the hazards insured against. (e) Physical changes in the insured property which result in the property becoming uninsurable. (Amended by Stats. 1986, Ch. 1321, Sec. 2.)
  41. 676.1.

    ## 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. )

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    An insurer may not arbitrarily cancel or refuse to renew homeowners’ insurance just because the policyholder has a family day care license at the insured location, unless a listed exception applies.

    ## 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. ) ## 676.1. (a) The arbitrary cancellation of a policy of homeowners’ insurance solely on the basis that the policyholder has a license to operate a family day care home at the insured location shall subject the insurer to administrative sanctions authorized by this code unless, there has been a material misrepresentation of fact, the risk has changed substantially since the policy was issued, there has been a nonpayment of premium, or the insurer no longer writes homeowners policies. (b) The arbitrary refusal to renew a policy of homeowners’ insurance solely on the basis that the policyholder has a license to operate a family day care home at the insured location shall subject the insurer to administrative sanctions authorized by this code unless, there has been a material misrepresentation of fact, the risk has changed substantially since the policy was issued, there has been a nonpayment of premium, or the insurer no longer writes homeowners’ policies. For purposes of this subdivision, an insured’s purchase of a policy of homeowner’s insurance to cover a new, primary residence from the same insurer which insured his or her previous primary residence, provided that the insurer then underwrites homeowners’ insurance in the geographic area containing the new residence, shall be deemed a renewal of the policy on the previous, primary residence. (c) It shall be against public policy for a residential property insurance policy to provide coverage for liability for losses arising out of, or in connection with, the operation of a family day care home. This coverage shall only be provided by a separate endorsement or insurance policy for which premiums have been assessed and collected. (Amended by Stats. 1991, Ch. 784, Sec. 1.)
  42. 676.10.

    ## 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. )

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    For certain property insurance policies, an insurer may not cancel, refuse to renew, or charge an excessive or unfairly discriminatory premium solely because claims were made in the last 60 months for a hate crime or anti-reproductive-rights crime. If such a cancellation or nonrenewal occurs after a qualifying claim, the insurer must report it to the commissioner.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. ) ## 676.10. (a) This section applies to policies covered by Section 675, 675.5, or 676.5 if the insured is a religious organization described in clause (i) of subparagraph (A) of paragraph (1) of subsection (b) of Section 170 of Title 26 of the United States Code, an educational organization described in clause (ii) of subparagraph (A) of paragraph (1) of subsection (b) of Section 170 of Title 26 of the United States Code, or other nonprofit organization described in clause (vi) of subparagraph (A) of paragraph (1) of subsection (b) of Section 170 of Title 26 of the United States Code that is organized and operated for religious, charitable, or educational purposes, or a reproductive health services facility, as defined in subdivision (h) of Section 423.1 of the Penal Code, or its administrative offices. (b) No insurer issuing policies subject to this section shall cancel or refuse to renew the policy, nor shall any premium be excessive or unfairly discriminatory solely on the basis that one or more claims has been made against the policy during the preceding 60 months for a loss that is the result of a hate crime committed against the person or property of the insured, or an antireproductive rights crime. (c) As it relates to this section, if determined by a law enforcement agency, a “hate crime” may include any of the following: (1) By force or threat of force, willfully injure, intimidate, interfere with, oppress, or threaten any other person in the free exercise or enjoyment of any right or privilege secured to him or her by the Constitution or laws of this state or by the Constitution or laws of the United States because of the other person’s race, color, religion, ancestry, national origin, disability, gender, gender identity, gender expression, or sexual orientation, or because he or she perceives that the other person has one or more of those characteristics. However, the foregoing offense does not include speech alone, except upon a showing that the speech itself threatened violence against a specific person or group of persons and that the defendant had the apparent ability to carry out the threat. (2) Knowingly deface, damage, or destroy the real or personal property of any other person for the purpose of intimidating or interfering with the free exercise or enjoyment of any right or privilege secured to the other person by the Constitution or laws of this state or by the Constitution or laws of the United States, because of the other person’s race, color, religion, ancestry, national origin, disability, gender, gender identity, gender expression, or sexual orientation, or because he or she perceives that the other person has one or more of those characteristics. (d) As it relates to this section, if determined by a law enforcement agency, “anti-reproductive-rights crime” shall have the meaning set forth in subdivision (a) of Section 13776 of the Penal Code, and shall also include a violation of subdivision (e) of Section 423.2 of the Penal Code, if the crime results in a covered loss under a policy subject to this section. (e) Upon cancellation of or refusal to renew a policy subject to this section after an insured has submitted a claim to the insurer that is the result of a hate crime committed against the person or property of the insured, or an anti-reproductive-rights crime, the insurer shall report the cancellation or nonrenewal to the commissioner. (f) A violation of this section shall be an unfair practice subject to Article 6.5 (commencing with Section 790) of Chapter 1 of Division 2. (g) Nothing in this section shall prevent an insurer subject to this section from taking any of the actions set forth in subdivision (b) on the basis of criteria not otherwise made invalid by this section or any other act, regulation, or law. (Amended by Stats. 2011, Ch. 719, Sec. 25. (AB 887) Effective January 1, 2012.)
  43. 676.2.

    ## 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. )

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    This section limits when certain commercial insurance policies can be canceled or changed, and requires advance written notice for some premium or coverage changes.

    ## 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. ) ## 676.2. (a) This section applies only to policies of commercial insurance that are subject to Section 675.5. (b) After a policy has been in effect for more than 60 days, or if the policy is a renewal, effective immediately, no notice of cancellation shall be effective unless it complies with Section 677.2 and it is based on the occurrence, after the effective date of the policy, of one or more of the following: (1) Nonpayment of premium, including payment due on a prior policy issued by the insurer and due during the current policy term covering the same risks. (2) A judgment by a court or an administrative tribunal that the named insured has violated any law of this state or of the United States having as one of its necessary elements an act that materially increases any of the risks insured against. (3) Discovery of fraud or material misrepresentation by either of the following: (A) The insured or the insured’s representative in obtaining the insurance. (B) The named insured or the named insured’s representative in pursuing a claim under the policy. (4) Discovery of willful or grossly negligent acts or omissions, or of any violations of state laws or regulations establishing safety standards, by the named insured or the named insured’s representative, which materially increase any of the risks insured against. (5) Failure by the named insured or the named insured’s representative to implement reasonable loss control requirements that were agreed to by the insured as a condition of policy issuance or that were conditions precedent to the use by the insurer of a particular rate or rating plan, if the failure materially increases any of the risks insured against. (6) A determination by the commissioner that the loss of, or changes in, an insurer’s reinsurance covering all or part of the risk would threaten the financial integrity or solvency of the insurer. A certification made under penalty of perjury to the commissioner by an officer of the insurer of the loss of, or change in, reinsurance and that the loss or change will threaten the financial integrity or solvency of the insurer if the cancellation of the policy is not permitted shall constitute this determination unless disapproved by the commissioner within 30 days of the filing. There shall be no extensions to this 30-day period. (7) A determination by the commissioner that a continuation of the policy coverage would place the insurer in violation of the laws of this state or the state of its domicile or that the continuation of coverage would threaten the solvency of the insurer. (8) A change by the named insured or the named insured’s representative in the activities or property of the commercial or industrial enterprise that results in a material added risk, a materially increased risk, or a materially changed risk, unless the added, increased, or changed risk is included in the policy. (c) (1) After a policy has been in effect for more than 60 days, or if the policy is a renewal, effective immediately upon renewal, no increase in the rate upon which the premium is based, reduction in limits, or change in the conditions of coverage shall be effective during the policy period unless a written notice is mailed or delivered to the named insured and the producer of record at the mailing address shown on the policy, at least 30 days prior to the effective date of the increase, reduction, or change. The time periods and procedures in subdivision (a) of Section 1013 of the Code of Civil Procedure shall be applicable if the notice is mailed. The notice shall state the effective date of, and the reasons for, the increase, reduction, or change. (2) The increase, reduction, or change shall not be effective unless it is based upon one of the following reasons: (A) Discovery of willful or grossly negligent acts or omissions, or of any violations of state laws or regulations establishing safety standards by the named insured that materially increase any of the risks or hazards insured against. (B) Failure by the named insured to implement reasonable loss control requirements that were agreed to by the insured as a condition of policy issuance or that were conditions precedent to the use by the insurer of a particular rate or rating plan, if the failure materially increases any of the risks insured against. (C) A determination by the commissioner that loss of or changes in an insurer’s reinsurance covering all or part of the risk covered by the policy would threaten the financial integrity or solvency of the insurer unless the change in the terms or conditions or rate upon which the premium is based is permitted. (D) A change by the named insured in the activities or property of the commercial or industrial enterprise that results in a materially added risk, a materially increased risk, or a materially changed risk, unless the added, increased, or changed risk is included in the policy. (E) With respect to a change in the rate of a policy of professional liability insurance for a health care provider, the insurer’s offer of renewal notifies the policyholder that the insurer has an application filed pursuant to Section 1861.05 pending with the commissioner for approval of a change in the rate upon which the premium is based, and the commissioner subsequently approves the rate change, or some different amount for the policy period. The change shall not be retroactive. (d) The Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340), Chapter 4 (commencing with Section 11370), and Chapter 5 (commencing with Section 11500) of Title 2 of Division 3 of the Government Code) shall not apply to a determination pursuant to paragraph (6) or (7) of subdivision (b) or subparagraph (C) of paragraph (2) of subdivision (c). The commissioner shall charge an insurer who requests a determination pursuant to paragraph (6) or (7) of subdivision (b) a fee sufficient to recover the costs of making the determination. If the commissioner does not act upon a request by an insurer to cancel or change a policy pursuant to those provisions within 30 days, the request shall be deemed to be approved. (e) This section shall not prohibit an insurer from increasing a premium during the policy period if the increase is calculated in accordance with the current rating manual of the insurer and is justified by a physical change in the insured property or by a change in the activities of the commercial or industrial enterprise that materially increases any of the risks insured against. (f) This section shall not apply to a transfer of a policy without a change in its terms or conditions or the rate upon which the premium is based between insurers that are members of the same insurance group. (Amended by Stats. 2022, Ch. 424, Sec. 4. (SB 1242) Effective January 1, 2023.)
  44. 676.3.

    ## 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. )

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    An insurer may impose remedial underwriting action for certain dentists’ or physicians’ coverage only after committee recommendation, advance written notice, and at least 30 days for the insured to respond.

    ## 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. ) ## 676.3. Nothing in Section 676.2 shall preclude the imposition of remedial underwriting action upon coverage insuring dentists or physicians and surgeons against legal liability arising from the rendering of professional services by an insured licensed pursuant to Chapter 4 (commencing with Section 1600) or Chapter 5 (commencing with Section 2000) of Division 2 of the Business and Professions Code, respectively, if remedial underwriting action is imposed pursuant to the recommendation of an underwriting committee advising the insurer; provided that a majority of the members of that committee are licensed pursuant to the chapter of Division 2 of the Business and Professions Code that is applicable to that particular insured, and written notification of the proposed remedial underwriting action is first given to the insured, and the insured is afforded not less than 30 days to present opposition or argument to the underwriting committee as to why the remedial underwriting action should be modified or withheld, prior to any imposition thereof. Remedial underwriting action includes all actions described in subdivision (c) of Section 676.2. Remedial underwriting action imposed pursuant to this section shall not be subject to Article 7 (commencing with Section 1858) of Chapter 9 of Part 2, but nothing in this section shall deny the right of the commissioner to investigate, pursue enforcement action, and seek other remedies as authorized by Article 1 (commencing with Section 12919) of Chapter 2 of Division 3. It is the intent of the Legislature to encourage peer review by insurers providing coverage to persons engaged in the provision of health services and the adoption of conditions of coverage which are intended to protect the public. (Amended by Stats. 1995, Ch. 600, Sec. 1. Effective January 1, 1996.)
  45. 676.4.

    ## 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. )

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    For certain health care facility insurance policies, premium-rate or coverage-condition changes are allowed while the policy is in force if they follow an advisory committee recommendation, the committee has a majority of health care facility representatives, and affected insureds get written notice at least 30 days before the change.

    ## 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. ) ## 676.4. Nothing in Section 676.2 shall preclude, while the policies are in force, changes in the rate upon which the premium is based or the conditions of coverage, or both, of policies insuring health care facilities licensed pursuant to Chapter 2 (commencing with Section 1250) of Division 2 of the Health and Safety Code, if the change is imposed pursuant to the recommendation of a health care facility professional liability advisory committee advising the insurer; provided that a majority of the members of the committee are duly authorized representatives of health care facilities licensed pursuant to that Chapter 2 (commencing with Section 1250) of Division 2 of the Health and Safety Code, and written notification of the change is given to all affected insureds at least 30 days prior to any such change. (Added by Stats. 1988, Ch. 1618, Sec. 2.)
  46. 676.5.

    ## 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. )

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    This section tells how certain commercial insurance policies are treated for chapter purposes: some are treated as one-year policies, and policies longer than one year are treated as successive one-year terms.

    ## 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. ) ## 676.5. (a) This section applies only to policies of commercial insurance which are subject to Section 675.5. (b) Except as provided in subdivision (c), for purposes of this chapter only, a policy with no fixed expiration, or with a term of less than one year, shall be considered to be a policy for a term of one year, and a policy written for a term of more than one year shall be considered as if written for successive terms of one year. (c) For purposes of this chapter, a policy shall be considered to be for a term of less than one year if the policy is issued for a specific risk which does not continue beyond the period of the policy, or if the insured requests a policy for a term of less than one year. (Added by Stats. 1986, Ch. 1321, Sec. 4.)
  47. 676.6.

    ## 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. )

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    This section limits when cancellation and nonrenewal notices are effective for certain commercial excess and umbrella property/liability 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. ) ## 676.6. (a) This section applies to commercial umbrella liability insurance policies, commercial excess liability insurance policies, and commercial excess property insurance policies. (b) As used in this section: (1) “Umbrella liability insurance policy” means an insurance policy providing liability coverage per person or per occurrence or per claim, when written over one or more underlying liability policies or over a specified amount of self-insured retention. (2) “Excess liability insurance policy” means an insurance policy providing liability covrage per person or per occurrence or per claim when written over one or more underlying liability policies. Excess liability policies shall include policies written over umbrella liability policies. (3) “Excess property insurance policy” means a policy providing property coverage per occurrence or per location when written over one or more underlying property insurance policies or a specified amount of self-insured retention. (c) After a policy defined in subdivision (b) of this section has been in effect for more than 60 days, or if the policy is a renewal, effective immediately, no notice of cancellation shall be effective unless it complies with Section 677. 2, is based on one or more of the grounds set forth in subdivision (b) of Section 676.2, or is based on one or more of the following: (1) A material change in limits, type or scope of coverage, or exclusions in one or more of the underlying policies. (2) Cancellation or nonrenewal of one or more of the underlying policies where such policies are not replaced without lapse. (3) A reduction in financial rating or grade of one or more insurers, insuring one or more underlying policies based on an evaluation obtained from a recognized financial rating organization. (d) A notice of nonrenewal shall not be required in any of the following situations: (1) The transfer of, or renewal of, a policy without a change in its terms or conditions or the rate on which the premium is based between insurers which are members of the same insurance group. (2) The policy has been extended for 90 days or less, if the notice required in subdivision (c) has been given prior to the extension. (3) The named insured has obtained replacement coverage or has agreed, in writing, within 60 days of the termination of the policy, to obtain that coverage. (4) The policy is for a period of no more than 60 days and the insured is notified at the time of issuance that it may not be renewed. (5) The named insured requests a change in the terms or conditions or risks covered by the policy within 60 days prior to the end of the policy period. (6) The insurer has made a written offer to the insured, within the time period specified in subdivision (c), to renew the policy under changed terms or conditions or at a changed premium rate. As used herein, “terms or conditions” includes, but is not limited to, a reduction in limits, elimination of coverages, or an increase in deductibles. (Added by Stats. 1988, Ch. 1618, Sec. 3.)
  48. 676.7.

    ## 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. )

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    Insurers issuing homeowners’ or tenants’ policies may not deny, refuse, issue, or cancel coverage solely because an applicant or policyholder is involved in foster home activities.

    ## 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. ) ## 676.7. (a) No admitted insurer, licensed to issue and issuing homeowner’s or tenant’s policies, as described in Section 122, shall (1) fail or refuse to accept an application for that insurance or to issue that insurance to an applicant or (2) cancel that insurance, solely on the basis that the applicant or policyholder is engaged in foster home activities in a licensed foster family home or licensed small family home, as defined in Section 1502 of the Health and Safety Code, or an approved resource family, as defined in Section 16519.5 of the Welfare and Institutions Code. (b) Coverage under policies described in subdivision (a) with respect to a foster child shall be the same as that provided for a natural child. However, unless specifically provided in the policy, there shall be no coverage expressly provided in the policy for any bodily injury arising out of the operation or use of any motor vehicle, aircraft, or watercraft owned or operated by, or rented or loaned to, any foster parent. (c) It is against public policy for a policy of homeowner’s or tenant’s insurance subject to this section to provide liability coverage for any of the following losses: (1) Claims of a foster child, or a parent, guardian, or guardian ad litem thereof, of a type payable by the Foster Family Home and Small Family Home Insurance Fund established by Section 1527.1 of the Health and Safety Code, regardless of whether the claim is within the limits of coverage specified in Section 1527.4 of the Health and Safety Code. (2) An insurer shall not be liable, under a policy of insurance subject to this section, to any governmental agency for damage arising from occurrences peculiar to the foster-care relationship and the provision of foster-care services. (3) Alienation of affection of a foster child. (4) Any loss arising out of licentious, immoral, or sexual behavior on the part of a foster parent intended to lead to, or culminating in, any sexual act. (5) Any loss arising out of a dishonest, fraudulent, criminal, or intentional act. (d) There shall be no penalty for violations of this section prior to January 1, 1987. (e) Insurers may provide a special endorsement to a homeowners’ or tenants’ policy covering claims related to foster care that are not excluded by subdivision (c). (f) Insurers may provide by a separate policy for some or all of the claims related to foster care that are excluded by subdivision (c). (Amended by Stats. 2016, Ch. 612, Sec. 56. (AB 1997) Effective January 1, 2017.)
  49. 676.75.

    ## 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. )

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    Insurers issuing certain homeowner’s or tenant’s policies must not deny, refuse, or cancel coverage solely because an applicant or policyholder does foster home activities in a certified family home.

    ## 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. ) ## 676.75. (a) No admitted insurer, licensed to issue and issuing homeowner’s or tenant’s policies, as described in Section 122, shall (1) fail or refuse to accept an application for that insurance or to issue that insurance to an applicant or (2) cancel that insurance, solely on the basis that the applicant or policyholder is engaged in foster home activities in a certified family home, as defined in Section 1506 of the Health and Safety Code. (b) Coverage under policies described in subdivision (a) with respect to a foster child shall be the same as that provided for a natural child. However, unless specifically provided in the policy, there shall be no coverage expressly provided in the policy for any bodily injury arising out of the operation or use of any motor vehicle, aircraft, or watercraft owned or operated by, or rented or loaned to, any foster parent. (c) It is against public policy for a policy of homeowner’s or tenant’s insurance subject to this section to provide liability coverage for any of the following losses: (1) An insurer shall not be liable, under a policy of insurance subject to this section, to any governmental agency for damage arising from occurrences peculiar to the foster care relationship and the provision of foster care services. (2) Alienation of affection of a foster child. (3) Any loss arising out of licentious, immoral, or sexual behavior on the part of a foster parent intended to lead to, or culminating in, any sexual act. (4) Any loss arising out of a dishonest, fraudulent, criminal, or intentional act. (d) There shall be no penalty for violations of this section prior to January 1, 2013. (e) Insurers may provide a special endorsement to a homeowner’s or tenant’s policy covering claims related to foster care that are not excluded by subdivision (c). (f) Insurers may provide by a separate policy for some or all of the claims related to foster care that are excluded by subdivision (c). (Amended by Stats. 2013, Ch. 76, Sec. 133. (AB 383) Effective January 1, 2014.)
  50. 676.8.

    ## 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. )

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    This section limits cancellation of workers’ compensation insurance policies and requires advance written notice from 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. ) ## 676.8. (a) This section applies only to policies of workers’ compensation insurance. (b) After a policy is in effect, a notice of cancellation shall not be effective unless it complies with the notice requirements of this section and is based upon the occurrence, after the effective date of the policy, of one or more of the following: (1) The policyholder’s failure to make any workers’ compensation insurance premium payment when due. (2) The policyholder’s failure to report payroll, to permit the insurer to audit payroll as required by the terms of the policy or of a previous policy issued by the insurer, or to pay any additional premium as a result of an audit of payroll as required by the terms of the policy or of a previous policy. (3) The policyholder’s material failure to comply with federal or state safety orders or written recommendations of the insurer’s designated loss control representative. (4) A material change in ownership or any change in the policyholder’s business or operations that materially increases the hazard for frequency or severity of loss, requires additional or different classifications for premium calculations, or contemplates an activity excluded by the insurer’s reinsurance treaties. (5) Material misrepresentation by the policyholder or its agent. (6) Failure to cooperate with the insurer in the insurer’s investigation of a claim. (c) A policy shall not be canceled for the conditions specified in paragraph (1), (2), (5), or (6) of subdivision (b) except upon 10 days’ written notice to the policyholder by the insurer. A policy shall not be canceled for the conditions specified in paragraph (3) or (4) of subdivision (b) except upon 30 days’ written notice to the policyholder by the insurer, provided that notice is not required if an insured and insurer consent to the cancellation and reissuance of a policy effective upon a material change in ownership or operations of the insured. The time periods and procedures in subdivision (a) of Section 1013 of the Code of Civil Procedure shall be applicable if the notice is mailed. If the policyholder remedies the condition to the insurer’s satisfaction within the specified time period, the policy shall not be canceled by the insurer. (d) Nothing in this section shall preclude, while policies are in force, changes in the premium rate required or authorized by law, regulation, or order of the commissioner, or otherwise agreed to between the policyholder and insurer. (e) Any policy written for a term longer than one year, or any policy with no fixed expiration date, shall be considered as if written for successive policy periods of one year. (Amended by Stats. 2022, Ch. 424, Sec. 5. (SB 1242) Effective January 1, 2023.)
  51. 676.9.

    ## 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. )

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    This section limits insurers from denying, canceling, refusing to renew, or charging different rates because someone is or may be a victim of domestic violence, and it restricts how related information may be requested or used.

    ## 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. ) ## 676.9. (a) This section applies to policies covered by Sections 675 and 675.5. (b) No insurer issuing policies subject to this section shall deny or refuse to accept an application, refuse to insure, refuse to renew, cancel, restrict, or otherwise terminate, or charge a different rate for the same coverage, on the basis that the applicant or insured person is, has been, or may be, a victim of domestic violence. (c) Nothing in this section shall prevent an insurer subject to this section from taking any of the actions set forth in subdivision (b) on the basis of criteria not otherwise made invalid by this section or any other act, regulation, or rule of law. If discrimination by an insurer is not in violation of this section but is based on any other criteria that are allowable by law, the fact that the applicant or insured is, has been, or may be the subject of domestic violence shall be irrelevant. (d) For purposes of this section, information that indicates that a person is, has been, or may be a victim of domestic violence is personal information within the meaning of Article 6.6 (commencing with Section 791) of Chapter 1 of Part 2. (e) No insurer that issues policies subject to this section, and no person employed by or under contract with an insurer that issues policies subject to this section, shall request any information the insurer or person knows or reasonably should know relates to acts of domestic violence or an applicant’s or insured’s status as a victim of domestic violence, or make use of this information however obtained, except for the limited purpose of complying with legal obligations, verifying a person’s claim to be a subject of domestic violence, or cooperating with a victim of domestic violence in seeking protection from domestic violence or facilitating the treatment of a domestic violence-related medical condition. This subdivision does not prohibit an insurer from asking an applicant or insured about a property and casualty claim, even if the claim is related to domestic violence, or from using information thereby obtained in evaluating and carrying out its rights and duties under the policy, to the extent otherwise permitted by this section and other applicable law. (f) As used in this section, “domestic violence” means domestic violence as defined in Section 6211 of the Family Code. (Added by Stats. 1997, Ch. 845, Sec. 1. Effective January 1, 1998.)
  52. 677.

    ## 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. )

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    Cancellation notices must be written, mailed to the named insured or last known address, and include specified grounds, supporting information, and rights-related notices.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. ) ## 677. (a) All notices of cancellation shall be in writing, mailed to the named insured at the address shown in the policy, or to the insured’s last known address, and shall state, with respect to policies in effect after the time limits specified in Section 676, all of the following: (1) Which of the grounds set forth in Section 676 is relied upon. (2) In accordance with the requirements of subdivisions (a) and (e) of Section 791.10, the specific information supporting the cancellation, the specific items of personal and privileged information that support those reasons, if applicable, and corresponding summary of rights. (3) On or after July 1, 2020, a notification that if the policyholder believes the policy has been wrongfully canceled, the policyholder may have the matter reviewed by the department. The notification shall include the department’s internet website, www.insurance.ca.gov, the department’s telephone number, 1-800-927-HELP (4357), and the mailing address of the department’s Consumer Services Division, 300 South Spring Street, Los Angeles, CA 90013. (b) For purposes of this section, a lienholder’s copy of those notices shall be deemed mailed if, with the lienholder’s consent, it is delivered by electronic transmittal, facsimile, or personal delivery. (Amended by Stats. 2019, Ch. 201, Sec. 1. (AB 1813) Effective January 1, 2020.)
  53. 677.2.

    ## 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. )

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    For certain property insurance policies, cancellation notices must be written and timely, and must identify the effective date and reasons for cancellation.

    ## 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. ) ## 677.2. (a) This section applies only to policies covered by Section 675.5. (b) A notice of cancellation shall be in writing and shall be delivered or mailed to the producer of record, provided that the producer of record is not an employee of the insurer, and to the named insured at the mailing address shown on the policy. The time periods and procedures in subdivision (a) of Section 1013 of the Code of Civil Procedure shall be applicable if the notice is mailed. The notice of cancellation shall include the effective date of the cancellation and the reasons for the cancellation. (c) The notice of cancellation shall be given at least 30 days prior to the effective date of the cancellation, except that in the case of cancellation for nonpayment of premiums or for fraud the notice shall be given no less than 10 days prior to the effective date of the cancellation. Notice of a proposed cancellation pursuant to subdivision (d) of Section 676.2 given prior to a finding of the commissioner shall satisfy the requirements of this section if it is given no less than 30 days prior to the effective date of the cancellation and if it states that cancellation will be effective only upon the approval of the commissioner. (d) This section applies only to cancellations pursuant to Section 676.2. (Amended by Stats. 2022, Ch. 424, Sec. 6. (SB 1242) Effective January 1, 2023.)
  54. 677.4.

    ## 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. )

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    Cancellation notice for certain property insurance must be delivered 20 calendar days before cancellation takes effect, or 10 calendar days before if the cancellation is for nonpayment of premiums or fraud.

    ## 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. ) ## 677.4. A notice of cancellation with respect to a policy covered under Section 675 shall be delivered at least 20 calendar days prior to the effective date of the cancellation, except that in the case of a cancellation for nonpayment of premiums, or for fraud, the notice shall be given at least 10 calendar days prior to the effective date of the cancellation. The time periods and procedures in subdivision (a) of Section 1013 of the Code of Civil Procedure shall be applicable if the notice is mailed. (Amended by Stats. 2022, Ch. 424, Sec. 7. (SB 1242) Effective January 1, 2023.)
  55. 678.

    ## 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. )

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    An insurer must give a named insured advance notice of renewal or nonrenewal for certain property insurance and include specific information in that notice.

    ## 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. ) ## 678. (a) (1) At least 45 days before the policy expiration, an insurer shall deliver to the named insured or mail to the named insured at the address shown in the policy, either of the following: (A) An offer of renewal of the policy contingent upon payment of premium as stated in the offer, stating each of the following: (i) Any reduction of limits or elimination of coverage. That reduction of limits or elimination of coverage shall identify the specific limits being reduced or coverage being eliminated by the offer of renewal. The elimination of coverage for the previously covered peril of fire shall be subject to subdivision (b) of Section 10103.6. (ii) The telephone number of the insurer’s representatives who handle consumer inquiries or complaints. The telephone number shall be displayed prominently in a font size consistent with the other text of the renewal offer. (B) A notice of nonrenewal of the policy. That notice shall contain all of the following: (i) The specific reason or reasons for the nonrenewal. (ii) The telephone number of the insurer’s representatives who handle consumer inquiries or complaints. The telephone number shall be displayed prominently in a font size consistent with the other text of the notice of nonrenewal. (iii) Until July 1, 2020, a brief statement indicating that if the consumer has contacted the insurer to discuss the nonrenewal and remains unsatisfied, the consumer may have the matter reviewed by the department. The statement shall include the telephone number of the unit within the department that responds to consumer inquiries and complaints. (iv) On or after July 1, 2020, a statement that if the consumer has contacted the insurer to discuss the nonrenewal and remains unsatisfied, the consumer may have the matter reviewed by the department. The statement shall include the department’s internet website, www.insurance.ca.gov, the department’s telephone number, (800) 927-HELP (4357), and the mailing address of the department’s Consumer Services Division, 300 S. Spring Street, Los Angeles, CA 90013. (2) On and after July 1, 2022, the time periods and procedures in subdivision (a) of Section 1013 of the Code of Civil Procedure shall be applicable if an offer or notice is mailed. (b) If an insurer fails to give the named insured either an offer of renewal or notice of nonrenewal as required by this section, the existing policy, with no change in its terms and conditions, shall remain in effect for 45 days from the date that either the offer to renew or the notice of nonrenewal is delivered or mailed to the named insured. A notice to this effect shall be provided by the insurer to the named insured with the policy or the notice of renewal or nonrenewal. (c) Notwithstanding subdivisions (a) and (b), with respect to a notice of nonrenewal for a policy that expires on or after July 1, 2020, the following timelines apply: (1) At least 75 days before the policy expiration, the insurer shall deliver the notice of nonrenewal to the named insured or mail the notice of nonrenewal to the named insured at the address shown in the policy. The notice shall include the information contained in subparagraph (B) of paragraph (1) of subdivision (a). On and after July 1, 2022, the time periods and procedures in subdivision (a) of Section 1013 of the Code of Civil Procedure shall be applicable if a notice is mailed. (2) If an insurer fails to give the named insured a notice of nonrenewal at least 75 days before the policy expiration, as required by paragraph (1), the existing policy, with no change in its terms and conditions, shall remain in effect for 75 days from the date that the notice of nonrenewal is delivered or mailed to the named insured. A notice to this effect shall be provided by the insurer to the named insured with the notice of nonrenewal. (d) A policy written for a term of less than one year shall be considered as if written for a term of one year. A policy written for a term longer than one year, or a policy with no fixed expiration date, shall be considered as if written for successive policy periods or terms of one year. (e) A notice of nonrenewal for a residential property insurance policy expiring on or after July 1, 2021, shall be accompanied by the following notice: The California Department of Insurance has developed the California Home Insurance Finder, an online tool that can assist you in obtaining insurance for your home. The Finder contains names, addresses, telephone numbers, and internet website links of licensed insurance agents, brokers, and insurance companies that may be able to sell insurance to you. The Finder is organized by ZIP Code and the languages in which the agent, broker, or insurance company sells insurance. The California FAIR Plan (FAIR Plan) provides basic property insurance as the “insurer of last resort” if you cannot find insurance coverage for your property in the normal (voluntary) insurance market. The FAIR Plan provides basic property insurance coverage for residential structures, as well as personal property coverage for residential and business occupancies. However, FAIR Plan policies may not cover liability, theft, or water damage, among other things. There are also optional coverages available for both residential properties. Applications can be made directly with the FAIR Plan (cfpnet.com), although the FAIR Plan strongly encourages use of a licensed agent or broker for assistance in preparing and obtaining a quote. There is no additional cost for using an agent or broker for purchasing a FAIR Plan policy. California law requires an agent or broker to assist a person seeking a FAIR Plan policy by (1) submitting a coverage application to the FAIR Plan on behalf of the consumer, (2) providing the consumer the FAIR Plan’s internet website address and toll-free telephone number, or (3) obtaining a policy for the consumer through an admitted or nonadmitted insurer. To supplement a FAIR Plan policy, a Difference in Conditions (DIC) policy should be considered. A DIC policy is sold by some private insurers, and provides coverage for things not covered by the basic property insurance policy provided by the FAIR Plan. A consumer who wants broader coverage than that provided by the FAIR Plan policy should contact an agent, broker, or insurance company that offers a DIC policy to obtain this additional coverage. The Department of Insurance maintains a list of insurance companies that sell DIC policies on its internet website (insurance.ca.gov). Additional assistance may be obtained by contacting an agent or broker listed with the department’s online agent locator. (f) An insurer may use a notice substantially similar to the notice set forth in subdivision (e) to the extent that the notice provides additional or more detailed information. (g) This section applies only to policies of insurance specified in Section 675. (Amended by Stats. 2022, Ch. 424, Sec. 8. (SB 1242) Effective January 1, 2023.)
  56. 678.1.

    ## 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. )

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    This section sets notice and timing rules for insurer nonrenewal of certain commercial property insurance 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. ) ## 678.1. (a) This section applies only to policies of insurance of commercial insurance that are subject to Sections 675.5 and 676.6. (b) A notice of nonrenewal shall be in writing and shall be delivered or mailed to the producer of record and to the named insured at the mailing address shown on the policy. The time periods and procedures in subdivision (a) of Section 1013 of the Code of Civil Procedure shall be applicable if the notice is mailed. (c) An insurer, at least 60 days, but not more than 120 days, in advance of the end of the policy period, shall give notice of nonrenewal, and the reasons for the nonrenewal, if the insurer intends not to renew the policy, or to condition renewal upon reduction of limits, elimination of coverages, increase in deductibles, or increase of more than 25 percent in the rate upon which the premium is based. (d) If an insurer fails to give timely notice required by subdivision (c), the policy of insurance shall be continued, with no change in its terms or conditions, for a period of 60 days after the insurer gives the notice. (e) With respect to policies defined in subdivision (b) of Section 676.6, in addition to the bases for conditional renewal set forth in subdivision (c), an insurer may also condition renewal upon requirements relating to the underlying policy or policies. If the requirements are not satisfied as of (1) the expiration date of the policy, or (2) 30 days after mailing or delivery of such notice, whichever is later, the conditional renewal notice shall be treated as an effective notice of nonrenewal, provided the insurer has sent written confirmation to the first named insured and the producer of record that the conditions were not met and that coverage ceased at the expiration date shown in the expiring policy. (f) A notice of nonrenewal shall not be required in any of the following situations. (1) The transfer of, or renewal of, a policy without a change in its terms or conditions or the rate on which the premium is based between insurers that are members of the same insurance group. (2) The policy has been extended for 90 days or less, if the notice required in subdivision (c) has been given prior to the extension. (3) The named insured has obtained replacement coverage or has agreed, in writing, within 60 days of the termination of the policy, to obtain that coverage. (4) The policy is for a period of no more than 60 days and the insured is notified at the time of issuance that it may not be renewed. (5) The named insured requests a change in the terms or conditions or risks covered by the policy within 60 days prior to the end of the policy period. (6) The insurer has made a written offer to the insured, within the time period specified in subdivision (c), to renew the policy under changed terms or conditions or at a changed premium rate. As used herein, “terms or conditions” includes, but is not limited to, a reduction in limits, elimination of coverages, or an increase in deductibles. (g) This section shall become operative on January 1, 2019. (Amended by Stats. 2022, Ch. 424, Sec. 9. (SB 1242) Effective January 1, 2023.)
  57. 678.2.

    ## 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. )

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    The 120-day advance nonrenewal notice rule in Section 678.1 does not apply to professional liability policies issued to health care providers.

    ## 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. ) ## 678.2. The provisions of subdivisions (c) and (e) of Section 678.1 which prohibit notice of nonrenewal earlier than 120 days in advance of the end of the policy period shall not apply to professional liability policies issued to health care providers. (Added by Stats. 1993, Ch. 103, Sec. 2. Effective January 1, 1994.)
  58. 678.5.

    ## 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. )

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    For certain property insurance policies, the insurer cannot cancel the policy or refuse renewal solely because of corrosive soil conditions when the policy includes an existing exclusion for that 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. ) ## 678.5. No policy specified in Section 675 that is issued, amended, or renewed on or after January 1, 1990, may be canceled, and an insurer may not refuse to renew such a policy solely on the grounds of corrosive soil conditions if the policy or renewal policy contains an existing exclusion for payment of loss for that peril. (Added by Stats. 1989, Ch. 1073, Sec. 2.)
  59. 679.

    ## 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. )

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    Insurers, their representatives, and licensed insurance agents or brokers are generally shielded from liability or lawsuits for statements made in cancellation-related communications, unless the statement was made in bad faith with malice in fact.

    ## 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. ) ## 679. There shall be no liability on the part of, and no cause of action of any nature shall arise against, any insurer or its authorized representatives, agents, or employees, or any licensed insurance agent or broker, for any statement made, unless shown to have been made in bad faith with malice in fact, by any of them in (a) any written notice of cancellation or in any other oral or written communication specifying the reasons for cancellation, (b) any communication providing information pertaining to such cancellation, or (c) evidence submitted at any court proceeding or informal inquiry in which such cancellation is an issue. (Added by Stats. 1970, Ch. 313.)
  60. 679.5.

    ## 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. )

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    Proof that a cancellation or nonrenewal notice was mailed to the named insured at the policy address counts as sufficient proof of the notice required by this chapter.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. ) ## 679.5. Proof of mailing of a notice of cancellation and the reasons therefor or of intention not to renew to the named insured at the address shown in the policy shall be sufficient proof of the notice required by this chapter. (Added by Stats. 1970, Ch. 313.)
  61. 679.6.

    ## 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. )

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    The commissioner may, after a hearing, exempt certain property insurance from this chapter if applying it would reduce availability or significantly increase cost.

    ## 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. ) ## 679.6. The commissioner may, after hearing, exempt from the provisions of this chapter insurance in respect to any risk or class of risk that is eligible under Section 1763 for placement with nonadmitted insurers by and through licensed surplus line brokers upon a finding by him that application of this chapter would diminish or tend to diminish the availability, or substantially increase the cost, of such insurance. (Added by Stats. 1971, Ch. 989.)
  62. 679.7.

    ## 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. )

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    An insurer must give a premium and loss history report, and current-period loss experience information, after a proper written request in the listed situations, unless the policyholder already has direct ongoing claims access.

    ## 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 11. Cancellation and Failure to Renew Certain Property Insurance [675 - 679.7] ( Chapter 11 added by Stats. 1970, Ch. 313. ) ## 679.7. (a) Upon receiving a written request from an insured or the agent or broker of record where authorized by the insured, an insurer shall provide a premium and loss history report to the requesting party for the account’s tenure or the three-year period ending with the inception of the current policy period, whichever is shorter, plus loss experience during the current policy period that is in force if any of the following occur: (1) The policy is canceled or nonrenewed. (2) The policyholder requests the information within 60 days prior to the renewal date of an existing policy. (3) The policyholder’s current insurer’s rating is downrated by a nationally recognized insurance rating service to a financial rating below secure or good or to a rating that would negatively impact the ability of the policyholder to conduct its business operations. (4) The policyholder’s current insurer is conserved by the department under Section 1011, or is ordered to cease writing business under Sections 1065.1 and 1065.2. The premium and loss history report, and the loss experience information for the current policy period, shall be provided within 10 business days of receiving the request. (b) This section applies only to policies of commercial insurance that are subject to Sections 675.5 and 676.6, except for professional liability insurance. (c) This section shall not apply to a policyholder who, through automated or other means, is provided direct, ongoing access to claims information by the insurer. (d) For purposes of this section, a loss history report includes, but is not limited to, a list of individual claims detailed by date of claim and total incurred and paid losses. (Added by Stats. 2001, Ch. 102, Sec. 2. Effective January 1, 2002.)
  63. 679.70.

    ## 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 12. Prohibition of Discriminatory Practices by Certain Admitted Insurers [679.70 - 679.75] ( Chapter 12 added by Stats. 1973, Ch. 772. )

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    This section says the chapter applies to certain insurance policies on risks in California, but not automobile or workers’ compensation 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 12. Prohibition of Discriminatory Practices by Certain Admitted Insurers [679.70 - 679.75] ( Chapter 12 added by Stats. 1973, Ch. 772. ) ## 679.70. This chapter shall apply to policies of insurance, other than automobile insurance and workers’ compensation insurance, on risks located or resident in this state which are issued and take effect or which are renewed after the effective date of this chapter and which insure any of the following contingencies: (a) Loss of or damage to real property which is used predominantly for residential purposes. (b) Loss of or damage to personal property in which natural persons resident in specifically described real property of the kind described in subdivision (a) have an insurable interest. (c) Legal liability of a natural person or persons for loss of, damage to, or injury to, persons or property. (Amended by Stats. 2018, Ch. 231, Sec. 5. (AB 2045) Effective January 1, 2019.)
  64. 679.71.

    ## 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 12. Prohibition of Discriminatory Practices by Certain Admitted Insurers [679.70 - 679.75] ( Chapter 12 added by Stats. 1973, Ch. 772. )

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    An admitted insurer covered by this chapter must not unfairly refuse applications, issue policies on worse terms, cancel coverage on worse terms, or charge higher rates because of listed protected characteristics.

    ## 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 12. Prohibition of Discriminatory Practices by Certain Admitted Insurers [679.70 - 679.75] ( Chapter 12 added by Stats. 1973, Ch. 772. ) ## 679.71. No admitted insurer that is licensed to issue any policy of insurance covered by this chapter shall fail or refuse to accept an application for, or to issue a policy to an applicant for, that insurance (unless the insurance is to be issued to the applicant by another insurer under the same management and control), or cancel that insurance, under conditions less favorable to the insured than in other comparable cases, except for reasons applicable alike to persons of every characteristic listed or defined in subdivision (b) or (e) of Section 51 of the Civil Code; nor shall any of those characteristics, of itself, constitute a condition or risk for which a higher rate, premium, or charge may be required of the insured for that insurance. (Amended by Stats. 2008, Ch. 682, Sec. 3. Effective January 1, 2009.)
  65. 679.72.

    ## 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 12. Prohibition of Discriminatory Practices by Certain Admitted Insurers [679.70 - 679.75] ( Chapter 12 added by Stats. 1973, Ch. 772. )

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    Insurance applications and certain insurer investigation reports must not include identification or requirements tied to specified applicant characteristics.

    ## 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 12. Prohibition of Discriminatory Practices by Certain Admitted Insurers [679.70 - 679.75] ( Chapter 12 added by Stats. 1973, Ch. 772. ) ## 679.72. No application for insurance specified in this chapter or insurance investigation report furnished by an insurer to its agents or employees for use in determining the insurability of an applicant shall carry any identification, or any requirement therefor, of any characteristic listed or defined in subdivision (b) or (e) of Section 51 of the Civil Code with respect to the applicant. (Amended by Stats. 2008, Ch. 682, Sec. 4. Effective January 1, 2009.)
  66. 679.73.

    ## 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 12. Prohibition of Discriminatory Practices by Certain Admitted Insurers [679.70 - 679.75] ( Chapter 12 added by Stats. 1973, Ch. 772. )

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    This section says the chapter does not forbid asking an insurance applicant about their birthplace, as long as the question is used only to identify the applicant and not to discriminate.

    ## 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 12. Prohibition of Discriminatory Practices by Certain Admitted Insurers [679.70 - 679.75] ( Chapter 12 added by Stats. 1973, Ch. 772. ) ## 679.73. Nothing in this chapter shall prohibit use in an application for insurance specified in this chapter of a question asking for the birthplace of an applicant if such question is used only to identify the applicant and not to discriminate against the applicant. (Added by Stats. 1973, Ch. 772.)
  67. 679.74.

    ## 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 12. Prohibition of Discriminatory Practices by Certain Admitted Insurers [679.70 - 679.75] ( Chapter 12 added by Stats. 1973, Ch. 772. )

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    Certain admitted property insurers may not deny, issue, or cancel residential coverage based on an occupant’s income or housing assistance, and related applications or reports may not identify those traits.

    ## 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 12. Prohibition of Discriminatory Practices by Certain Admitted Insurers [679.70 - 679.75] ( Chapter 12 added by Stats. 1973, Ch. 772. ) ## 679.74. (a) An admitted insurer that is licensed to issue a policy of insurance upon real property of the type described in paragraph (1) of subdivision (a) of Section 675 or paragraph (1) of subdivision (b) of Section 675.5, when that real property is used for residential purposes, or property of the type described in subdivision (a) of Section 10087, shall not fail or refuse to accept an application for, or to issue a policy to an applicant for, that insurance unless the insurance is to be issued to the applicant by another insurer under the same management and control, or cancel that insurance, based upon the following characteristics: (1) The level or source of income of an individual or group of individuals residing or intending to reside upon the property to be insured, if the individual or group of individuals is not the owner of the real property. (2) The receipt of assistance, intended for housing, from the federal or state government, or from a local public entity, as defined in Section 50079 of the Health and Safety Code, including, but not limited to, federal vouchers issued under Section 8 of the United States Housing Act of 1937 (42 U.S.C. Sec. 1437f), by an individual or group of individuals residing or intending to reside upon the property insured or to be insured. (b) An application for a policy of insurance upon real property of the type described in subdivision (a), or an insurance investigation report furnished by an insurer to its agents or employees for use in determining the insurability of an applicant under such a policy, shall not carry any identification, or any requirement for identification, of the following characteristics: (1) The level or source of income of an individual or group of individuals residing or intending to reside upon the property to be insured, if the individual or group of individuals is not the owner of the real property. (2) The receipt of assistance, intended for housing, from the federal or state government, or from a local public entity, as defined in Section 50079 of the Health and Safety Code, including, but not limited to, federal vouchers issued under Section 8 of the United States Housing Act of 1937 (42 U.S.C. Sec. 1437f), by an individual or group of individuals residing or intending to reside upon the property insured or to be insured. (c) In the case of real property of the type described in paragraph (1) of subdivision (a) of Section 675, paragraph (1) of subdivision (b) of Section 675.5, or subdivision (a) of Section 10087 that is used for both residential and commercial purposes, the insurer, or its agent or employee, may consider the source of income of a nonresidential tenant of the property in determining the insurability of an applicant. (d) Nothing in this section prohibits an insurer from failing or refusing to accept an application for, issuing, or canceling or failing to renew, a policy of insurance covered by this chapter as a result of underwriting or assessment of factors other than those characteristics listed in subdivision (a), or as otherwise prohibited by law. (Added by Stats. 2015, Ch. 432, Sec. 1. (AB 447) Effective January 1, 2016.)
  68. 679.75.

    ## 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 12. Prohibition of Discriminatory Practices by Certain Admitted Insurers [679.70 - 679.75] ( Chapter 12 added by Stats. 1973, Ch. 772. )

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    An insurer covering a private detention facility may consider that facility’s compliance with Penal Code Section 9506 as part of its loss control program.

    ## 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 12. Prohibition of Discriminatory Practices by Certain Admitted Insurers [679.70 - 679.75] ( Chapter 12 added by Stats. 1973, Ch. 772. ) ## 679.75. To reduce underwriting risk and ensure solvency, an insurer providing insurance coverage pertaining to a private detention facility, as defined in subdivision (b) of Section 9500 of the Penal Code, may consider whether the private detention facility complies with all of the requirements of Section 9506 of the Penal Code as part of the insurer’s loss control program. (Added by Stats. 2021, Ch. 298, Sec. 1. (SB 334) Effective January 1, 2022.)
  69. 679.9.

    ## 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 11.5. Disclosure Requirements for Certain Property Insurance [679.9- 679.9.] ( Chapter 11.5 added by Stats. 2003, Ch. 571, Sec. 2. )

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    If an insurer changes an annual premium for a policy covered by Section 675, it must give the insured written details within 15 business days after the insured asks.

    ## 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 11.5. Disclosure Requirements for Certain Property Insurance [679.9- 679.9.] ( Chapter 11.5 added by Stats. 2003, Ch. 571, Sec. 2. ) ## 679.9. If an insurer changes the annual premium under a policy specified in Section 675, it shall, within 15 business days of a request by the insured, inform the insured in writing of each of the following: (a) The amount of the premium increase or decrease in comparison to the premium charged in the previous year. (b) The reason or reasons for the change, including, but not limited to, the deletion of a loss-free credit, the application of a claim-related surcharge, or any other reason related to a claim or policyholder inquiry. (c) A brief statement indicating each of the following: (1) That the consumer may contact their agent or the insurer with any additional questions regarding the premium and providing the telephone number for the insurer’s representatives who are capable of responding, and authorized to respond, to consumer inquiries and complaints. (2) That if the insured has contacted the insurer to discuss a premium increase and the insured remains unsatisfied, he or she may contact the department with any inquiries or complaints. The statement shall include the telephone number of the unit within the department that responds to consumer inquiries and complaints. (Added by Stats. 2003, Ch. 571, Sec. 2. Effective January 1, 2004. Operative March 1, 2004, by Sec. 3 of Ch. 571.)
  70. 680.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Charter Requirements [680- 680.] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    An insurer may not transact any class of insurance that is not authorized by its charter.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Charter Requirements [680- 680.] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 680. An insurer shall not transact any class of insurance which is not authorized by its charter. (Enacted by Stats. 1935, Ch. 145.)
  71. 685.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1.5. Retaliation [685 - 685.5] ( Article 1.5 added by Stats. 1959, Ch. 2120. )

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    Insurers above certain annual tax thresholds must pay by electronic funds transfer and use an acceptable Section 45 method. If they pay some other way, they can be hit with a 10% penalty unless the department grants relief for reasonable cause.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1.5. Retaliation [685 - 685.5] ( Article 1.5 added by Stats. 1959, Ch. 2120. ) ## 685. (a) When by or pursuant to the laws of any other state or foreign country any taxes, licenses and other fees, in the aggregate, and any fines, penalties, deposit requirements or other material obligations, prohibitions or restrictions are or would be imposed upon California insurers, or upon the agents or representatives of those insurers, that are in excess of the taxes, licenses and other fees, in the aggregate, or that are in excess of the fines, penalties, deposit requirements or other obligations, prohibitions, or restrictions directly imposed upon similar insurers, or upon the agents or representatives of those insurers, of that other state or country under the statutes of this state, so long as the laws of the other state or country continue in force or are so applied, the same taxes, licenses and other fees, in the aggregate, or fines, penalties, deposit requirements or other material obligations, prohibitions, or restrictions, of whatever kind, shall be imposed upon the insurers, or upon the agents or representatives of those insurers, of the other state or country doing business or seeking to do business in California. Any tax, license or other fee or other obligation imposed by any city, county, or other political subdivision or agency of the other state or country on California insurers or their agents or representatives shall be deemed to be imposed by that state or country within the meaning of this article. (b) On and after January 1, 1994, and before January 1, 1995, every insurer whose annual taxes exceed fifty thousand dollars ($50,000) shall make payment by electronic funds transfer. On and after January 1, 1995, every insurer whose annual taxes exceed twenty thousand dollars ($20,000) shall make payment by electronic funds transfer. The insurer shall choose one of the acceptable methods described in Section 45 for completing the electronic funds transfer. (c) Payment is deemed complete on the date the electronic funds transfer is initiated, if settlement to the state’s demand account occurs on or before the banking day following the date the transfer is initiated. If settlement to the state’s demand account does not occur on or before the banking day following the date the transfer is initiated, payment is deemed to occur on the date settlement occurs. (d) (1) Any insurer required to remit taxes by electronic funds transfer pursuant to this section who remits those taxes by means other than an appropriate electronic funds transfer, shall be assessed a penalty in an amount equal to 10 percent of the taxes due at the time of the payment. (2) If the department finds that an insurer’s failure to make payment by an appropriate electronic funds transfer in accordance with subdivision (b) is due to reasonable cause or circumstances beyond the insurer’s control, and occurred notwithstanding the exercise of ordinary care and in the absence of willful neglect, that insurer shall be relieved of the penalty provided in paragraph (1). (3) Any insurer seeking to be relieved of the penalty provided in paragraph (1) shall file with the department a statement under penalty of perjury setting forth the facts upon which the claim for relief is based. (Amended by Stats. 1995, Ch. 721, Sec. 1. Effective January 1, 1996.)
  72. 685.1.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1.5. Retaliation [685 - 685.5] ( Article 1.5 added by Stats. 1959, Ch. 2120. )

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    This article does not apply to certain taxes, including personal income taxes, ad valorem taxes on real or personal property, and certain special purpose obligations or assessments; however, some tax deductions must still be considered when deciding retaliatory action.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1.5. Retaliation [685 - 685.5] ( Article 1.5 added by Stats. 1959, Ch. 2120. ) ## 685.1. This article shall not apply as to personal income taxes, nor as to ad valorem taxes on real or personal property nor as to special purpose obligations or assessments heretofore imposed by another state or foreign country in connection with particular kinds of insurance, other than property insurance; except that deductions, from premium taxes or other taxes otherwise payable, allowed on account of real estate or personal property taxes paid shall be taken into consideration in determining the propriety and extent of retaliatory action under this article. (Added by Stats. 1959, Ch. 2120.)
  73. 685.2.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1.5. Retaliation [685 - 685.5] ( Article 1.5 added by Stats. 1959, Ch. 2120. )

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    This section defines where certain insurers are domiciled for this article.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1.5. Retaliation [685 - 685.5] ( Article 1.5 added by Stats. 1959, Ch. 2120. ) ## 685.2. For the purposes of this article the domicile of an alien insurer, other than insurers formed under the laws of Canada, shall be that state in which is located its principal place of business in the United States. In the case of an insurer formed under the laws of Canada or a province thereof, its domicile shall be deemed to be that province in which its head office is situated. (Added by Stats. 1959, Ch. 2120.)
  74. 685.3.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1.5. Retaliation [685 - 685.5] ( Article 1.5 added by Stats. 1959, Ch. 2120. )

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    The commissioner must enforce Section 685, and for matters needing further or final action by other state officials, must start enforcement and execution. The Board of Equalization and the Controller must complete enforcement and execution for matters the commissioner initiates, within their constitutional and legal powers.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1.5. Retaliation [685 - 685.5] ( Article 1.5 added by Stats. 1959, Ch. 2120. ) ## 685.3. To the extent permitted by the California Constitution there is hereby imposed upon the commissioner the duty to enforce Section 685. It shall be the duty of the commissioner to initiate the enforcement and execution of Section 685 in respect to all matters which by the California Constitution or laws of this state require further or final action by other officials of this state. In respect to any matter initiated by the commissioner, it shall be the duty of the Board of Equalization and the Controller to complete the enforcement and execution of Section 685 in respect to that matter within the scope of the duties and powers of each as set forth in the California Constitution and laws of this state. (Amended by Stats. 1996, Ch. 320, Sec. 29. Effective January 1, 1997.)
  75. 685.4.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1.5. Retaliation [685 - 685.5] ( Article 1.5 added by Stats. 1959, Ch. 2120. )

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    This article also applies to reciprocals, interinsurance exchanges, and fraternal benefit societies.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1.5. Retaliation [685 - 685.5] ( Article 1.5 added by Stats. 1959, Ch. 2120. ) ## 685.4. The provisions of this article shall also be applicable to reciprocals or interinsurance exchanges and fraternal benefit societies. (Added by Stats. 1959, Ch. 2120.)
  76. 685.5.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1.5. Retaliation [685 - 685.5] ( Article 1.5 added by Stats. 1959, Ch. 2120. )

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    The Insurance Commissioner must not treat the reduction in the gross premiums tax rate as a factor when imposing or enforcing retaliatory taxes under the cited provisions.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1.5. Retaliation [685 - 685.5] ( Article 1.5 added by Stats. 1959, Ch. 2120. ) ## 685.5. The reduction in the gross premiums tax rate made by Section 12202.2 of the Revenue and Taxation Code shall not be considered in any determination by the Insurance Commissioner to impose or enforce a tax under the retaliatory tax provisions of Sections 685 to 685.4, inclusive, and reported pursuant to Sections 12281, 12287, 12288, and 12289 of the Revenue and Taxation Code. (Added by Stats. 2016, 2nd Ex. Sess., Ch. 2, Sec. 2. (SB 2 2x) Effective June 9, 2016. Operative on July 1, 2016, or later date, as prescribed by Sec. 6 of Ch. 2. Conditionally inoperative as prescribed by Secs. 7 and 8 of Ch. 2.)
  77. 688.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1.7. Continuity of Management [688 - 688.5] ( Article 1.7 added by Stats. 1963, Ch. 1285. )

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    The section says domestic insurers’ business should continue during a national emergency.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1.7. Continuity of Management [688 - 688.5] ( Article 1.7 added by Stats. 1963, Ch. 1285. ) ## 688. The Legislature declares that it is desirable for the general welfare and in particular for the welfare of insurance beneficiaries, policyholders, injured claimants and others that the business of domestic insurers be continued notwithstanding the event of a national emergency. The specific purpose of this chapter is to facilitate the continued operation of domestic insurers in the event that a national emergency is caused by an attack on the United States or by a nuclear, atomic or other disaster which makes it impossible or impracticable for a company to conduct its business in strict accord with applicable provisions of law, its bylaws, or its charter. (Added by Stats. 1963, Ch. 1285.)
  78. 688.1.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1.7. Continuity of Management [688 - 688.5] ( Article 1.7 added by Stats. 1963, Ch. 1285. )

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    A domestic insurer’s board may adopt emergency bylaws, and those bylaws can operate during a national emergency.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1.7. Continuity of Management [688 - 688.5] ( Article 1.7 added by Stats. 1963, Ch. 1285. ) ## 688.1. The board of directors of any domestic insurer may at any time adopt emergency bylaws, subject to repeal or change by action of those having power to adopt regular bylaws for the insurer, which shall be operative during such a national emergency and which may, notwithstanding any different provisions of the regular bylaws, or of the applicable statutes, or of the insurer’s charter, make any provision that may be reasonably necessary for the operation of the insurer during the period of such emergency. (Added by Stats. 1963, Ch. 1285.)
  79. 688.2.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1.7. Continuity of Management [688 - 688.5] ( Article 1.7 added by Stats. 1963, Ch. 1285. )

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    If a domestic insurer’s board has not adopted emergency bylaws, emergency rules apply during a national emergency for board quorum, vacancy filling, and replacement of directors.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1.7. Continuity of Management [688 - 688.5] ( Article 1.7 added by Stats. 1963, Ch. 1285. ) ## 688.2. In the event that the board of directors of a domestic insurer has not adopted emergency bylaws, the following provisions shall become effective upon the occurrence of such a national emergency: (1) Three directors shall constitute a quorum for the transaction of business at all meetings of the board. (2) Any vacancy in the board may be filled by a majority of the remaining directors, though less than a quorum, or by a sole remaining director. (3) If there are no surviving directors, but at least three vice presidents of the company survive, the three vice presidents with the longest term of service shall be the directors and shall possess all of the powers of the previous board of directors and such powers as are granted herein or by subsequently enacted legislation. By majority vote such emergency board of directors may elect other directors. If there are not at least three surviving vice presidents, the commissioner or duly designated person exercising the powers of the commissioner shall appoint three persons as directors who shall possess all of the powers of the previous board of directors and such powers as are granted herein or by subsequently enacted legislation, and these persons by majority vote may elect other directors. (Added by Stats. 1963, Ch. 1285.)
  80. 688.3.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1.7. Continuity of Management [688 - 688.5] ( Article 1.7 added by Stats. 1963, Ch. 1285. )

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    A domestic insurer’s board may adopt a resolution to set officer succession for certain emergencies.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1.7. Continuity of Management [688 - 688.5] ( Article 1.7 added by Stats. 1963, Ch. 1285. ) ## 688.3. At any time the board of directors of a domestic insurer may, by resolution, provide that in the event of such a national emergency and in the event of the death or incapacity of the president, the secretary or the treasurer of the company such officers, or any of them, shall be succeeded in the office by the person named or described in a succession list adopted by the board of directors. Such list may be on the basis of named persons or position titles, shall establish the order of priority and may prescribe the conditions under which the powers of the office shall be exercised. (Added by Stats. 1963, Ch. 1285.)
  81. 688.4.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1.7. Continuity of Management [688 - 688.5] ( Article 1.7 added by Stats. 1963, Ch. 1285. )

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    A domestic insurer’s board may adopt a resolution to move its home office or principal place of business to a named or described location if a national emergency occurs.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1.7. Continuity of Management [688 - 688.5] ( Article 1.7 added by Stats. 1963, Ch. 1285. ) ## 688.4. At any time the board of directors of a domestic insurer may, by resolution, provide that in the event of such a national emergency the home office or principal place of business of the insurer shall be at such location as is named or described in the resolution. Such resolution may provide for alternate locations and establish an order of preference. (Added by Stats. 1963, Ch. 1285.)
  82. 688.5.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1.7. Continuity of Management [688 - 688.5] ( Article 1.7 added by Stats. 1963, Ch. 1285. )

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    This section defines “insurer” and “board of directors” for this article.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1.7. Continuity of Management [688 - 688.5] ( Article 1.7 added by Stats. 1963, Ch. 1285. ) ## 688.5. “Insurer” as used in this article includes insurance corporations and insurer organizations of every type and reciprocal or interinsurance exchanges and the incorporated attorney in fact of a reciprocal or interinsurance exchange, which corporate attorney in fact is either organized under the laws of or has its home office and principal place of business in this State. “Board of directors” as used in this article includes the policy-determining body of an insurer whether or not it is called by that name. (Added by Stats. 1963, Ch. 1285.)
  83. 690.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Capital Structure [690- 690.] ( Article 2 enacted by Stats. 1935, Ch. 145. )

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    An insurer whose paid-in capital is represented by stock shares may not be organized in California or allowed to transact insurance there unless every authorized or issued share has a specified par value.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Capital Structure [690- 690.] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 690. If any paid in capital of an insurer is, or is to be, represented by shares of stock, such insurer shall not be organized in this State or admitted to transact any class of insurance in this State, unless all of such shares, authorized or issued, have a specified par value. (Enacted by Stats. 1935, Ch. 145.)
  84. 699.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    A certificate of authority generally cannot be issued to an unincorporated insurer, except where this code specifically allows it.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 699. Except as specifically permitted by this code, a certificate of authority shall not be issued to an unincorporated insurer. This section shall not be applicable to an unincorporated insurer now holding a certificate of authority to transact any class of insurance in California, nor shall it affect the right of any such unincorporated insurer to hereafter apply for or be issued a renewal certificate of authority or an amended certificate of authority to transact additional classes of insurance; provided, that any such unincorporated insurer shall continue to comply insofar as applicable with the same requirements as are now or hereafter applicable to corporate insurers; nor shall this section prohibit the issuance of a certificate of exemption to the trustees of a fund established by one employer, or by two or more employers in the same industry, or by one or more labor unions, or by one or more employers and one or more labor unions, to insure employees of the employers or members of the unions for the benefit of persons other than the employers or the unions. (Added by Stats. 1955, Ch. 1364.)
  85. 699.1.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    The Public Employees’ Retirement System is exempt from this code for its group life insurance program under the specified Government Code article.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 699.1. The Public Employees’ Retirement System is exempt from the provisions of this code with respect to the group life insurance program established pursuant to Article 7 (commencing with Section 21400), Chapter 9, Part 3, Title 2 of the Government Code. (Added by Stats. 1974, Ch. 374.)
  86. 699.5.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    The commissioner may issue, renew, or continue an insurer’s license even if the insurer is partly owned or controlled by a state, foreign government, or similar public entity, unless specific disqualifying findings are made.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 699.5. (a) The ownership or financial control, in part, direct or indirect, of any domestic, foreign, or alien insurer, by any state of the United States or by a foreign government or by any political subdivision of either, or by an agency of any other state, government, or subdivision thereof, shall not, provided the insurer complies with all other requirements for issuance, renewal, or continuation of a license, restrict the commissioner from issuing, renewing, or continuing in effect the license of that insurer to transact in this state the kinds of insurance business for which that insurer is otherwise qualified under the provisions of this chapter and under its charter, unless the commissioner finds that any of the following is true: (1) The insurer is subject to any form of subsidy that would enable it to compete unfairly with domestic insurers. (2) The insurer is subject to governmental practices that discriminate on the basis of any characteristic listed or defined in subdivision (b) or (e) of Section 51 of the Civil Code. (3) The ownership or financial control will create the presence of any sovereign immunity in the insurer. (4) Appropriate measures and controls do not exist to avoid security problems resulting from an insurer’s access to confidential information and data of its insured. (5) The ownership or financial control results in substantial or undue influence being asserted over the insurer. (b) The failure by any applicant for a license to submit the information requested by the commissioner for the purposes of determining whether to make a finding pursuant to subdivision (a) shall be sufficient to deny the application. (c) Nothing in the amendments to this section enacted during the 1994 portion of the 1993–94 Regular Session of the Legislature shall be interpreted to authorize the issuance of a license to an insurer wholly owned by any governmental entity described in subdivision (a). (Amended by Stats. 2008, Ch. 682, Sec. 5. Effective January 1, 2009.)
  87. 7.

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

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    A public officer’s delegated powers or duties may be carried out by a deputy or a person the officer authorizes by law, unless the code expressly says otherwise.

    ## Insurance Code - INS ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1935, Ch. 145. ) ## 7. Whenever, by the provisions of this code, a power is granted to a public officer or a duty imposed upon such an officer, the power may be exercised or the duty performed by a deputy of the officer or by a person authorized pursuant to law by the officer, unless it is expressly otherwise provided. (Enacted by Stats. 1935, Ch. 145.)
  88. 700.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    A person may not conduct insurance business in California for a class unless first admitted for that class and obtaining a certificate of authority; the commissioner must decide an application within 180 calendar days.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 700. (a) A person shall not transact any class of insurance business in this state without first being admitted for that class. Except for the State Compensation Insurance Fund as authorized by Sections 11770 and 11778 to 11780.5, inclusive, admission is secured by procuring a certificate of authority from the commissioner. The certificate shall not be granted until the applicant conforms to the requirements of this code and of the laws of this state prerequisite to its issue. (b) The unlawful transaction of insurance business in this state in willful violation of the requirement for a certificate of authority is a public offense punishable by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code, or in a county jail not exceeding one year, or by fine not exceeding one hundred thousand dollars ($100,000), or by both that fine and imprisonment, and shall be enjoined by a court of competent jurisdiction on petition of the commissioner. (c) After the issuance of a certificate of authority, the holder shall continue to comply with the requirements as to its business set forth in this code and in the other laws of this state, including, but not limited to, Chapter 5 (commencing with Section 1631), with regard to employees or contractors who solicit, negotiate, or effect insurance. (d) Where a hearing is held under this section the proceedings shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, and the commissioner shall have all the powers granted therein. (e) The commissioner shall either issue or deny an application for a certificate of authority within 180 calendar days after the date of the application. (f) The commissioner and his or her authorized representative shall be prohibited from seeking a waiver to extend the 180 calendar day period specified in subdivision (e), nor shall the applicant be permitted to waive that period. (Amended by Stats. 2011, Ch. 15, Sec. 205. (AB 109) Effective April 4, 2011. Operative October 1, 2011, by Sec. 636 of Ch. 15, as amended by Stats. 2011, Ch. 39, Sec. 68.)
  89. 700.01.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    This section lets certain incorporated insurers be admitted for specified insurance classes if they meet application and capital requirements, and it sets minimum and maximum paid-in capital limits.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 700.01. In addition to any or all of the classes of insurance which it is permitted to transact by all other applicable provisions of this code, any incorporated insurer admitted or hereafter admitted for one or more of the classes of insurance stated in Section 100, except life, title, mortgage, or mortgage guaranty shall (subject to any limitations contained in its articles of incorporation or charter) be admitted after January 1, 1990, for any or all of the following classes, upon making application therefor and complying with all applicable requirements of law, if its paid-in capital is not less than two million six hundred thousand dollars ($2,600,000) or the aggregate of the amounts hereinafter set forth opposite the classes transacted by it in the United States if an alien insurer, or in any jurisdiction if other than an alien insurer, whichever is lower; provided, that the paid-in capital of incorporated insurers not transacting either fire, marine or surety insurance making application under this section shall be at least three hundred thousand dollars ($300,000) in excess of that aggregate amount. In no event shall any incorporated insurer, as a condition for its admission, be permitted to have a paid-in capital of less than one million dollars ($1,000,000) or be required to have a paid-in capital in excess of two million six hundred thousand dollars ($2,600,000) for any or all of the classes of insurance hereinafter set forth. Number and name of class Amount of capital 2. Fire ........................ $350,000 3. Marine ........................ 350,000 5. Surety ........................ 350,000 6. Disability ........................ 250,000 7. Plate glass ........................ 100,000 8. Liability 9. Workers’ compensation 10. Common carrier liability ⎫ _____ ⎪ _____ ⎬ ........................ ⎪ _____ ⎭ _____ 300,000 for any or all of these 11. Boiler and machinery ........................ 100,000 12. Burglary ........................ 100,000 13. Credit ........................ 100,000 14. Sprinkler ........................ 100,000 15. Team and vehicle ........................ 100,000 16. Automobile ........................ 200,000 18. Aircraft ........................ 100,000 20. Miscellaneous ........................ 100,000 This section shall not be applicable to life, title, mortgage, or mortgage guaranty insurance, and an insurer now or hereafter admitted to transact life, title, mortgage, or mortgage guaranty insurance shall not be admitted under the provisions of this section, but its admission is governed by other applicable provisions of this code. Insurers admitted for one or more classes of insurance on December 31, 1989, shall be governed by the provisions of this section in effect as of December 31, 1989, until December 31, 1999. After December 31, 1999, all insurers governed by this section shall meet the capital requirements of this section as become effective January 1, 1990. Insurers admitted for one or more classes of insurance on December 31, 1989, that thereafter amend their certificate of authority to add a class or classes of insurance shall become subject to the capital requirements of this section. (Amended by Stats. 1989, Ch. 418, Sec. 1.)
  90. 700.02.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    An insurer cannot receive a non-renewal certificate of authority unless it has the required minimum paid-in capital plus a surplus of at least 100% of that minimum.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 700.02. No insurer shall be issued a certificate of authority other than a renewal certificate of authority for any of the classes set forth in Section 100 unless at the time of such issuance it possesses, in addition to the minimum paid-in capital required by this code a surplus of not less than 100 percent of the minimum paid-in capital required. As used in this section, surplus means the excess of admitted assets over the sum of (1) liabilities for losses reported, expenses, taxes and all other indebtedness and reinsurance of outstanding risks as provided by law, and (2) paid-in capital, in the case of an insurer issuing or having outstanding shares of capital stock, or (3) the minimum paid-in capital required, in the case of any other insurer. (Amended by Stats. 1982, Ch. 389, Sec. 2.)
  91. 700.025.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    Certain insurers applying to write the listed automobile insurance classes must have an extra $200,000 surplus at admission, unless they fall within the stated grandfathered categories.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 700.025. An insurer, including a reciprocal or interinsurance exchange, admitted on January 1, 1970, to transact automobile liability insurance under class 8 and automobile insurance under class 16, or which had a valid bona fide application to transact both such classes of insurance pending before the commissioner on or before August 1, 1970, shall not be affected by this section. Any other insurer, including a reciprocal or interinsurance exchange, applying to transact either of such class of insurance in this state, shall possess, at the time of admission for either of such classes, in addition to all minimum paid-in capital required by Section 700.01 and all surplus and paid-in capital required by Sections 700.02 and 700.05, an additional surplus of two hundred thousand dollars ($200,000). (Added by Stats. 1970, Ch. 544.)
  92. 700.03.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    Certain insurers renewing a certificate of authority must use a special paid-in capital rule tied to past statutory amounts, and later keep enough surplus so capital plus surplus meets the October 1, 1953 minimum.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 700.03. Notwithstanding the requirements of Sections 700.01 and 10511 until June 30, 1955, the minimum paid-in capital required for renewal, for the same classes of insurance, of the certificate of authority of any insurer which was in effect on July 1, 1953, shall be that required by such sections as effective on such date. After June 30, 1955, and until such time as such insurer increases its paid-in capital to the amount required by Sections 700.01 and 10511 as effective on October 1, 1953, the minimum paid-in capital required for such renewal shall continue to be that required by such sections as effective on July 1, 1953, but such insurer shall be required to maintain a surplus, as defined in Section 700.02, in an amount which, when combined with the amount of its paid-in capital, shall equal the minimum amount of paid-in capital required by Sections 700.01 and 10511 as effective on October 1, 1953. (Added by Stats. 1953, Ch. 958.)
  93. 700.04.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    Paid-in capital for life insurers, title insurers, and mortgage guaranty insurers is governed by other specified sections of the code.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 700.04. Paid-in capital for life insurers is governed by Section 10510 of this code, for title insurers by Section 12359, and for mortgage guaranty insurers by Section 12640.03. (Amended by Stats. 2012, Ch. 786, Sec. 6. (AB 2303) Effective January 1, 2013.)
  94. 700.05.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    This section sets how to calculate the minimum paid-in capital and surplus for insurer admission, including which insurance classes count and when certain lines are excluded.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 700.05. (a) In determining the minimum amount of paid-in capital and surplus required by the applicable provisions of this code for admission of an insurer, there shall be included all of the classes of insurance transacted by it in the United States if an alien insurer, or in any jurisdiction if other than an alien insurer; provided, that life, title, mortgage or mortgage guaranty insurance shall not be included among the classes of insurance in determining the minimum amount of paid-in capital and surplus required if the minimum paid-in capital is two million six hundred thousand dollars ($2,600,000) or more, and if the paid-in capital is less than two million six hundred thousand dollars ($2,600,000) the minimum shall be measured by adding to the amounts set forth in Section 700.01 two million two hundred fifty thousand dollars ($2,250,000) for life insurance, two hundred fifty thousand dollars ($250,000) for mortgage insurance, one million dollars ($1,000,000) for mortgage guaranty insurance and two hundred fifty thousand dollars ($250,000) for title insurance. In applying such provisions, it shall be conclusively presumed that an insurer transacts all classes of insurance for which it is or seeks to be admitted to transact in this state. (b) As used in this section, “insurer” includes a reciprocal or interinsurance exchange and its attorney in fact. (Amended by Stats. 1989, Ch. 418, Sec. 2.)
  95. 701.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    A certificate of authority lasts indefinitely, but it ends when the holder’s corporate existence ends. The commissioner may order an insurer to comply within 30 days if the insurer is in arrears or otherwise in default, and the certificate may be revoked if the insurer does not comply unless a court stays the order.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 701. Subject to the annual fee provisions of Section 705, every certificate of authority shall be for an indefinite term and shall expire with the expiration or termination of a corporate existence of the holder thereof. Notwithstanding the provisions of this section, whenever the commissioner shall determine, after notice and hearing, that any insurer to whom such certificate has been issued is in arrears to the State, or to any county or city in the State, for fees, licenses, taxes, assessments, fines or penalties, accrued on business transacted in the State, or is otherwise in default for failure to comply with any of the laws of this State regarding the governmental control of such insurer by the State, he may order that such insurer comply with the said requirements within 30 days of such determination. If the insurer fails to comply within such period, the certificate of authority may then be revoked, unless the commissioner’s order is stayed by a court of appropriate jurisdiction. (Repealed and added by Stats. 1955, Ch. 1037.)
  96. 7010.

    ## 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 8. Assessments [7010 - 7018] ( Article 8 enacted by Stats. 1935, Ch. 145. )

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    If a loss is larger than the insurer’s cash funds and also greater than one-eighth of one percent of the insurer’s insurance in force, the president must convene the directors to make an assessment.

    ## 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 8. Assessments [7010 - 7018] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 7010. When any loss exceeds in amount the cash funds of the insurer and also exceeds one-eighth of one per cent of the total amount of the insurer’s insurance in force, its president shall convene its directors to make an assessment. (Enacted by Stats. 1935, Ch. 145.)
  97. 7011.

    ## 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 8. Assessments [7010 - 7018] ( Article 8 enacted by Stats. 1935, Ch. 145. )

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    When convened for that purpose, the directors must assess all property insured by the 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 8. Assessments [7010 - 7018] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 7011. Upon being convened for the purpose, the directors shall make an assessment upon all of the property insured in the insurer. Such assessment shall be in proportion to the amount for which each piece of property is insured, taken in connection with the rate of premium under which it is classified. (Enacted by Stats. 1935, Ch. 145.)
  98. 7012.

    ## 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 8. Assessments [7010 - 7018] ( Article 8 enacted by Stats. 1935, Ch. 145. )

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    If a loss is small enough, the insurer’s directors may authorize borrowing money and issuing evidence of indebtedness.

    ## 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 8. Assessments [7010 - 7018] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 7012. When the amount of such loss does not exceed one-eighth of one per cent of the total amount of insurance in force in the insurer, its directors may, by resolution in writing signed by two-thirds of all the directors while present at a meeting, borrow money in the name of the insurer and give its evidence of indebtedness therefor, in a total amount not exceeding one-eighth of one per cent of the total amount of insurance thus in force. (Enacted by Stats. 1935, Ch. 145.)
  99. 7013.

    ## 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 8. Assessments [7010 - 7018] ( Article 8 enacted by Stats. 1935, Ch. 145. )

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    Any such loan may not run longer than 12 months, and its maturity date may not be more than 30 days after the insurer’s next 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 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Assessments [7010 - 7018] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 7013. The term of any such loan shall not be greater than twelve months nor shall the date of maturity be in excess of thirty days beyond the date of the next annual meeting of the insurer. (Enacted by Stats. 1935, Ch. 145.)
  100. 7014.

    ## 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 8. Assessments [7010 - 7018] ( Article 8 enacted by Stats. 1935, Ch. 145. )

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    The board of directors may levy an assessment at its annual meeting, capped at 25 cents per $100 on first-class insurance and a pro rata amount on lower classes.

    ## 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 8. Assessments [7010 - 7018] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 7014. The board of directors may at its annual meeting levy an assessment not to exceed twenty-five cents on the $100 of the first class of insurance and a pro rata amount on lower classes. The sum so raised shall constitute a reserve fund to be used in emergency cases only. Another assessment for this fund shall not be made while this reserve fund remains intact. (Enacted by Stats. 1935, Ch. 145.)
  101. 7015.

    ## 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 8. Assessments [7010 - 7018] ( Article 8 enacted by Stats. 1935, Ch. 145. )

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    This section limits assessment liability on county mutual fire insurance policies and lets the commissioner issue or revoke surplus certificates that can reduce or eliminate those assessments.

    ## 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 8. Assessments [7010 - 7018] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 7015. (a) No assessment or assessments may be levied upon any policy in excess of three times the amount of the premium named therein. The liability to assessment on any policy may be further reduced or eliminated as provided in subdivisions (b), (c), (d), and (e). (b) Upon written request, and if the commissioner finds that an insurer has a surplus of admitted assets over liabilities of at least: (1) Seventy-five thousand dollars ($75,000) but less than one hundred fifty thousand dollars ($150,000). (2) One hundred fifty thousand dollars ($150,000) but less than two hundred fifty thousand dollars ($250,000), or (3) Two hundred fifty thousand dollars ($250,000); he or she shall issue his or her certificate stating that the insurer has a surplus of at least $____, but less than $____, filling in the applicable amounts, or of at least two hundred fifty thousand dollars ($250,000), as the case may be. (c) If, when a policy is issued, there is in force an unrevoked certificate issued by the commissioner stating that the insurer has a surplus of admitted assets over liabilities of at least: (1) Seventy-five thousand dollars ($75,000), but less than one hundred fifty thousand dollars ($150,000), no assessment or assessments may be levied on the policy in excess of twice the amount of the premium named therein. (2) One hundred fifty thousand dollars ($150,000), but less than two hundred fifty thousand dollars ($250,000), no assessment or assessments may be levied on the policy in excess of a sum equal to the amount of the premium stated therein. (3) Two hundred fifty thousand dollars ($250,000), no assessment or assessments may be levied on the policy. (d) Whenever the commissioner finds that the surplus of the insurer is less than the minimum specified in an outstanding certificate he or she shall revoke the certificate. (e) Upon revocation of the certificate no policy shall thereafter be issued nor be permitted to remain in force beyond the date fixed for the next payment of premium without provision therein or endorsement thereon providing for that assessment liability as may be applicable at the time of issuance or at the time for the payment of the premium. (f) As used in this section “liabilities” includes liabilities for losses reported, expenses, taxes and all other indebtedness, and provision for reinsuring all outstanding risks. (Amended by Stats. 1997, Ch. 315, Sec. 20. Effective January 1, 1998.)
  102. 7015.5.

    ## 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 8. Assessments [7010 - 7018] ( Article 8 enacted by Stats. 1935, Ch. 145. )

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    The commissioner must charge and collect in advance a $177 fee for issuing certain certificates, and for reissuing, amending, or changing an obsolete certificate at an insurer’s request.

    ## 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 8. Assessments [7010 - 7018] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 7015.5. The commissioner shall charge and collect in advance a fee of one hundred seventy-seven dollars ($177) for issuing a certificate under this article, or for reissuing and amending or changing an obsolete certificate at the request of an insurer. (Amended by Stats. 2017, Ch. 534, Sec. 55. (AB 1699) Effective January 1, 2018.)
  103. 7016.

    ## 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 8. Assessments [7010 - 7018] ( Article 8 enacted by Stats. 1935, Ch. 145. )

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    When an assessment is made, the secretary must immediately notify every policyholder and state the loss amount, each policyholder’s share, who payment is made to, and when payment is due.

    ## 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 8. Assessments [7010 - 7018] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 7016. The secretary, whenever such an assessment is made, shall immediately notify every policyholder in such insurer either personally, by agent, or by letter directed to the policyholder’s usual post-office address, stating: (a) The amount of the loss. (b) The sum due from the policyholder as his share. (c) To whom such payment is to be made. (d) The time when the payment is to be made. Such time shall not be less than thirty days nor more than ninety days from the date of mailing notice. (Enacted by Stats. 1935, Ch. 145.)
  104. 7017.

    ## 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 8. Assessments [7010 - 7018] ( Article 8 enacted by Stats. 1935, Ch. 145. )

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    The insurer may sue a member who does not pay an assessment or other amounts owed to the 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 8. Assessments [7010 - 7018] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 7017. The insurer may bring an action against any member who neglects or refuses to pay an assessment made upon him under the provisions of this chapter, or to pay other liabilities due the insurer. (Enacted by Stats. 1935, Ch. 145.)
  105. 7018.

    ## 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 8. Assessments [7010 - 7018] ( Article 8 enacted by Stats. 1935, Ch. 145. )

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    A director of a county mutual fire insurer may be personally liable to a person who suffers a loss if the director wilfully refuses or neglects to perform duties required by law or the insurer’s by-laws.

    ## 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 8. Assessments [7010 - 7018] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 7018. A director of any such insurer who wilfully refuses or neglects to perform the duties imposed upon him by law or by the insurer’s by-laws shall be liable in his individual capacity to the person sustaining a loss. (Enacted by Stats. 1935, Ch. 145.)
  106. 702.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    Certain insurers advertising and doing insurance business online in California must post specified identifying information on the Internet.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 702. (a) An insurer that maintains a certificate of authority to transact insurance in this state, advertises insurance on the Internet, and transacts insurance in this state, shall identify all of the following information on the Internet, regardless of whether the insurer maintains its Internet presence or if the presence is maintained on its behalf: (1) Its name as it appears on its California certificate of authority, and if different, the name approved by the commissioner for doing business in this state. (2) The state of its domicile and its principal place of business. (3) The number on its California certificate of authority. In lieu of this number, an insurer may identify all states in which it maintains certificates of authority to transact insurance, provided that the insurer discloses its identification number as assigned by the National Association of Insurance Commissioners. (b) An Internet presence maintained by or on behalf of an insurer not admitted to transact insurance in this state constitutes an advertisement, and the insurer shall comply with the requirements of Section 703.1 if it transacts insurance as defined in subdivision (c). (c) A person who advertises on the Internet shall be deemed to be transacting insurance in this state if the person does any of the following: (1) Provides an insurance premium quote specifically to a California resident. (2) Accepts an application for coverage from a California resident. (3) Otherwise communicates with a California resident regarding one or more terms of an agreement to provide insurance or an insurance policy. This subdivision shall not apply to any lawful placement with a nonadmitted insurer, including when a person conveys a quote, accepts an application, and conducts all communications with a California resident solely through a surplus line broker or special lines’ surplus line broker pursuant to California surplus line laws. (Added by Stats. 2000, Ch. 211, Sec. 1. Effective January 1, 2001.)
  107. 703.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    Certain acts involving a nonadmitted insurer are misdemeanors in this state, unless done by a surplus line broker or covered by specified advertising authorizations.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 703. Except when performed by a surplus line broker, the following acts are misdemeanors when done in this state: (a) Acting as agent for a nonadmitted insurer in the transaction of insurance business in this state for a home state insured as defined in subdivision (f) of Section 1760.1. (b) In any manner advertising a nonadmitted insurer in this state. (c) In any other manner aiding a nonadmitted insurer to transact insurance business in this state for a home state insured as defined in subdivision (f) of Section 1760.1. In addition to any penalty provided for commission of misdemeanors, a person violating any provision of this section shall forfeit to this state the sum of five hundred dollars ($500), together with one hundred dollars ($100) for each month or fraction thereof during which he or she continues the violation. This section shall not apply to advertising authorized by Section 703.1, subdivision (h) of Section 1760.5, or Section 1773. (Amended by Stats. 2011, Ch. 83, Sec. 5. (AB 315) Effective July 15, 2011. Operative July 21, 2011, by Sec. 34 of Stats. 2011, Ch. 83.)
  108. 703.1.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    This section lets certain nonadmitted insurers advertise, but only if they follow disclosure and content limits.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 703.1. (a) Any nonadmitted insurer that is an eligible surplus line insurer pursuant to Section 1765.1 may advertise in all media, provided that all of the following apply: (1) the insurer’s unlicensed status in California is disclosed in type of a size no smaller than any telephone number, address, or fax number appearing in the advertisement or solicitation, (2) the advertisement does not contain any assertion, representation, or statement with respect to the business of insurance or with respect to any person in the conduct of his or her insurance business, that is untrue, deceptive, or misleading, and that is known, or that by the exercise of reasonable care should be known, to be untrue, deceptive, or misleading, (3) the advertisement does not contain any information about the nonadmitted insurer’s premiums or rates, and (4) no specific product shall be advertised in a newspaper of general circulation, in a television or radio broadcast, or in a news magazine of general circulation. (b) Any nonadmitted insurer that is not an eligible surplus line insurer pursuant to Section 1765.1 may advertise in all media, except for media that are targeted primarily at insureds or prospective insureds residing in California, provided that all of the conditions set forth in subdivision (a) are complied with and the advertisement does not contain any information about the insurer’s specific products. (c) A group of nonadmitted insurers may advertise to the same extent as a nonadmitted insurer, subject to the same requirements set forth in subdivision (a) or (b), as applicable. (d) An eligible nonadmitted insurer that is a member of a group of insurers may include the name of the group in advertisements that are authorized by this section. (e) The permission to advertise granted by this section shall not be deemed to authorize an insurer to do business in this state. (Amended by Stats. 2011, Ch. 83, Sec. 6. (AB 315) Effective July 15, 2011. Operative July 21, 2011, by Sec. 34 of Stats. 2011, Ch. 83.)
  109. 703.5.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    A person who advertises as an insurance adviser or workers’ compensation administrator and then recommends certain workers’ compensation insurance or insurers to an employer commits a misdemeanor, unless the employer is a qualifying self-insured public entity or has a self-insurance certificate.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 703.5. Any person, including, but not limited to, persons licensed or certificated under this code or exempted from regulation under this code, who as a part of any business advertises as, or holds himself or herself out as, qualified to advise the public concerning insurance or qualified to administer workers’ compensation for employers and who in connection with or as part of that business also, with or without consideration, (a) suggests or recommends to an employer, or advises an employer, that the employer purchase aggregate excess or aggregate stop-loss workers’ compensation insurance, or (b) names or suggests to an employer, or advises an employer of, a nonadmitted insurer from whom aggregate excess or aggregate stop-loss workers’ compensation insurance might be purchased, is guilty of a misdemeanor. This section does not apply if the employer is a self-insured public entity, including any agency, board, or commission provided for by a joint exercise of powers agreement, or those who have been issued a certificate by the Director of the Department of Industrial Relations to self-insure. (Amended by Stats. 1992, Ch. 378, Sec. 1. Effective January 1, 1993.)
  110. 7030.

    ## 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 9. Reports and Statements [7030 - 7031] ( Article 9 enacted by Stats. 1935, Ch. 145. )

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    The secretary must prepare an annual statement about the insurer’s condition and present it 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 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 9. Reports and Statements [7030 - 7031] ( Article 9 enacted by Stats. 1935, Ch. 145. ) ## 7030. The secretary shall prepare an annual statement, showing the condition of such insurer on December thirty-first preceding the annual meeting. He shall present the statement at the annual meeting. (Enacted by Stats. 1935, Ch. 145.)
  111. 7031.

    ## 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 9. Reports and Statements [7030 - 7031] ( Article 9 enacted by Stats. 1935, Ch. 145. )

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    The president and secretary must prepare, under oath, and send the commissioner an annual statement about the insurer’s condition by March 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 9. Reports and Statements [7030 - 7031] ( Article 9 enacted by Stats. 1935, Ch. 145. ) ## 7031. The president and secretary shall, on or before the first day of March of each year, prepare, under oath, and transmit to the commissioner a statement of the condition of the insurer as of the thirty-first day of December then next preceding. (Amended by Stats. 1941, Ch. 117.)
  112. 704.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    The commissioner may suspend an insurer’s certificate of authority for up to one year after notice and a proper hearing if the insurer engages in certain improper practices.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 704. The commissioner may suspend the certificate of authority of an insurer for not exceeding one year whenever he finds, after proper hearing following notice, that such insurer engages in any of the following practices: (a) Conducting its business fraudulently. (b) Not carrying out its contracts in good faith. (c) Habitually and as a matter of ordinary practice and custom compelling claimants under policies, or liability judgment creditors of the insured, to either accept less than the amount due under the terms of the policies or resort to litigation against such insurer to secure the payment of the amount due. The order of suspension shall prescribe the period of such suspension. The proceedings shall be conducted in accordance with Chapter 5 of Part 1 of Division 3 of Title 2 of the Government Code, and the commissioner shall have all the powers granted therein. (Amended by Stats. 1959, Ch. 1452.)
  113. 704.5.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    The commissioner may refuse, suspend, or revoke a certificate of authority when specified owners, affiliates, officers, or directors have felony convictions or pleas for listed offenses.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 704.5. The commissioner may decline to grant or may suspend or revoke a certificate of authority of any holder of such certificate authorized to be certificated under this code if any person or persons, directly or indirectly, or any person who as an affiliate or part of any affiliate, directly or indirectly, owning or controlling, in the aggregate, any interest in more than 10 percent of the stock of such holder of the certificate, or its subsidiary, or any company or entity controlling such holder, or if any officer or director of such holder has been convicted on, or pleaded guilty or nolo contendere to, an indictment or information in any jurisdiction charging a felony for theft or larceny, mail fraud, or violation of any corporate securities statute or any insurance statute. (Amended by Stats. 1969, Ch. 878.)
  114. 704.7.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    The commissioner may let a certificate holder pay a money penalty instead of having its certificate of authority suspended.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 704.7. The commissioner, in any proceeding under Section 704 for any of the violations specified in that section, may, by an alternative order, permit the holder of that certificate of authority to elect in writing to pay a specified money penalty, within a specified time, in lieu of the suspension of its certificate of authority. If the holder so elects, the sum of money specified shall be paid to the commissioner for the use of the State of California. The sum specified shall not exceed fifty-five thousand dollars ($55,000). If the holder so electing fails to pay the specified sum within the specified time the commissioner shall, unless his or her order be lawfully stayed, forthwith put in effect the alternative specified in his or her order. All moneys received by the commissioner pursuant to this section shall, when appropriated for that purpose by the Legislature, be available for expenditure by the commissioner in accordance with law in administration and enforcement of this code and other insurance laws. The authority vested in the commissioner by this section shall be additional to and not in lieu of any other authority to enforce any penalties, fines or forfeitures, denials, suspensions, restrictions, or revocations of certificates of authority otherwise authorized by law. (Amended by Stats. 1988, Ch. 1018, Sec. 1.)
  115. 7040.

    ## 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 9.5. Merger [7040 - 7044.5] ( Article 9.5 added by Stats. 1959, Ch. 1963. )

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    Two or more of these insurers may merge, but the merger plan must be filed with the commissioner, who can require changes and must not approve it if any party’s bylaws were amended within the prior year.

    ## 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 9.5. Merger [7040 - 7044.5] ( Article 9.5 added by Stats. 1959, Ch. 1963. ) ## 7040. Notwithstanding the provisions of Section 900 of the Corporations Code, any two or more of such insurers may merge. The plan and agreement by which any such merger is to be effected shall be submitted to the commissioner who shall examine the same and may require such provisions to be inserted in the agreement and such actions to be taken in connection with the merger (including but not limited to: (1) the terms of the merger, (2) the terms of the notice of the vote by the members of each such insurer on the merger, and (3) the manner and form of voting thereon by the members of each such insurer) as he may deem necessary in order that the transaction shall be mutually fair and equitable between the respective members and policyholders of the companies parties to the merger. The commissioner shall not approve any such plan and agreement if the bylaws of any insurer party to the merger have been amended within one year prior to the date of filing of such plan and agreement with the commissioner. (Amended by Stats. 1978, Ch. 349.)
  116. 7041.

    ## 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 9.5. Merger [7040 - 7044.5] ( Article 9.5 added by Stats. 1959, Ch. 1963. )

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    A merger plan and agreement must be approved by the commissioner, and then approved by at least two-thirds of voting members at a meeting with at least 10% of eligible members present in person or by proxy.

    ## 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 9.5. Merger [7040 - 7044.5] ( Article 9.5 added by Stats. 1959, Ch. 1963. ) ## 7041. When any such plan and agreement shall have been approved by the commissioner, with changes, if any required by him, the same shall be approved by a vote of not less than two-thirds of the members voting at a meeting of the members of each such insurer involved at which there shall be present in person or by proxy at least 10 percent of the members entitled to vote. (Added by Stats. 1959, Ch. 1963.)
  117. 7042.

    ## 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 9.5. Merger [7040 - 7044.5] ( Article 9.5 added by Stats. 1959, Ch. 1963. )

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    If the merger vote is affirmative, the merger papers must be filed with the commissioner; the commissioner must approve and issue a certificate if the proceedings comply with the law and requirements, and the merger becomes effective once the required documents are 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 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 9.5. Merger [7040 - 7044.5] ( Article 9.5 added by Stats. 1959, Ch. 1963. ) ## 7042. If the vote is in the affirmative a certified copy of all proceedings relating to the proposed merger shall be filed with the commissioner. If the commissioner finds that the proceedings have been in accordance with the law and his or her requirements, he or she shall issue his or her certificate approving the plan and agreement and the merger 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 a certificate approving the merger shall be three hundred nine dollars ($309) for the original certificate, payable in advance, with the filing of the first merger papers with the commissioner; and nine dollars ($9) 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. 56. (AB 1699) Effective January 1, 2018.)
  118. 7043.

    ## 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 9.5. Merger [7040 - 7044.5] ( Article 9.5 added by Stats. 1959, Ch. 1963. )

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    After a merger is completed, the surviving corporation is treated as organized in both its own county and the merged insurer’s county for the territorial limit in Section 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 9.5. Merger [7040 - 7044.5] ( Article 9.5 added by Stats. 1959, Ch. 1963. ) ## 7043. After any merger made under the provisions of this article shall have been completed, the surviving corporation shall be deemed, for the purpose of the territorial limit provided in Section 6048, to have been organized not only in its county of organization but also in the county of organization of the county mutual insurer which was merged into it. (Added by Stats. 1959, Ch. 1963.)
  119. 7044.

    ## 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 9.5. Merger [7040 - 7044.5] ( Article 9.5 added by Stats. 1959, Ch. 1963. )

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    A merger plan must state that the surviving corporation receives the merged parties’ rights and property and takes on their 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 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 9.5. Merger [7040 - 7044.5] ( Article 9.5 added by Stats. 1959, Ch. 1963. ) ## 7044. Any plan of merger under this article shall provide that all rights and properties of the parties to the plan of merger shall accrue to and become the rights and properties of the surviving corporation, which surviving corporation shall succeed to and assume all the obligations and liabilities of the merged corporations in the same manner as if incurred or contracted by the surviving corporation. (Added by Stats. 1959, Ch. 1963.)
  120. 7044.5.

    ## 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 9.5. Merger [7040 - 7044.5] ( Article 9.5 added by Stats. 1959, Ch. 1963. )

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    County mutual fire insurers may merge into a general mutual insurer, and a second merger route is allowed when one constituent corporation is being transformed into a general 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 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 9.5. Merger [7040 - 7044.5] ( Article 9.5 added by Stats. 1959, Ch. 1963. ) ## 7044.5. Any one or more county mutual fire insurers, by following the procedure of this article, may merge into a general mutual insurer described in Chapter 4 (commencing with Section 4010) of Part 1, Division 2 of this code. Such general mutual insurer shall become the surviving corporation. Any two or more county mutual fire insurers may merge, concurrently with the transformation of one of the constituent corporations under Article 9.6 (commencing with Section 7045) of Chapter 5, Part 1, Division 2 into a general mutual insurer. The constituent transformed into a general mutual insurer shall be the surviving corporation. (Added by Stats. 1967, Ch. 455.)
  121. 7045.

    ## 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 9.6. Transformation [7045 - 7049] ( Article 9.6 added by Stats. 1963, Ch. 1772. )

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    A county mutual fire insurer’s board of directors must adopt a resolution and submit a transformation plan, an approval application, and a $494 fee to the commissioner if it wants to start transforming into a general 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 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 9.6. Transformation [7045 - 7049] ( Article 9.6 added by Stats. 1963, Ch. 1772. ) ## 7045. The board of directors of any county mutual fire insurer that desires to commence proceedings for transformation of that insurer to a general mutual insurer shall adopt a resolution to that effect and submit to the commissioner a plan for effecting that transformation accompanied by an application for approval thereof and a fee of four hundred ninety-four dollars ($494). (Amended by Stats. 2017, Ch. 534, Sec. 57. (AB 1699) Effective January 1, 2018.)
  122. 7046.

    ## 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 9.6. Transformation [7045 - 7049] ( Article 9.6 added by Stats. 1963, Ch. 1772. )

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    A county mutual fire insurer may transform into a general mutual insurer if the commissioner has given tentative approval, the insurer meets required financial standards, and the policyholders approve by majority vote.

    ## 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 9.6. Transformation [7045 - 7049] ( Article 9.6 added by Stats. 1963, Ch. 1772. ) ## 7046. After the commissioner has granted tentative approval of any such application, a county mutual fire insurer that shall meet the financial requirements applicable to other insurers under Article 3 (commencing with Section 699), Chapter 1, Part 2, Division 1, may by the majority vote of those of its policyholders voting at a meeting duly called for the purpose, elect to transform itself into a general mutual insurer as defined in Chapter 4 (commencing with Section 4010) of Part 1, Division 2 and amend its articles of incorporation and bylaws to conform to, cover, and enjoy any or all of the provisions, powers, rights, and privileges of such a mutual insurer, notwithstanding the restrictions or limitations of any other provision of law, including, but not limited to, Section 900 of the Corporations Code. No such transformed county mutual fire insurer may engage in the business of life, title, mortgage, or mortgage guarantee insurance. (Amended by Stats. 1978, Ch. 349.)
  123. 7047.

    ## 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 9.6. Transformation [7045 - 7049] ( Article 9.6 added by Stats. 1963, Ch. 1772. )

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    A transformation meeting must be preceded by mailed written or printed notice to each policyholder of record, sent at least 30 days before the meeting date. A quorum is present when 5% of policyholders entitled to vote are حاضر in person or by proxy, unless the insurer’s bylaws or articles require a higher percentage.

    ## 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 9.6. Transformation [7045 - 7049] ( Article 9.6 added by Stats. 1963, Ch. 1772. ) ## 7047. The meeting called for the purpose of transformation, shall be preceded by a written or printed notice of the meeting and its purpose addressed to each policyholder of record on the date of the notice, mailed at least 30 days before that date fixed for the meeting. The presence in person or by proxy of 5 percent of the policyholders entitled to vote shall constitute a quorum unless a higher percentage is required by the bylaws or articles of incorporation of the insurer. (Added by Stats. 1963, Ch. 1772.)
  124. 7048.

    ## 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 9.6. Transformation [7045 - 7049] ( Article 9.6 added by Stats. 1963, Ch. 1772. )

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    A transformed corporation continues as the same corporation, and its existing contracts, liabilities, pending proceedings, and previously acquired rights are not changed by the transformation.

    ## 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 9.6. Transformation [7045 - 7049] ( Article 9.6 added by Stats. 1963, Ch. 1772. ) ## 7048. Such corporation shall be a continuance of the original corporation by the same name or by any other name approved by the commissioner. Such transformation, however, shall in no way annul, modify or change any of the existing contracts and liabilities of such corporations, and any and all such contracts and liabilities shall continue in force and effect the same as though such corporation had not transformed or qualified under this article, nor shall such transformation in any way prejudice, impede or impair any pending action or proceeding or any rights previously acquired. Certified copies of all proceedings in connection with such transformation, together with a certified copy of the articles of incorporation as amended, shall be filed with the commissioner. (Added by Stats. 1963, Ch. 1772.)
  125. 7049.

    ## 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 9.6. Transformation [7045 - 7049] ( Article 9.6 added by Stats. 1963, Ch. 1772. )

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    After policyholders elect the transformation, the county mutual insurer must file specified papers and a fee with the insurance commissioner for final 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 5. County Mutual Fire Insurers [5050 - 7060] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 9.6. Transformation [7045 - 7049] ( Article 9.6 added by Stats. 1963, Ch. 1772. ) ## 7049. After the policyholders have elected such a transformation a county mutual insurer shall submit to the insurance commissioner for final approval of the transformation a certified copy of all proceedings together with an application for a new certificate of authority accompanied by the necessary filing fee. The said transformation shall become effective upon the occurrence of the last of the three following events: (1) the final approval by the insurance commissioner, (2) the issuance of a new certificate of authority, and (3) the filing of certified copies of amended articles of incorporation with the Secretary of State. (Added by Stats. 1963, Ch. 1772.)
  126. 705.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    The commissioner must charge a $136 filing fee for each amendment application for a certificate of authority, and insurers with indefinite-term certificates must pay a $424 annual fee in advance.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 705. The commissioner shall require the payment of one hundred thirty-six dollars ($136), in advance, as a fee for filing an application for each amendment of a certificate of authority authorizing any insurer to transact business in this state. Notwithstanding Section 701, each insurer possessing a certificate of authority of indefinite term pursuant to that section shall owe and pay an annual fee of four hundred twenty-four dollars ($424), in advance, on account of that certificate until its final expiration. That fee shall be for annual periods commencing on July 1 of each year and ending on June 30 of each year and is due on each March 1 and is delinquent on and after each April 1. (Amended by Stats. 2017, Ch. 534, Sec. 4. (AB 1699) Effective January 1, 2018.)
  127. 705.1.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    The commissioner must charge $4,233 in advance for filing an application and supporting papers for each original certificate of authority.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 705.1. The commissioner shall require the payment of four thousand two hundred thirty-three dollars ($4,233), in advance, as a fee for filing an application and all supporting exhibits including articles of incorporation, certificates of organization, certificates of capital and assets, certificates of deposit, financial statements, affidavits, appointments of agents for service of process, bonds, deposit schedules, appraisals, and other papers, in support of each original certificate of authority. That fee shall be in lieu of the fees for filing or receiving those papers in support of an application for an original certificate of authority as specified in Section 940.1 and as specified in the following sections of the Insurance Code as they existed on January 1, 1963: 705, 712, 900.5, 946, 976, 1350, 1590 (but not 1599), 1601, 7034, 9034, and 11090. (Amended by Stats. 2017, Ch. 534, Sec. 5. (AB 1699) Effective January 1, 2018.)
  128. 7050.

    ## 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 10. Dissolution [7050- 7050.] ( Article 10 enacted by Stats. 1935, Ch. 145. )

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    Any such insurer may be proceeded against and dissolved under the same process and conditions that apply to other domestic incorporated 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 10. Dissolution [7050- 7050.] ( Article 10 enacted by Stats. 1935, Ch. 145. ) ## 7050. Any such insurer may be proceeded against and dissolved in the same manner and upon the same conditions as in the case of other domestic incorporated insurers. (Enacted by Stats. 1935, Ch. 145.)
  129. 706.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    Before admission, each insurer must file a certified copy of its last annual statement or a verified financial statement with the commissioner.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 706. Prior to admission each insurer shall file with the commissioner a certified copy of its last annual statement or a verified financial statement exhibiting its condition and affairs. (Enacted by Stats. 1935, Ch. 145.)
  130. 706.5.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    The commissioner may deny, restrict, suspend, or revoke an insurer’s certificate of authority based on the insurer’s investment condition and compliance with an order.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 706.5. The commissioner, in addition to any other proper ground for denying a certificate of authority to a nonadmitted insurer, may deny such certificate whenever, in his judgment, the investments of such insurer are not so made as to make available within a reasonable time sufficient moneys to meet promptly any demand which might in the ordinary course of events be properly made against the insurer. In the case of an admitted insurer, whenever the commissioner finds such a condition to exist, he may order such insurer to cease to effect new contracts of insurance until its financial circumstances are changed sufficiently to remove such condition. The commissioner may suspend or revoke the certificate of authority of any admitted insurer which fails to comply with such order. The commissioner shall not issue such order under this section to any solvent admitted insurer if 25 per cent or more in value of the assets thereof is in cash or invested in the securities specified by sections 1171, 1172, 1173, 1174 and 1175, or in securities specified in sections 1191 and 1192 if such securities are listed on a securities exchange, subject to regulation, supervision, or control under a statute of the United States of America. The provisions of this section likewise apply to reciprocal or interinsurance exchanges. (Added by Stats. 1937, Ch. 724.)
  131. 706.7.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    A domestic insurer must not make certain insurance contracts involving residents, property, or operations in a reciprocal state unless it is authorized there. The commissioner must also mail domestic insurers a notice naming the reciprocal states every four years.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 706.7. As used in this section, the term “reciprocal state” means a state the laws of which prohibit an insurer domiciled therein from insuring the lives or persons of residents of, or property or operations located in, the State of California unless it then holds a valid and subsisting certificate of authority issued by the Insurance Commissioner of this state. This prohibition may be subject to the exceptions herein set forth. Subject to the exceptions herein set forth, a domestic insurer shall not enter into a contract of insurance upon the life or person of a resident of, or property or operations located in, a reciprocal state unless it is authorized pursuant to the laws of that state to transact such insurance therein. The commissioner shall, every four years, mail notice to every domestic insurer, specifying the reciprocal states. The exceptions to the provisions of this section are the following: (a) Contracts entered into where the prospective insurant is personally present in the state in which the insurer is authorized to transact insurance when he or she signs the application. (b) The issuance of certificates under a lawfully transacted group life or group disability policy, where the master policy was entered into in a state in which the insurer was then authorized to transact insurance. (c) The renewal or continuance in force, with or without modification, of contracts otherwise lawful and which were not originally executed in violation of this section. (Amended by Stats. 2009, Ch. 234, Sec. 1. (AB 299) Effective January 1, 2010.)
  132. 7060.

    ## 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 11. Exemptions [7060- 7060.] ( Article 11 enacted by Stats. 1935, Ch. 145. )

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    County mutual fire insurers are exempt from the listed insurance code provisions.

    ## 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 11. Exemptions [7060- 7060.] ( Article 11 enacted by Stats. 1935, Ch. 145. ) ## 7060. The provisions of subdivision (f) of Section 381 and the provisions of Sections 382, 383, 384, 750, 751, 752, 753, 754, 755, 756, 757, 758, 759, 761, 762, 763, 764, 765, 766, 800, 801, 802, 803, 804, 805, 806, 807, 808, 809, 980, 981, 982, 983, 984, 985, 986, 987, 988, 989, 990, 991, 992, and 993 shall not apply to county mutual fire insurers. (Amended by Stats. 1979, Ch. 461.)
  133. 707.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    A domestic insurer must file specified incorporation and capital-stock documents with the commissioner before admission.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 707. A domestic insurer shall, prior to admission, file with the commissioner a copy of its articles of incorporation and certificate of any increase or diminution of its capital stock, certified by the Secretary of State to be a copy of that which is filed in his office. (Enacted by Stats. 1935, Ch. 145.)
  134. 708.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    A foreign insurer must file specified documents with the commissioner before it is admitted.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 708. A foreign insurer shall, prior to admission, file with the commissioner the following: (a) If organized in a jurisdiction which requires articles to be filed, a copy of its articles of incorporation, duly certified by the officer having the custody of such articles. (b) If organized in a jurisdiction which does not require articles to be filed, a copy of the law, charter, or deed of settlement under which the insurer is organized, duly certified by the proper custodian thereof, or proved by affidavit to be a copy. (c) A certificate under the hand and seal of the officer, if any, having supervision of insurance business in the jurisdiction of its organization, stating that the insurer is organized under the laws of such jurisdiction, and has the amount of capital stock or assets required by this code. (Enacted by Stats. 1935, Ch. 145.)
  135. 7080.

    ## 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 6. County Mutual Fire Reinsurers [7080 - 9060] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [7080 - 7093] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    Five or more eligible insurers may incorporate to form a mutual reinsurance company.

    ## 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 6. County Mutual Fire Reinsurers [7080 - 9060] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [7080 - 7093] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 7080. Five or more insurers, operating under Chapter 5 of this part and having insurance liabilities exceeding a total of $150,000 which they wish to reinsure, may incorporate for the purpose of mutual reinsurance against any loss or damage by any hazard which county mutual fire insurers may insure. (Amended by Stats. 1939, Ch. 932.)
  136. 7081.

    ## 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 6. County Mutual Fire Reinsurers [7080 - 9060] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [7080 - 7093] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    Before organizing the reinsurer, the insurers must pay $250 in advance to the commissioner and file a declaration of intent to incorporate.

    ## 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 6. County Mutual Fire Reinsurers [7080 - 9060] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [7080 - 7093] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 7081. Upon payment in advance of two hundred fifty dollars ($250) cash, lawful money of the United States, to the commissioner for all services to be rendered by him in the matter of the organization of the reinsurer, such insurers shall first file with the commissioner a declaration of their intention to incorporate such a reinsurer. (Amended by Stats. 1963, Ch. 1917.)
  137. 7082.

    ## 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 6. County Mutual Fire Reinsurers [7080 - 9060] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [7080 - 7093] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    The declaration must be signed by the president and secretary of each incorporator.

    ## 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 6. County Mutual Fire Reinsurers [7080 - 9060] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [7080 - 7093] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 7082. The declaration shall be signed by the president and secretary of each of the incorporators. It shall be accompanied by a certified copy of a resolution passed by the board of directors of each incorporator stating that it is the desire of the particular insurer to become one of the incorporators. Such declaration shall also contain a copy of the articles of incorporation proposed to be adopted. (Enacted by Stats. 1935, Ch. 145.)
  138. 7083.

    ## 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 6. County Mutual Fire Reinsurers [7080 - 9060] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [7080 - 7093] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    Each incorporator must execute the articles through its president or secretary, and each signature must be acknowledged as required by the general corporation law.

    ## 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 6. County Mutual Fire Reinsurers [7080 - 9060] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [7080 - 7093] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 7083. The articles shall be executed by each incorporator through its president or secretary, each signature being acknowledged as required by the general corporation law. (Enacted by Stats. 1935, Ch. 145.)
  139. 7084.

    ## 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 6. County Mutual Fire Reinsurers [7080 - 9060] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [7080 - 7093] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    The commissioner must examine proposed articles of incorporation and, if they comply with this chapter, deliver a certificate allowing incorporation as a county mutual fire reinsurer.

    ## 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 6. County Mutual Fire Reinsurers [7080 - 9060] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [7080 - 7093] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 7084. The commissioner shall examine the proposed articles of incorporation, and if they conform to this chapter, he shall deliver to such incorporators a certificate permitting them to incorporate as such reinsurer. The certificate shall contain the proposed articles of incorporation. (Enacted by Stats. 1935, Ch. 145.)
  140. 7085.

    ## 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 6. County Mutual Fire Reinsurers [7080 - 9060] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [7080 - 7093] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    A county mutual fire reinsurer may do business only after filing the required incorporation documents and getting 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 6. County Mutual Fire Reinsurers [7080 - 9060] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [7080 - 7093] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 7085. Upon filing with the Secretary of State of the articles of incorporation and the certificate provided for in Section 7084, the incorporation of the reinsurer shall be complete and it may engage in business as such reinsurer upon applying for and obtaining from the commissioner a certificate of authority. The term and nature of such certificate of authority, annual renewal fee therefor, the due date and delinquent date of such fee shall be the same as provided by Article 3, Chapter 1, Part 2, Division 1, of this code for stock and mutual insurers governed by said article. No county mutual fire reinsurer shall transact business in this State without a valid and subsisting certificate of authority as provided for herein; provided, however, that any such reinsurer presently authorized to conduct such business shall not be required to pay the first ten dollars ($10) annual certificate of authority fee until April 1, 1964. (Amended by Stats. 1963, Ch. 1917.)
  141. 7086.

    ## 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 6. County Mutual Fire Reinsurers [7080 - 9060] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [7080 - 7093] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    Each member must elect three delegates at its regular annual meeting to represent it at all meetings of the reinsurer.

    ## 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 6. County Mutual Fire Reinsurers [7080 - 9060] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [7080 - 7093] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 7086. Three delegates shall be elected by each member at its regular annual meeting to represent it at all meetings of the reinsurer. (Enacted by Stats. 1935, Ch. 145.)
  142. 7087.

    ## 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 6. County Mutual Fire Reinsurers [7080 - 9060] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [7080 - 7093] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    Delegates must be elected by ballot and serve for one year, or until successors 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 6. County Mutual Fire Reinsurers [7080 - 9060] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [7080 - 7093] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 7087. The delegates shall be elected by ballot and shall hold office for one year, or until their successors have been elected and qualified. (Enacted by Stats. 1935, Ch. 145.)
  143. 7088.

    ## 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 6. County Mutual Fire Reinsurers [7080 - 9060] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [7080 - 7093] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    Members of the reinsurer must hold an annual meeting each year on the third Monday in February.

    ## 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 6. County Mutual Fire Reinsurers [7080 - 9060] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [7080 - 7093] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 7088. The annual meeting of the members of the reinsurer shall be held on the third Monday in February of each year. (Amended by Stats. 1941, Ch. 117.)
  144. 7089.

    ## 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 6. County Mutual Fire Reinsurers [7080 - 9060] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [7080 - 7093] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    At the meeting, the delegates of each member must elect one director per member, and a majority of directors counts as a quorum for 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 6. County Mutual Fire Reinsurers [7080 - 9060] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [7080 - 7093] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 7089. At such meeting one director shall be elected from the delegates of each member so that the number of directors is equal to the number of members of the reinsurer. The by-laws shall fix the manner of, and time for, increasing or diminishing the number of member insurers and, correspondingly, of directors. A majority of the directors shall constitute a quorum for the transaction of business. (Enacted by Stats. 1935, Ch. 145.)
  145. 709.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    An insurer organized in another state must file a certificate with the commissioner before admission, and the certificate must be verified by affidavit.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 709. If the insurer is organized in any other State, it shall, prior to admission, file with the commissioner a certificate setting forth: (a) The nature and character of its business. (b) The location of its principal office. (c) The names of the following parties: (1) If the insurer is not incorporated, and there are more than ten owners of interests therein, the names of the ten persons who own the largest interests; if there are ten or less such owners, the names of all such owners. (2) If the insurer is incorporated, the names of all officers and persons by whom the business is managed. (d) The amount of actual capital to be employed therein. The certificate must be verified by the affidavit of the chief officer, secretary, agent, or manager of the company. (Enacted by Stats. 1935, Ch. 145.)
  146. 709.5.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    This section lets certain insurers redomesticate or transfer domicile, but requires commissioner approval and filings, and sets a filing fee.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 709.5. (a) Any insurer that is organized under the laws of any other state and is admitted to do business in this state for the purpose of writing insurance may become a domestic insurer by designating its principal place of business at a place in this state and redomesticate by filing articles of incorporation as authorized by subdivision (a) of Section 201.6 of the Corporations Code. The domestic insurer shall be entitled to like certificates and licenses to transact business in this state and shall be subject to the authority and jurisdiction of this state. (b) Any domestic insurer may, upon the prior approval of the commissioner, transfer its domicile to any other state in which it is admitted to transact the business of insurance and redomesticate by filing a statement and designation as authorized by Section 2105 of the Corporations Code and a statement of redomestication as authorized by subdivision (c) of Section 201.6 of the Corporations Code, and upon the transfer shall cease to be a domestic insurer, and shall be admitted to this state if qualified as a foreign insurer. The commissioner shall approve any proposed transfer unless he or she determines that the transfer is not in the interest of the policyholders of this state. An insurer seeking to transfer its domicile shall provide the commissioner with information and documentation reasonably necessary to make this determination. The commissioner shall either approve or disapprove the transfer within 90 calendar days after the date of the request. The commissioner and his or her authorized representative shall be prohibited from seeking a waiver to extend the 90-calendar-day period, nor shall the insurer be permitted to waive that period. (c) The certificate of authority, agent and broker appointments and licenses, rates, and other items that the commissioner allows in his or her discretion, that are in existence at the time any insurer licensed to transact the business of insurance in this state transfers its corporate domicile to this or any other state by merger, consolidation, or any other lawful method shall continue in full force and effect upon that transfer if the insurer remains duly qualified to transact the business of insurance in this state. All outstanding policies of any transferring insurer shall remain in full force and effect and need not be endorsed as to the new name of the company or its new location unless so ordered by the commissioner. Every transferring insurer shall file new policy forms with the commissioner on or before the effective date of the transfer, but may use existing policy forms with appropriate endorsements if allowed by, and under those conditions as approved by, the commissioner. However, every transferring insurer shall notify the commissioner of the details of the proposed transfer, and shall file promptly all resulting amendments to corporate documents filed or required to be filed with the commissioner. (d) An insurer seeking qualification under this section shall pay to the commissioner a filing fee of six thousand three hundred fifty dollars ($6,350). Except for an insurer that is a wholly owned subsidiary of a domestic holding company, an insurer seeking qualification shall file with the Secretary of State a statement of redomestication as prescribed by subdivision (c) of Section 201.6 of the Corporations Code and shall also file with the commissioner a designation of an agent for service of process. The commissioner may write a letter to the insurer confirming the redomestication has been approved. (e) Notwithstanding any other law, this section provides the exclusive means for an admitted insurer to change its domicile to, or transfer its domicile from, this state. (Amended by Stats. 2017, Ch. 534, Sec. 6. (AB 1699) Effective January 1, 2018.)
  147. 7090.

    ## 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 6. County Mutual Fire Reinsurers [7080 - 9060] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [7080 - 7093] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    For the first board election, each member insurer gets one vote. Later, each delegate from each member has as many votes as there are directors to elect and may cast them personally or by proxy.

    ## 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 6. County Mutual Fire Reinsurers [7080 - 9060] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [7080 - 7093] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 7090. In the election of the first board of directors each member insurer shall be entitled to one vote. At every subsequent election, each delegate from each member shall have as many votes as there are directors to be elected, and he may cast the votes in person or by proxy, distributing them among the directors to be elected or among a less number of directors, or cumulating them upon one candidate as he sees fit. (Enacted by Stats. 1935, Ch. 145.)
  148. 7091.

    ## 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 6. County Mutual Fire Reinsurers [7080 - 9060] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [7080 - 7093] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    The reinsurer’s directors must elect a president, vice president, executive committee of three, treasurer, and 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 6. County Mutual Fire Reinsurers [7080 - 9060] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [7080 - 7093] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 7091. The directors of the reinsurer shall elect from their own number a president, a vice president, and an executive committee of three. They shall also elect a treasurer and a secretary, who need not be members of any member insurer nor natural persons. (Enacted by Stats. 1935, Ch. 145.)
  149. 7092.

    ## 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 6. County Mutual Fire Reinsurers [7080 - 9060] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [7080 - 7093] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    Directors and officers serve for one year from election, and remain in office until successors 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 6. County Mutual Fire Reinsurers [7080 - 9060] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [7080 - 7093] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 7092. The directors and all of such officers shall hold office for one year from the date of their election, and until their successors are elected and qualified. (Enacted by Stats. 1935, Ch. 145.)
  150. 7093.

    ## 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 6. County Mutual Fire Reinsurers [7080 - 9060] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [7080 - 7093] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    The treasurer and secretary must give bonds to the reinsurer in amounts set by the 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 6. County Mutual Fire Reinsurers [7080 - 9060] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Formation and Organization [7080 - 7093] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 7093. The treasurer and secretary shall give bonds to the reinsurer in such amounts as are prescribed by the board of directors, conditioned upon the faithful performance of their duties. (Enacted by Stats. 1935, Ch. 145.)
  151. 710.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    If there are written articles of agreement or association, a copy must accompany the certificates.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 710. If there are any written articles of agreement or association, a copy thereof shall accompany such certificates. (Enacted by Stats. 1935, Ch. 145.)
  152. 711.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    A foreign-organized insurer must file the required certificate and articles, with limited information allowed to be omitted, and the affidavit must be made by the chief executive officer or a U.S.-based manager.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 711. An insurer organized out of the United States shall also file such certificate and articles, but the certificate need not contain the names of any officers or managers other than those resident within the United States, nor any statement of capital not employed within the United States, and the affidavit shall be made by the chief executive officer or manager in the United States. (Enacted by Stats. 1935, Ch. 145.)
  153. 713.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    Domestic insurers must file copies of change records with the commissioner, and foreign or alien insurers must file changes on request.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. ) (a) A copy of the instrument or record of the action making any change in any of the documents filed with the commissioner pursuant to this article by a domestic insurer, proved by certificates of custodian of the original, or by affidavit, shall be filed with the commissioner. ## 713. (b) Upon request, a foreign or alien insurer shall file any change proved by certificates of custodian of the original, or by affidavit. (Amended by Stats. 2011, Ch. 411, Sec. 3. (AB 1416) Effective January 1, 2012.)
  154. 714.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    The commissioner requires a $72 advance fee for filing papers required under Section 713 when changes are made at one time.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 714. The commissioner shall require the payment of seventy-two dollars ($72), in advance, as a fee for filing papers required under Section 713, on account of change or changes made at one time. (Amended by Stats. 2017, Ch. 534, Sec. 7. (AB 1699) Effective January 1, 2018.)
  155. 715.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    The commissioner may not issue a certificate of authority to a domestic insurer, except for a renewal certificate, if the organization and promotion expenses exceed 12% of the capital stock amount actually paid.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 715. The commissioner shall have no authority to issue a certificate of authority, other than a renewal certificate of authority, to any domestic insurer, whether organized and promoted directly or by means of a holding company, where the commissioner’s examination shows that the expense of organization and promotion, exclusive of attorney fees, accountant fees, and actuary fees, exceeds 12 percent of the total amount actually paid on its capital stock. (Amended by Stats. 1972, Ch. 196.)
  156. 716.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    A foreign or alien applicant cannot get a certificate of authority unless it has actively transacted the relevant classes of insurance for three years, subject to listed exemptions.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 716. No certificate of authority shall be granted to a foreign or alien applicant that has not actively transacted for three years the classes of insurance for which it seeks to be admitted. This section shall not apply to any of the following: (a) An applicant 51 percent or more of whose voting shares are owned by a reputable insurer admitted to this state for at least three years. (b) An applicant which is the successor in interest, by merger, transformation, consolidation, purchase, or other transaction, of substantially all the insurance business and going concern value of a reputable insurer which was, and still is, the dominant factor in such transaction, and could itself have been admitted. (c) An applicant 51 percent or more of whose voting shares are owned by a noninsurance corporation, or a corporation authorized as an insurer but not actively engaged in the insurance business, which corporation, directly or indirectly, owns 51 percent or more of the voting shares of one or more insurers all of which, except the applicant and those which are alien insurers, are reputable insurers admitted to this state for at least three years. (d) An applicant which meets the conditions established by the commissioner for exemption from this section. (Amended by Stats. 1980, Ch. 223, Sec. 1.)
  157. 717.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    The commissioner must review an applicant’s qualifications before granting a certificate of authority, and must issue the certificate unless the applicant is found materially deficient on one or more listed factors.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 717. Before granting a certificate of authority or amended certificate of authority to any applicant, the commissioner shall consider the qualifications of said applicant in respect to the following subjects: (a) capital and surplus; (b) lawfulness and quality of investments; (c) financial stability; (d) reinsurance arrangements; (e) competency, character, and integrity of management; (f) ownership and control of issued and outstanding shares in the case of a capital stock insurer; (g) whether claims under policies are promptly and fairly adjusted and are promptly and fully paid in accordance with law and the terms of policies; (h) fairness and honesty of methods of doing business; (i) method by which said applicant was promoted if any of its promoters remain as stockholders or in management; and (j) hazard to policyholders or creditors. Upon consideration of all relevant qualifications the commissioner shall issue a certificate of authority to such applicant, unless the commissioner shall have made a finding, or findings, that the applicant is materially deficient in respect to one or more of the items as outlined in (a) through (j), above. (Added by Stats. 1965, Ch. 1044.)
  158. 717.1.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    If the applicant is a wholly owned domestic subsidiary of an admitted domestic insurer, the commissioner must issue a certificate of authority within 180 days of application unless the applicant is found substantially deficient under Section 717.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 717.1. Where the applicant is a wholly owned domestic subsidiary of an admitted domestic insurer the commissioner shall issue a certificate of authority to such applicant within 180 days of application unless the commissioner shall have made a finding that the applicant is substantially deficient in respect to one or more of the items set forth in Section 717. (Added by Stats. 1980, Ch. 262, Sec. 1.)
  159. 717.2.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    The commissioner must consider specified evidence when reviewing certain health insurance certificate applications, and may require the applicant to provide information or documents.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 717.2. (a) On and after January 1, 2007, for purposes of Section 717, the commissioner shall consider, with respect to any application for a certificate of authority or amended certificate of authority to transact health insurance, as defined in subdivision (b) of Section 106, in this state, any available evidence regarding any one or more of the following: (1) Any prior history of providing, or arranging to provide for, health care coverage, services, or benefits in this state and the applicant’s history of substantial compliance with applicable state and federal laws, regulations, and requirements. (2) Any prior history in this state or any other state, of providing, or arranging to provide for, health care coverage, services, or benefits for which the applicant is authorized to receive Medicare Program reimbursement or Medicaid Program reimbursement, and the applicant’s history of substantial compliance with applicable state and federal laws, regulations, and requirements. (3) Any prior history on the part of the applicant’s management of providing, or arranging to provide for, health services as a licensed health professional or an individual or entity contracting with a health care service plan or insurer, and the applicant’s history of substantial compliance with state requirements, and applicable federal law, regulations, and requirements. (b) The commissioner may also require the applicant to provide information or documents for the purposes of this section. The commissioner shall consider any other relevant information concerning misconduct. (Added by Stats. 2006, Ch. 758, Sec. 4. Effective January 1, 2007.)
  160. 717.5.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    The commissioner may qualify certain insurers as professional reinsurers, and qualifying insurers must provide requested information and pay a $3,328 filing fee.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 717.5. (a) For purposes of Sections 700 and 717, the commissioner may determine that an insurer admitted and domiciled in this state, or an insurer applying to become admitted and domiciled in this state, including an applicant pursuant to subdivision (a) of Section 709.5, is qualified to be designated as a professional reinsurer, if the commissioner determines that the insurer is all of the following: (1) Principally engaged in the business of reinsurance. (2) Does not conduct significant amounts of direct insurance as percentage of its net premiums. (3) Is not engaged, on an ongoing basis, in the business of soliciting direct insurance. (b) The commissioner may consider any information relevant to this determination. An insurer that holds, or is applying for qualification as, a professional reinsurer, shall provide the commissioner with information or documentation regarding the determinations under this section, upon request. The commissioner may prescribe terms and conditions applicable to the certificate of authority, as appropriate under this section. (c) A domestic, professional reinsurer shall continue to be qualified as long as it continues to meet the requirements set forth in this section. (d) The commissioner may, after notice and an opportunity to be heard, revoke a reinsurer’s qualification, if the reinsurer no longer qualifies under this section. (e) A domestic insurer that is qualified as a professional reinsurer may include that designation in its name, solicitations, and advertisements. (f) An insurer seeking qualification under this section shall pay a filing fee of three thousand three hundred twenty-eight dollars ($3,328), in advance, to the commissioner. (g) The commissioner may adopt regulations 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 or otherwise prescribe requirements consistent with this section. (h) The commissioner may post prescribed requirements, consistent with this section, on the department’s Internet Web site. (Amended by Stats. 2017, Ch. 534, Sec. 8. (AB 1699) Effective January 1, 2018.)
  161. 718.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    The commissioner must not issue a certificate of authority, or amended certificate, to an applicant found unlikely to conduct business in line with state law.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 718. If upon due investigation the commissioner shall find that any applicant for a certificate of authority, or amended certificate of authority, will not conduct its business in conformity with all applicable provisions of the laws of this state, he shall not grant any certificate of authority, or amended certificate of authority, to such applicant. Where the applicant is a wholly owned subsidiary of or under the management and control of an admitted insurer, or is the successor in interest by merger, consolidation, sale and purchase, or otherwise, of such an admitted insurer, and the applicant is without substantial prior operating history, the commissioner may reasonably rely on the known characteristics and reputation of the admitted insurer to the extent relevant and appropriate under the circumstances. (Added by Stats. 1965, Ch. 1044.)
  162. 720.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    The commissioner may, after notice and hearing, issue reasonable rules and amendments needed to carry out this code on certificates of authority.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 720. The commissioner may after notice and hearing promulgate such reasonable rules and regulations, and amendments and additions thereto, as are necessary or convenient to carry out the purposes and provisions of this code governing the issuance, suspension and revocation of certificates of authority. Any such rule or regulation shall be promulgated in accordance with the procedure provided in Chapter 4.5 (commencing with Section 11371) of Part 1 of Division 3 of Title 2 of the Government Code. (Added by Stats. 1965, Ch. 1044.)
  163. 721.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    For certain insurance sections, “applicant” includes the attorney-in-fact of a reciprocal or interinsurance exchange.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 721. As used in Sections 704.5, 716, 717 and 718, the term “applicant” includes the attorney-in-fact of a reciprocal or interinsurance exchange. Wherever reference therein is made to an officer, director, or management of the applicant, such reference is deemed to include the officers, directors, and management of the attorney-in-fact of a reciprocal or interinsurance exchange, and the members of the board of governors or other governing committee of the reciprocal itself. (Added by Stats. 1965, Ch. 1044.)
  164. 725.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    A qualified person may serve as a director of two or more insurers, but the arrangement cannot be used to substantially lessen competition or create a monopoly. The commissioner can investigate, hold a hearing, issue a cease-and-desist order, and later take certificate-of-authority action.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 725. Any person otherwise qualified may be a director of two or more insurers, but no such interlocking directorate shall be used as a means of substantially lessening competition in the business of insurance or of creating a monopoly. Whenever the commissioner has reason to believe that there is a violation of this section, he shall serve upon the insurer or insurers and the director or directors, as the case may be, a notice pursuant to Section 38 of a hearing before the commissioner to be held not less than thirty days after the service of such notice, and requiring such insurer or insurers and such director or directors, as the case may be, to show cause why an order should not be made by the commissioner directing such insurer or insurers and such director or directors, as the case may be, to cease and desist from such violation. If, after a hearing in accordance with the procedure provided in Section 704, the commissioner finds that there has been a violation of this section he shall issue and cause to be served upon such insurer or insurers and such director or directors, as the case may be, an order reciting the facts found by him, and setting forth the respects in which there has been a violation of this section, and directing such insurer or insurers and such director or directors, as the case may be, to cease and desist from such violation. Any such cease and desist order of the commissioner shall be subject to judicial review. Subject to said judicial review, any person violating any such cease and desist order shall be guilty of a misdemeanor and the commissioner may, after a hearing in accordance with the procedure provided in Section 704, decline to grant or renew or may suspend or revoke a certificate of authority of any insurer or insurers violating any such cease and desist order. (Added by Stats. 1949, Ch. 180.)
  165. 726.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    The commissioner must notify the Secretary of State if a certificate of authority to transact insurance is refused to an applicant.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 726. The commissioner shall notify the Secretary of State of any refusal to issue a certificate of authority to transact insurance to an applicant therefor. (Added by Stats. 1979, Ch. 737.)
  166. 728.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    The commissioner may remove or suspend certain insurer-related persons after notice and hearing, and such persons are barred from acting or voting proxies while the order is in effect unless the commissioner consents.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Certificate of Authority [699 - 728] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 728. (a) For the purposes of this section, the following definitions are applicable: (1) “Subject person” means any director, officer, or employee or other natural person who participates in the management, direction, or control of an insurer. (2) “Insurer” means any domestic insurer, and any insurer which is admitted to transact insurance in this state, provided that if a subject person of an insurer is not a resident of California, or operating out of a place of business within California, then the subject person shall be engaged in the direct management, direction, or control of the insurer in California in order to come within the provisions of this section. (b) If, after notice and a hearing, the commissioner finds all of the following, the commissioner may issue an order removing a subject person from his or her office or employment with the insurer and prohibiting the subject person from further participating in any manner in the conduct of the business of the insurer, except with the prior consent of the commissioner: (1) The subject person has engaged in repeated acts of misconduct with respect to the operations of an insurer which have resulted in substantial financial loss to an insurer. (2) The misconduct which forms the pattern is fraudulent, or consists of willful acts or omissions involving personal dishonesty in the acceptance, custody, or payment of money or property on the part of the subject person which has endangered or is likely to endanger the solvency of the insurer. (3) The pattern of misconduct is relevant in that it demonstrates unfitness to continue as a subject person. (c) (1) If the commissioner gives written notice pursuant to subdivision (b) to a subject person, the commissioner may immediately issue an order suspending the subject person from his or her office or employment with the insurer and prohibiting the subject person from further participating in any manner in the conduct of the business of an insurer, except with the prior consent of the commissioner if the commissioner: (A) finds that failure to immediately issue such order threatens the financial solvency of the insurer or may otherwise cause immediate and irreparable financial injury to the insurer (B) serves that subject person and the insurer with written notice of the suspension order; and (C) finds that all of the necessary factors are present which would permit the commissioner, after notice and a hearing, to issue an order pursuant to subdivision (b) removing a subject person from his or her office or employment with the insurer and prohibiting the subject person from further participating in any manner in the conduct of the business of an insurer. (2) Any suspension order issued pursuant to paragraph (1) of this subdivision shall be effective until the date the commissioner dismisses the charges contained in the notice served under subdivision (b) or paragraph (1) of this subdivision, the effective date of an order issued by the commissioner pursuant to subdivision (b), or a court issues a stay of the order pursuant to subdivision (d). (d) Within 10 days after a subject person has been served with an order of suspension pursuant to subdivision (c), the person may apply to the superior court of the county in which the principal office of the insurer is located for a stay of the order pending completion of the proceedings pursuant to subdivision (b), and the court shall have jurisdiction to issue an order staying the suspension. Nothing in this subdivision shall be deemed to authorize the court to issue a stay order on an ex parte basis. (e) (1) If the commissioner finds both of the following, he or she may immediately issue an order suspending a subject person from his or her office or employment with an insurer and prohibiting the subject person from further participating in any manner in the conduct of the business of an insurer, except with the prior consent of the commissioner: (A) the subject person has been charged in an indictment issued by a grand jury, or in an information, complaint, or similar pleading issued by a United States Attorney, district attorney, or other governmental official or agency authorized to prosecute crimes, with a crime punishable by imprisonment for a term exceeding one year and which involves as one of its necessary elements a fraudulent act or an act of dishonesty in the acceptance, custody, or payment of money or property; and (B) that a failure to immediately issue the order threatens the financial solvency of the insurer, or may otherwise cause immediate and irreparable financial injury to the insurer. In the event the criminal proceedings are terminated other than by judgment of conviction, an order issued pursuant to paragraph (1) of this subdivision shall be deemed rescinded as if it had not been issued. (2) If the commissioner finds both of the following, he or she may immediately issue an order removing a subject person from his or her office or employment with an insurer and prohibiting the subject person from further participating in any manner in the conduct of the business of the insurer, except with the prior consent of the commissioner: (A) the person has been convicted during the preceding five years of a crime that is punishable by imprisonment for a term exceeding one year and that has as one of its necessary elements a fraudulent act or an act of dishonesty in the accepting, custody, or payment of money or property; and (B) that a failure to immediately issue the order threatens the financial solvency of the insurer, or may otherwise cause immediate and irreparable financial injury to the insurer. (3) The fact that any subject person charged with a crime involving as one of its necessary elements a fraudulent act or any act of dishonesty in the acceptance, custody, or payment of money or property is not convicted of that crime shall not preclude the commissioner from issuing an order regarding the subject person pursuant to other provisions of this code. (f) (1) Within 30 days after an order is issued pursuant to subdivision (c) or (e), the person to whom the order is issued may choose to do either of the following: (A) file with the commissioner an application for a hearing on the order. The commissioner shall, upon written request of the person, extend the 30-day period by an additional 30 days provided the request is filed with the commissioner within 30 days after the order is issued. If the commissioner fails to commence the hearing within 15 business days after the application is filed, or within a longer period of time to which the person consents, the order shall be deemed rescinded as if it had not been issued. Within 30 days after the hearing, the commissioner shall affirm, modify, or rescind the order; otherwise, the order shall be deemed rescinded as if it had not been issued, or (B) petition for judicial review of the order pursuant to Section 1085 of the Code of Civil Procedure, where the court shall exercise its independent judgment on the evidence. (2) The right of any person to whom an order is issued pursuant to subdivision (c) or (e) to petition for judicial review of the order shall not be affected by the failure of that person to apply to the commissioner for a hearing on the order as provided by this subdivision. (g) (1) Any person to whom an order is issued pursuant to subdivision (b), (c), or (e) may apply to the commissioner to modify or rescind the order. The commissioner shall not grant the application unless he or she finds that it is reasonable to believe that the person will, if and when he or she becomes a subject person, comply with all of the applicable provisions of this code and of any regulation or order issued thereunder. (2) The right of any person to whom an order is issued pursuant to subdivision (b), (c), or (e) to petition for judicial review of the order shall not be affected by the failure of that person to apply to the commissioner pursuant to paragraph (1). (h) (1) It is unlawful for any subject person or former subject person to whom an order is issued pursuant to subdivision (b), (c) or (e) to do any of the following as long as the order is effective, except with the prior consent of the commissioner: (A) to serve or act as a subject person for or in any insurer; or (B) to directly or indirectly solicit, procure, or transfer or attempt to transfer or vote any proxy, consent or authorization with respect to any shares or other securities of any insurer having voting rights. (2) If, after notice and a hearing, the commissioner finds that any person has violated paragraph (1) of this subdivision, the commissioner may order that person to pay to the commissioner a civil penalty in an amount the commissioner may specify; provided however, that the amount of the civil penalty shall not exceed one thousand dollars ($1,000) for each violation or, in the case of a continuing violation, one thousand dollars ($1,000) for each day for which the violation continues, which may be recovered in a civil action. In determining the amount of civil penalty to be paid to the commissioner under this paragraph, the commissioner shall consider the financial resources and good faith of the person charged, the gravity of the violation, the history of previous violations by the person, and such other factors as in the opinion of the commissioner may be relevant. (3) If, after notice and a hearing, the commissioner finds that any insurer has knowingly aided and abetted a subject person in a violation of paragraph (1) of this subdivision, the commissioner may order that insurer to pay to the commissioner a civil penalty in an amount the commissioner may specify; provided however, that the amount of the civil penalty shall not exceed ten thousand dollars ($10,000) for each violation, or in the case of a continuing violation, ten thousand dollars ($10,000) for each day for which the violation continues up to a maximum of one hundred thousand dollars ($100,000), which may be recovered in a civil action. Continuation of the subject person’s salary or other employee benefits pending final disposition shall not be considered aiding and abetting a subject person. In determining the amount of civil penalty to be paid to the commissioner under this paragraph, the commissioner shall consider the financial resources and good faith of the person charged, the gravity of the violation, the history of previous violations by the person, and such other factors as in the opinion of the commissioner may be relevant. (i) Except as otherwise provided by this section any hearing required by this section shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, subject to the following: (1) At the option of the subject person, all such hearings shall be a closed session and private, and the records of the hearings shall not be made public unless the hearing results in a final order adverse to the subject person. (2) Where judicial review is sought by the subject person pursuant to Section 11523 of the Government Code, the court shall exercise its independent judgment upon the evidence. (3) When a subject person to whom an order has been issued pursuant to subdivision (c) or (e) applies to the commissioner for a hearing pursuant to subparagraph (A) of paragraph (1) of subdivision (f), the Office of Administrative Hearings shall schedule the hearing on a priority basis at the earliest possible time and once the hearing is commenced, it shall not be continued for more than three business days without the consent of the subject person. (4) If the Office of Administrative Hearings cannot schedule the commencement of a hearing within 15 business days as provided by paragraph (1) of subdivision (f), and the subject person does not waive his or her right to a hearing commencing within 15 days, the hearings may be conducted by administrative law judges appointed by the commissioner. In the event the subject person chooses to accept a hearing before an administrative law judge appointed by the commissioner, the hearing shall be completed within 45 days of commencement unless additional time is requested by the subject person. If the hearing is not completed within 45 days, the order shall be deemed rescinded as if it had not been issued. (j) Nothing in this section is intended to or shall be construed to create a private cause of action against an offending subject person or an insurer or production agency that aids and abets a subject person, based on the standards established by this section or the commissioner’s findings or orders pursuant to this section. (k) Notwithstanding this section, or any other authority of the commissioner, the commissioner shall not have the power to remove or replace either the Board of Directors or the President of the State Compensation Insurance Fund. (Amended by Stats. 2006, Ch. 740, Sec. 3.2. Effective January 1, 2007.)
  167. 729.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Examination by Commissioner [729 - 738] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    This section defines “company,” “examiner,” and “person” for this article.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Examination by Commissioner [729 - 738] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 729. As used in this article, the following terms have the following meanings: (a) “Company” means any person engaging in, or proposing or attempting to engage in, any transaction or kind of insurance or surety business and any person or group of persons who may otherwise be subject to the administrative, regulatory, or taxing authority of the commissioner. (b) “Examiner” means any individual or firm authorized by the commissioner to conduct an examination under this article. (c) “Person” means any person, association, organization, business trust, partnership, limited liability company, or corporation, or any affiliate thereof. (Amended by Stats. 1994, Ch. 1010, Sec. 173. Effective January 1, 1995.)
  168. 730.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Examination by Commissioner [729 - 738] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    The commissioner must examine insurers in specified situations and at least every five years, and admitted insurers must keep records needed to show financial condition for six years total.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Examination by Commissioner [729 - 738] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 730. (a) The commissioner, whenever he or she deems necessary or whenever he or she is requested by verified petition, signed by 25 persons interested as shareholders, policyholders, or creditors of any admitted insurer showing that the insurer is insolvent under this code, or upon information that any insurer has violated any provision of Article 7 (commencing with Section 800), shall examine the business and affairs of the insurer. The commissioner shall so examine every domestic insurer before issuing to it a certificate of authority other than a renewal. (b) The commissioner may conduct an examination under this article of any company as often as the commissioner in his or her discretion deems appropriate but shall, at a minimum, conduct an examination of every insurer admitted in this state not less frequently than once every five years. In scheduling and determining the nature, scope, and frequency of the examinations, the commissioner shall consider the results of financial statement analyses and ratios, changes in management or ownership, actuarial opinions, reports of independent certified public accountants, market analysis results, including consumer complaint analysis, evaluation of ongoing regulatory activities, analysis of data derived from industry surveys or interrogatories, and other criteria as set forth in the Examiner’s Handbook or in the Market Regulation Handbook adopted by the National Association of Insurance Commissioners that are in effect when the commissioner exercises discretion under this section. (c) For purposes of completing an examination of any company under this article, the commissioner may examine or investigate any person, or the business of any person, insofar as the examination or investigation is, in the discretion of the commissioner, necessary or material to the examination of the company. (d) In lieu of an examination under this article of any foreign or alien insurer admitted in this state, the commissioner may accept an examination report on the company as prepared by the insurance department of the company’s state of domicile or port-of-entry state until January 1, 1994. Thereafter, these reports may only be accepted if (1) the insurance department was at the time of the examination accredited under the National Association of Insurance Commissioner’s Financial Regulation Standards and Accreditation Program, or (2) the examination is performed under the supervision of an accredited insurance department or with the participation of one or more examiners who are employed by an accredited state insurance department and who, after a review of the examination work papers and report, state under oath that the examination was performed in a manner consistent with the standards and procedures required by their insurance department. (e) The commissioner may postpone a market conduct examination otherwise required by this article for a period of up to three years if information derived from a market analysis indicates all of the following: (1) The prior examination of the insurer resulted in no significant negative findings. (2) The number of consumer complaints received by the insurer is in the lowest quartile of complaints, on a ratio basis, for insurers in that line of business. (3) The market analysis identifies no other issues of significant concern. (f) An admitted insurer shall maintain all records necessary to determine its financial condition for the current year plus the five previous years. (Amended by Stats. 2017, Ch. 417, Sec. 8. (AB 1696) Effective January 1, 2018.)
  169. 731.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Examination by Commissioner [729 - 738] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    When a foreign insurer applies for admission, the commissioner may examine its insurance business and affairs.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Examination by Commissioner [729 - 738] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 731. Whenever any foreign insurer applies for admission the commissioner may make, or cause to be made by the insurance authority of the State where the insurer is organized, an examination of its insurance business and affairs. (Enacted by Stats. 1935, Ch. 145.)
  170. 732.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Examination by Commissioner [729 - 738] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    An insurer from outside the United States is treated as organized in any state where it keeps the policyholder-protecting deposits required by this code.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Examination by Commissioner [729 - 738] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 732. An insurer organized or existing under the laws of any country outside of the United States shall be deemed to be organized, within the meaning of this article, in any State wherein such insurer maintains the deposits to protect policyholders as required by this code. (Enacted by Stats. 1935, Ch. 145.)
  171. 733.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Examination by Commissioner [729 - 738] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    The commissioner may examine an insurance company’s records and affairs, must check compliance and condition, and may appraise property and use additional appropriate guidelines or specialists.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Examination by Commissioner [729 - 738] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 733. In making such examination the commissioner: (a) Shall have free access to all the books and papers of the company. (b) Shall thoroughly inspect and examine all its affairs. (c) Shall ascertain its condition and ability to fulfill its obligations. (d) Shall ascertain if it has complied with all laws applicable to its insurance transactions. (e) May appraise or cause to be appraised by competent appraisers appointed by him or her all property in which the insurer has or claims an interest, or which is security, in any form, for the payment of any debt or obligation to the insurer. All such appraisals of real property shall be in writing. (f) Shall, in conducting the examination, observe those guidelines and procedures set forth in the Examiner’s Handbook adopted by the National Association of Insurance Commissioners. The commissioner may also employ other guidelines or procedures which the commissioner may deem appropriate. (g) May retain attorneys, appraisers, independent actuaries, independent certified public accountants, or other professionals and specialists as examiners, or any of the employees of the department assigned by the commissioner to carry out the purposes of this article, the cost of which shall be borne by the company subject to examination. (Amended by Stats. 1992, Ch. 614, Sec. 1.2. Effective January 1, 1993.)
  172. 734.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Examination by Commissioner [729 - 738] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    Companies and related staff must give insurance examiners access to records and help with the examination; the commissioner may issue subpoenas, administer oaths, and question people under oath.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Examination by Commissioner [729 - 738] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 734. Every company or person from whom information is sought, and its officers, directors, employees, and agents, shall provide to the examiners appointed pursuant to this article, timely, convenient, and free access at all reasonable hours at its offices to all books, records, accounts, papers, documents, and any or all computer or other recordings relating to the property, assets, business, and affairs of the company being examined. The officers, directors, employees, and agents of the company or person shall assist the examiners and aid in the examination so far as it is in their power to do so. The commissioner shall have the power to issue subpoenas, to administer oaths, and to examine under oath any person as to any matter pertinent to the examination. If he or she finds the books to be carelessly or improperly kept or posted, he or she shall employ sworn experts to rewrite, post, and balance the books at the insurer’s expense. (Amended by Stats. 1992, Ch. 614, Sec. 1.3. Effective January 1, 1993.)
  173. 734.1.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Examination by Commissioner [729 - 738] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    The examiner must file a verified report within 60 days after an examination ends, and the department must send it to the examined company with a 30-day response notice.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Examination by Commissioner [729 - 738] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 734.1. (a) No later than 60 days following completion of the examination, the examiner in charge shall file with the department a verified written report of the examination under oath. Upon receipt of the verified report, the department shall transmit the report to the company examined, together with a notice that the company has 30 days to make a written submission or rebuttal with respect to any matters contained in the examination report. (b) Within 30 days of the end of the period allowed for the receipt of written submissions or rebuttals, the commissioner shall fully consider and review the report, together with any written submissions or rebuttals and any relevant portions of the examiner’s workpapers, and shall either adopt the report as filed or with modifications or corrections, or reject the report with directions to the examiners to reopen the examination for purposes of obtaining additional data, documentation, or information, and refiling pursuant to subdivision (a). (c) (1) Nothing contained in this article shall be construed to limit the commissioner’s authority to terminate or suspend any examination in order to pursue other legal or regulatory action pursuant to the insurance laws of this state. (2) If the commissioner terminates or suspends an examination that includes an examination of claims practices, the commissioner shall within 10 days of the termination or suspension transmit a copy of the complete examination file to the State Bureau of Audits. The State Auditor shall audit the file pursuant to Section 10527 of the Government Code to determine the propriety of the termination or suspension. (Amended by Stats. 2000, Ch. 997, Sec. 1. Effective January 1, 2001.)
  174. 735.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Examination by Commissioner [729 - 738] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    A designated officer of each domestic insurer must tell the governing body about commissioner examination reports at the next meeting and ensure the report is noted in the minutes.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Examination by Commissioner [729 - 738] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 735. The hereinafter designated officer of each domestic insurer shall inform the members present at the next meeting of its governing body of the receipt from the office of the commissioner of the report of every examination of such insurer, both in the form first formally prepared by the examiners and in the form as finally settled and officially filed by the commissioner or a deputy designated by him. Such officer shall also inform such members that a copy of such report is available for inspection of any member of such governing body. There shall be entered in the minutes of each such meeting the fact that such officer did so inform the members present. The officer above referred to, in the case of a stock or mutual insurer, shall be its secretary or comparable officer if there is no secretary. This section shall specifically apply to reciprocals and interinsurance exchanges and in that case the officer above referred to shall be the principal individual, partner or officer of its attorney-in-fact, and “governing body” shall have reference to the body exercising the subscribers’ rights provided for in Section 1308. (Added by Stats. 1980, Ch. 10, Sec. 1. Effective February 12, 1980.)
  175. 735.5.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Examination by Commissioner [729 - 738] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    The commissioner may use and, in appropriate cases, make public examination materials for legal or regulatory action, but most examination papers and related documents must be kept confidential and are not subject to subpoena.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Examination by Commissioner [729 - 738] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 735.5. (a) Nothing contained in this article shall be construed to limit the commissioner’s authority to use and, if appropriate, to make public, any final or preliminary examination report, any examiner or company workpapers or other documents, or any other information discovered or developed during the course of any examination in the furtherance of any legal or regulatory action which the commissioner may, in his or her discretion, deem appropriate. (b) Nothing contained in this code shall prevent or be construed as prohibiting the commissioner from disclosing the content of an examination report, preliminary examination report or results, market analysis data, or any matter relating thereto, to the insurance department of this or any other state or country, or to law enforcement officials of this or any other state or agency of the federal government at any time, or to the National Association of Insurance Commissioners, provided the recipient of the report or matters relating thereto agrees in writing to hold it confidential and in a manner consistent with this article, unless the prior written consent of the company to which it pertains has been obtained. (c) All working papers, recorded information, documents, and copies thereof produced by, obtained by, or disclosed to the commissioner or any other person in the course of an examination made pursuant to this article shall be given confidential treatment and are not subject to subpoena and shall not be made public by the commissioner or any other person, except to the extent provided in subdivision (a) or (b). (Amended by Stats. 2009, Ch. 234, Sec. 3. (AB 299) Effective January 1, 2010.)
  176. 736.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Examination by Commissioner [729 - 738] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    Examination and analysis costs are generally paid by the insurer, organization, or person examined, and the commissioner may withhold or revoke licensing documents if payment is not made promptly.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Examination by Commissioner [729 - 738] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 736. All examinations and analyses performed pursuant to Section 730 shall be at the expense of the insurer, organization, or person examined, except that special examinations which are in addition to regular examinations may be at the expense of the state in the discretion of the commissioner. The costs and expenses of all of those examinations shall be paid from the support appropriation for the Department of Insurance current at the time of the examination but shall be charged to and collected from the insurer, organization or person examined. If any insurer, organization, or person refuses to pay those costs and expenses promptly when due, the commissioner may refuse to issue its certificate of authority, certificate of exemption, or license, as the case may be, and may revoke any existing certificate of authority, certificate of exemption, or license. (Amended by Stats. 2009, Ch. 234, Sec. 4. (AB 299) Effective January 1, 2010.)
  177. 737.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Examination by Commissioner [729 - 738] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    The section gives immunity for good-faith statements or conduct by the commissioner, authorized representatives, and appointed examiners while carrying out this article, and protects good-faith communicators of information to them. It also gives certain persons a right to attorney’s fees and costs if they prevail in specified tort litigation.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Examination by Commissioner [729 - 738] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 737. (a) No cause of action shall arise nor shall any liability be imposed against the commissioner, the commissioner’s authorized representatives, or any examiner appointed by the commissioner for any statements made or conduct performed in good faith while carrying out the provisions of this article. (b) No cause of action shall arise, nor shall any liability be imposed against any person for the act of communicating or delivering information or data to the commissioner or the commissioner’s authorized representative or examiner pursuant to an examination made under this article, if the act of communication or delivery was performed in good faith and without fraudulent intent or the intent to deceive. (c) This section shall not abrogate or modify in any way any common law or statutory privilege or immunity previously enjoyed by any person identified in subdivision (a). (d) A person identified in subdivision (a) shall be entitled to an award of attorney’s fees and costs if he or she is the prevailing party in a civil cause of action for libel, slander, or any other relevant tort arising out of activities engaged in while carrying out the provisions of this article and the party bringing the action was not substantially justified in doing so. For purposes of this section, a proceeding is substantially justified if it had a reasonable basis in law or fact at the time that it was initiated. (Added by Stats. 1992, Ch. 614, Sec. 1.6. Effective January 1, 1993.)
  178. 738.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Examination by Commissioner [729 - 738] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    The commissioner has the same power to examine the State Compensation Insurance Fund as the commissioner has for other insurers, unless the fund is specifically exempted by reference.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Examination by Commissioner [729 - 738] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 738. The commissioner shall have the same powers and authority to examine the State Compensation Insurance Fund as are conferred upon him by law relative to the examination of other insurers except where the fund is specifically exempted by reference. (Amended by Stats. 2006, Ch. 740, Sec. 3.3. Effective January 1, 2007.)
  179. 739.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.1. Risk-Based Capital for Insurers [739 - 739.12] ( Article 4.1 added by Stats. 1996, Ch. 708, Sec. 1. )

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    This section defines terms used in the risk-based capital article for insurers.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.1. Risk-Based Capital for Insurers [739 - 739.12] ( Article 4.1 added by Stats. 1996, Ch. 708, Sec. 1. ) ## 739. As used in this article, these terms shall have the following meanings: (a) “Adjusted RBC Report” means a Risk-Based Capital (RBC) report that has been adjusted by the commissioner in accordance with subdivision (b) or (c) of Section 739.2. (b) “Corrective Order” means an order issued by the commissioner specifying corrective actions that the commissioner has determined are required. (c) “Domestic insurer” means any life or health insurer or property and casualty insurer organized in this state. (d) “Foreign insurer” means any life or health insurer or property and casualty insurer that is licensed to do business in this state but is not domiciled in this state. (e) “Life or health insurer” means any admitted insurer issuing insurance subject to Part 2 (commencing with Section 10110) of Division 2, or a licensed property and casualty insurer writing only disability insurance. (f) “NAIC” means the National Association of Insurance Commissioners. (g) “Negative trend” means, with respect to a life or health insurer, a negative trend over a period of time, as determined in accordance with the “Trend Test Calculation” included in the RBC Instructions defined in subdivision (i). (h) “Property and casualty insurer” means any admitted insurer writing insurance as described in Section 102, 103, 105, 107, 108, 109, 110, 111, 112, 113, 114, 115, 116, 118, 119.5, 119.6, or 120, but does not include monoline mortgage guaranty insurers, financial guaranty insurers, or title insurers. (i) “RBC Instructions” means the RBC Report, including risk-based capital instructions adopted by the NAIC, and as the RBC Instructions may be amended by the NAIC from time to time in accordance with the procedures adopted by the NAIC. (j) “RBC Level” means an insurer’s Company Action Level RBC, Regulatory Action Level RBC, Authorized Control Level RBC, or Mandatory Control Level RBC where: (1) “Company Action Level RBC” means, with respect to any insurer, the product of 2.0 and its Authorized Control Level RBC. (2) “Regulatory Action Level RBC” means the product of 1.5 and its Authorized Control Level RBC. (3) “Authorized Control Level RBC” means the number determined under the risk-based capital formula in accordance with the RBC Instructions. (4) “Mandatory Control Level RBC” means the product of .70 and the Authorized Control Level RBC. (k) “RBC Plan” means a comprehensive financial plan containing the elements specified in subdivision (b) of Section 739.3. If the commissioner rejects the RBC Plan, and it is revised by the insurer, with or without the commissioner’s recommendation, the plan shall be called the “Revised RBC Plan.” (l) “RBC Report” means the report required in Section 739.2. (m) “Total Adjusted Capital” means the sum of: (1) An insurer’s statutory capital and surplus. (2) Other items, if any, that the RBC Instructions may provide. (Amended by Stats. 2013, Ch. 321, Sec. 4. (AB 1391) Effective January 1, 2014.)
  180. 739.10.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.1. Risk-Based Capital for Insurers [739 - 739.12] ( Article 4.1 added by Stats. 1996, Ch. 708, Sec. 1. )

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    A foreign insurer must file an RBC Report and, on request, provide a copy of any RBC Plan to the commissioner. In certain RBC event conditions, the commissioner may require an RBC Plan and may seek court action over liquidation-related property.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.1. Risk-Based Capital for Insurers [739 - 739.12] ( Article 4.1 added by Stats. 1996, Ch. 708, Sec. 1. ) ## 739.10. (a) Any foreign insurer shall, upon the written request of the commissioner, submit to the commissioner an RBC Report as of the end of the calendar year just ended the later of: (1) The date an RBC Report would be required to be filed by a domestic insurer under this chapter. (2) Fifteen days after the request is received by the foreign insurer. Any foreign insurer shall, at the written request of the commissioner, promptly submit to the commissioner a copy of any RBC Plan that is filed with the insurance commissioner of any other state. (b) In the event of a Company Action Level Event or Regulatory Action Level Event with respect to any foreign insurer as determined under the RBC statute applicable in the state of domicile of the insurer, or, if no RBC provision is in force in that state, under the provisions of this chapter, if the insurance commissioner of the state of domicile of the foreign insurer fails to require the foreign insurer to file an RBC Plan in the manner specified under the RBC statute, or, if no RBC provision is in force in the state, under Section 739.3, the commissioner may require the foreign insurer to file an RBC Plan with the commissioner. In such event, the failure of the foreign insurer to file an RBC Plan with the commissioner shall be grounds to order the insurer to cease and desist from writing new insurance business in this state. (c) In the event of a Mandatory Control Level Event with respect to any foreign insurer, if no domiciliary receiver has been appointed with respect to the foreign insurer under the rehabilitation and liquidation statute applicable in the state of domicile of the foreign insurer, the commissioner may make application to the superior court with respect to the liquidation of property of foreign insurers found in this state, and the occurrence of the Mandatory Control Level Event shall be considered adequate grounds for the application. (Added by Stats. 1996, Ch. 708, Sec. 1. Effective January 1, 1997.)
  181. 739.11.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.1. Risk-Based Capital for Insurers [739 - 739.12] ( Article 4.1 added by Stats. 1996, Ch. 708, Sec. 1. )

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    If part of this article is held invalid, the rest still remains in effect.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.1. Risk-Based Capital for Insurers [739 - 739.12] ( Article 4.1 added by Stats. 1996, Ch. 708, Sec. 1. ) ## 739.11. If any provision of this article, or the application thereof to any person or circumstance, is held invalid, such determination shall not affect the provisions or applications of this article that can be given effect without the invalid provision or application, and to that end the provisions of this article are severable. (Added by Stats. 1996, Ch. 708, Sec. 1. Effective January 1, 1997.)
  182. 739.12.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.1. Risk-Based Capital for Insurers [739 - 739.12] ( Article 4.1 added by Stats. 1996, Ch. 708, Sec. 1. )

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    The commissioner’s notices to an insurer are effective on dispatch if sent by registered or certified mail; otherwise, they are effective when the insurer receives them. The commissioner must also send copies of certain notices to the Governor.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.1. Risk-Based Capital for Insurers [739 - 739.12] ( Article 4.1 added by Stats. 1996, Ch. 708, Sec. 1. ) ## 739.12. (a) All notices by the commissioner to an insurer that may result in regulatory action hereunder shall be effective upon dispatch if transmitted by registered or certified mail, or in the case of any other transmission shall be effective upon the insurer’s receipt of such notice. (b) Copies of all notices from the commissioner to the State Compensation Insurance Fund under this article shall be sent to the Governor. (Amended by Stats. 2006, Ch. 740, Sec. 3.7. Effective January 1, 2007.)
  183. 739.2.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.1. Risk-Based Capital for Insurers [739 - 739.12] ( Article 4.1 added by Stats. 1996, Ch. 708, Sec. 1. )

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    Domestic insurers must file RBC reports by March 15 and may have to file them with other state insurance commissioners if requested in writing. Insurers must also seek to keep capital above required RBC levels.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.1. Risk-Based Capital for Insurers [739 - 739.12] ( Article 4.1 added by Stats. 1996, Ch. 708, Sec. 1. ) ## 739.2. (a) Every domestic insurer shall, on or prior to each March 15 (the “filing date”), prepare and submit to the commissioner a report of its RBC Levels as of the end of the calendar year just ended, in a form and containing such information as is required by the RBC Instructions. In addition, every domestic insurer shall file its RBC Report: (1) With the NAIC in accordance with the RBC Instructions. (2) With the insurance commissioner in any state in which the insurer is authorized to do business, if the insurance commissioner has notified the insurer of its request in writing, in which case the insurer shall file its RBC Report not later than the later of: (A) Fifteen days from the receipt of notice to file its RBC Report with that state. (B) The filing date. (b) A life or health insurer’s RBC shall be determined in accordance with the formula set forth in the RBC Instructions. The formula shall take into account, and may adjust for the covariance between, the following: (1) The risk with respect to the insurer’s assets. (2) The risk of adverse insurance experience with respect to the insurer’s liabilities and obligations. (3) The interest rate risk with respect to the insurer’s business. (4) All other business risks and such other relevant risks as are set forth in the RBC Instructions. In each case, these shall be determined by applying the factors in the manner set forth in the RBC Instructions. (c) A property and casualty insurer’s RBC shall be determined in accordance with the formula set forth in the RBC Instructions. The formula shall take into account and may adjust for the covariance between the following: (1) Asset risk. (2) Credit risk. (3) Underwriting risk. (4) All other business risks and any other relevant risks as are set forth in the RBC Instructions. (d) An excess of capital over the amount produced by the risk-based capital requirements contained in this article and the formulas, schedules, and instructions referenced in this article is desirable in the business of insurance. Accordingly, insurers shall seek to maintain capital above the RBC levels required by this article. Additional capital is used and useful in the insurance business and helps to secure an insurer against various risks inherent in, or affecting, the business of insurance and not accounted for or only partially measured by the risk-based capital requirements contained in this article. (e) If a domestic insurer files an RBC Report that in the judgment of the commissioner is inaccurate, then the commissioner shall adjust the RBC Report to correct the inaccuracy and shall notify the insurer of the adjustment. The notice shall contain a statement of the reason for the adjustment. An RBC Report as so adjusted is referred to as an Adjusted RBC Report. (Added by Stats. 1996, Ch. 708, Sec. 1. Effective January 1, 1997.)
  184. 739.3.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.1. Risk-Based Capital for Insurers [739 - 739.12] ( Article 4.1 added by Stats. 1996, Ch. 708, Sec. 1. )

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    If an insurer has a Company Action Level Event, it must prepare and submit an RBC Plan to the commissioner.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.1. Risk-Based Capital for Insurers [739 - 739.12] ( Article 4.1 added by Stats. 1996, Ch. 708, Sec. 1. ) ## 739.3. (a) “Company Action Level Event” means any of the following events: (1) The filing of an RBC Report by an insurer that indicates any of the following: (A) The insurer’s Total Adjusted Capital is greater than or equal to its Regulatory Action Level RBC but less than its Company Action Level RBC. (B) If a life or health insurer, the insurer has Total Adjusted Capital that is greater than or equal to its Company Action Level RBC but less than the product of its Authorized Control Level RBC and 3.0, and has a negative trend. (C) If a property and casualty insurer, the insurer has Total Adjusted Capital that is greater than or equal to its Company Action Level RBC but less than the product of its Authorized Control Level RBC and 3.0, and triggers the trend test determined in accordance with the trend test calculation included in the Property and Casualty RBC instructions. (2) The notification by the commissioner to the insurer of an Adjusted RBC Report that indicates the event in paragraph (1), provided that the insurer does not challenge the Adjusted RBC Report under Section 739.7. (3) If the insurer challenges, under Section 739.7, an Adjusted RBC Report that indicates the event in paragraph (1), the notification by the commissioner to the insurer that the commissioner has, after a hearing, rejected the insurer’s challenge. (b) In the event of a Company Action Level Event, the insurer shall prepare and submit to the commissioner a comprehensive financial plan that shall do all of the following: (1) Identify the conditions in the insurer that contribute to the Company Action Level Event. (2) Contain proposals of corrective actions that the insurer intends to take and would be expected to result in the elimination of the Company Action Level Event. (3) Provide projections of the insurer’s financial results in the current year and at least the four succeeding years, both in the absence of proposed corrective actions and giving effect to the proposed corrective actions, including projections of statutory operating income, net income, capital, or surplus, or a combination. The projections for both new and renewal business may include separate projections for each major line of business and separately identify each significant income, expense, and benefit component. (4) Identify the key assumptions impacting the insurer’s projections and the sensitivity of the projections to the assumptions. (5) Identify the quality of, and problems associated with, the insurer’s business, including, but not limited to, its assets, anticipated business growth and associated surplus strain, extraordinary exposure to risk, mix of business, and use of reinsurance in each case, if any. (c) The RBC Plan shall be submitted as follows: (1) Within 45 days of the Company Action Level Event. (2) If the insurer challenges an Adjusted RBC Report pursuant to Section 739.7, within 45 days after notification to the insurer that the commissioner has, after a hearing, rejected the insurer’s challenge. (d) Within 60 days after the submission by an insurer of an RBC Plan to the commissioner, the commissioner shall notify the insurer whether the RBC Plan shall be implemented or is, in the judgment of the commissioner, unsatisfactory. If the commissioner determines that the RBC Plan is unsatisfactory, the notification to the insurer shall set forth the reasons for the determination, and may set forth proposed revisions that will render the RBC Plan satisfactory, in the judgment of the commissioner. Upon notification from the commissioner, the insurer shall prepare a Revised RBC Plan, which may incorporate by reference revisions proposed by the commissioner, and shall submit the Revised RBC Plan to the commissioner as follows: (1) Within 45 days after the notification from the commissioner. (2) If the insurer challenges the notification from the commissioner under Section 739.7, within 45 days after a notification to the insurer that the commissioner has, after a hearing, rejected the insurer’s challenge. (e) In the event of a notification by the commissioner to an insurer that the insurer’s RBC Plan or Revised RBC Plan is unsatisfactory, the commissioner may, at his or her discretion, subject to the insurer’s right to a hearing under Section 739.7, specify in the notification that the notification constitutes a Regulatory Action Level Event. (f) Every domestic insurer that files an RBC Plan or Revised RBC Plan with the commissioner shall file a copy of the RBC Plan or Revised RBC Plan with the insurance commissioner in any state in which the insurer is authorized to do business if both of the following apply: (1) That state has an RBC provision substantially similar to subdivision (a) of Section 739.8. (2) The insurance commissioner of that state has notified the insurer of its request for the filing in writing, in which case the insurer shall file a copy of the RBC Plan or Revised RBC Plan in that state no later than the later of: (A) Fifteen days after the receipt of notice to file a copy of its RBC Plan or Revised RBC Plan with the state. (B) The date on which the RBC Plan or Revised RBC Plan is filed under subdivision (c) of Section 739.7. (Amended by Stats. 2015, Ch. 348, Sec. 3. (AB 1515) Effective January 1, 2016.)
  185. 739.4.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.1. Risk-Based Capital for Insurers [739 - 739.12] ( Article 4.1 added by Stats. 1996, Ch. 708, Sec. 1. )

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    If a Regulatory Action Level Event happens, the commissioner must require an RBC Plan or Revised RBC Plan, examine the insurer, and issue a corrective order. The insurer must submit the plan within 45 days.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.1. Risk-Based Capital for Insurers [739 - 739.12] ( Article 4.1 added by Stats. 1996, Ch. 708, Sec. 1. ) ## 739.4. (a) “Regulatory Action Level Event” means, with respect to any insurer, any of the following events: (1) The filing of an RBC Report by the insurer that indicates that the insurer’s Total Adjusted Capital is greater than or equal to its Authorized Control Level RBC but less than its Regulatory Action Level RBC. (2) The notification by the commissioner to an insurer of an Adjusted RBC Report that indicates the event in paragraph (1), provided the insurer does not challenge the Adjusted RBC Report under Section 739.7. (3) If the insurer challenges an Adjusted RBC Report that indicates the event in paragraph (1) under Section 739.7, the notification by the commissioner to the insurer that the commissioner has, after a hearing, rejected the insurer’s challenge. (4) The failure of the insurer to file an RBC Report by the filing date, unless the insurer has provided an explanation for such failure that is satisfactory to the commissioner and has cured the failure within 10 days after the filing date. (5) The failure of the insurer to submit an RBC Plan to the commissioner within the time period set forth in subdivision (c) of Section 739.3. (6) Notification by the commissioner to the insurer of the following: (A) The RBC Plan or revised RBC Plan submitted by the insurer is, in the judgment of the commissioner, unsatisfactory. (B) That notification constitutes a Regulatory Action Level Event with respect to the insurer, provided the insurer has not challenged the determination under Section 739.7. (7) If the insurer challenges a determination by the commissioner under paragraph (6) pursuant to Section 739.7, the notification by the commissioner to the insurer that the commissioner has, after a hearing, rejected such challenge. (8) Notification by the commissioner to the insurer that the insurer has failed to adhere to its RBC Plan or Revised RBC Plan, but only if such failure has a substantial adverse effect on the ability of the insurer to eliminate the Regulatory Action Level Event in accordance with its RBC Plan or Revised RBC Plan and the commissioner has so stated in the notification, provided the insurer has not challenged the determination under Section 739.7. (9) If the insurer challenges a determination by the commissioner under paragraph (8) pursuant to Section 739.7, the notification by the commissioner to the insurer that the commissioner has, after a hearing, rejected the challenge, unless the failure of the insurer to adhere to its RBC Plan or Revised RBC Plan has no substantial adverse effect on the ability of the insurer to eliminate the Regulatory Action Level Event with respect to the insurer. (b) In the event of a Regulatory Action Level Event the commissioner shall do all of the following: (1) Require the insurer to prepare and submit an RBC Plan or, if applicable, a Revised RBC Plan. (2) Perform such examination or analysis as the commissioner deems necessary of the assets, liabilities, and operations of the insurer, including a review of its RBC Plan or Revised RBC Plan. (3) Subsequent to the examination or analysis, issue a corrective order specifying such corrective actions as the commissioner shall determine are required. (c) In determining corrective actions, the commissioner may take into account such factors as are deemed relevant with respect to the insurer based upon the commissioner’s examination or analysis of the assets, liabilities, and operations of the insurer, including, but not limited to, the results of any sensitivity tests undertaken pursuant to the RBC Instructions. The RBC Plan or Revised RBC Plan shall be submitted as follows: (1) Within 45 days after the occurrence of the Regulatory Action Level Event. (2) If the insurer challenges an Adjusted RBC Report pursuant to Section 739.7 and the challenge is not in the judgment of the commissioner frivolous, within 45 days after the notification to the insurer that the commissioner has, after a hearing, rejected the insurer’s challenge. (3) If the insurer challenges a Revised RBC Plan under Section 739.7, within 45 days after notification to the insurer that the commissioner has, after a hearing, rejected the insurer’s challenge. (d) The commissioner may retain actuaries and investment experts and other consultants as may be necessary in the judgment of the commissioner to review the insurer’s RBC Plan or Revised RBC Plan, examine or analyze the assets, liabilities, and operations of the insurer and formulate the Corrective Order with respect to the insurer. The fees, costs, and expenses relating to consultants shall be borne by the affected insurer or such other party as directed by the commissioner. (Added by Stats. 1996, Ch. 708, Sec. 1. Effective January 1, 1997.)
  186. 739.5.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.1. Risk-Based Capital for Insurers [739 - 739.12] ( Article 4.1 added by Stats. 1996, Ch. 708, Sec. 1. )

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    This section defines when an “Authorized Control Level Event” occurs and describes the commissioner’s and Governor’s actions if it happens.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.1. Risk-Based Capital for Insurers [739 - 739.12] ( Article 4.1 added by Stats. 1996, Ch. 708, Sec. 1. ) ## 739.5. (a) “Authorized Control Level Event” means any of the following events: (1) The filing of an RBC Report by the insurer that indicates that the insurer’s Total Adjusted Capital is greater than or equal to its Mandatory Control Level RBC but less than its Authorized Control Level RBC. (2) The notification by the commissioner to the insurer of an Adjusted RBC Report that indicates the event in paragraph (1), provided the insurer does not challenge the Adjusted RBC Report under Section 739.7. (3) If the insurer challenges an Adjusted RBC Report that indicates the event in paragraph (1) under Section 739.7, notification by the commissioner to the insurer that the commissioner has, after a hearing, rejected the insurer’s challenge. (4) The failure of the insurer to respond, in a manner satisfactory to the commissioner, to a Corrective Order, provided the insurer has not challenged the Corrective Order under Section 739.7. (5) If the insurer has challenged a Corrective Order under Section 739.7 and the commissioner has, after a hearing, rejected the challenge or modified the Corrective Order, the failure of the insurer to respond, in a manner satisfactory to the commissioner, to the Corrective Order subsequent to rejection or modification by the commissioner. (b) In the event of an Authorized Control Level Event with respect to an insurer, the commissioner shall do the following: (1) Take such actions as are required under Section 739.4 regarding an insurer with respect to which a Regulatory Action Level Event has occurred. (2) If the commissioner deems it to be in the best interests of the policyholders and creditors of the insurer and of the public, take such actions as are necessary to cause the insurer to be placed under regulatory control under Article 14 (commencing with Section 1010), Article 14.3 (commencing with Section 1064.1), Article 14.5 (commencing with Section 1065.1), and Article 15.5 (commencing with Section 1077). In the event the commissioner takes those actions, the Authorized Control Level Event shall be deemed sufficient grounds for the commissioner to take that action, and the commissioner shall have the rights, powers, and duties with respect to the insurer as are set forth in those provisions. In the event the commissioner takes actions under this paragraph pursuant to an Adjusted RBC Report, the insurer shall be entitled to such protections as are afforded to insurers under the provisions pertaining to summary proceedings. (c) In the event of an Authorized Control Level Event with respect to the State Compensation Insurance Fund, the commissioner shall also issue a report to the Governor, the President pro Tempore of the Senate, and the Speaker of the Assembly setting forth the conditions that exist. (d) Upon a determination of the commissioner that an Authorized Control Level Event has occurred, the Governor, in consultation with the Legislature, may replace the President of the State Compensation Insurance Fund and appoint a recovery administrator. The recovery administrator shall be responsible for developing a plan of recovery for the State Compensation Insurance Fund, and for implementing the plan. The recovery administrator shall be a person who, through professional credentials or job experience, or both, has a demonstrated understanding of insurance law, insurer finances, experience in the rehabilitation of insurance companies, claims administration, and any other factors as are needed to create and execute a plan of recovery. The cost of the recovery administrator shall be borne by the State Compensation Insurance Fund. The administration shall remain until the commissioner conveys to the Governor his or her opinion that the fund has improved its finances to the extent that it is no longer at the Authorized Control Level or above, at which point the Governor may dismiss the recovery administrator and appoint a new President of the State Compensation Insurance Fund. During the time that the recovery administrator is acting, the board of the State Compensation Insurance Fund shall act in an advisory capacity to the recovery administrator and the Governor. (Amended by Stats. 2006, Ch. 740, Sec. 3.5. Effective January 1, 2007.)
  187. 739.6.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.1. Risk-Based Capital for Insurers [739 - 739.12] ( Article 4.1 added by Stats. 1996, Ch. 708, Sec. 1. )

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    If an insurer has a Mandatory Control Level Event, the commissioner must take regulatory-control actions, though action may be delayed up to 90 days if the event may be eliminated.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.1. Risk-Based Capital for Insurers [739 - 739.12] ( Article 4.1 added by Stats. 1996, Ch. 708, Sec. 1. ) ## 739.6. (a) “Mandatory Control Level Event” means any of the following events: (1) The filing of an RBC Report that indicates that the insurer’s Total Adjusted Capital is less than its Mandatory Control Level RBC. (2) Notification by the commissioner to the insurer of an Adjusted RBC Report that indicates the event in paragraph (1), provided the insurer does not challenge the Adjusted RBC Report under Section 739.7. (3) If the insurer challenges an Adjusted RBC Report that indicates the event in paragraph (1) under Section 739.7, notification by the commissioner to the insurer that the commissioner has, after a hearing, rejected the insurer’s challenge. (b) (1) With respect to a life or health insurer, in the event of a Mandatory Control Level Event, the commissioner shall take actions as are necessary to cause the insurer to be placed under regulatory control under Article 14 (commencing with Section 1010), Article 14.3 (commencing with Section 1064.1), Article 14.5 (commencing with Section 1065.1), and Article 15.5 (commencing with Section 1077). In that event, the Mandatory Control Level Event shall be deemed sufficient grounds for the commissioner to take action under those acts, and the commissioner shall have the rights, powers, and duties with respect to the insurer as are set forth therein. In the event the commissioner takes actions pursuant to an Adjusted RBC Report, the insurer shall be entitled to protections as are afforded to insurers under those provisions. Notwithstanding any of the foregoing, the commissioner may forego action for up to 90 days after the Mandatory Control Level Event if he or she finds there is a reasonable expectation that the Mandatory Control Level Event may be eliminated within the 90-day period. (2) With respect to a property and casualty insurer, the commissioner shall take those actions as are necessary to place the insurer under regulatory control, or, in the case of an insurer which is writing no business and that is running-off its existing business, may allow the insurer to continue its runoff under the supervision of the commissioner. In either event, the Mandatory Control Level Event shall be deemed sufficient grounds for the commissioner to take action and the commissioner shall have the rights, powers, and duties with respect to the insurer as are set forth in Article 14 (commencing with Section 1010). If the commissioner takes actions pursuant to an Adjusted RBC Report, the insurer shall be entitled to the protections of Article 14 (commencing with Section 1010) pertaining to summary proceedings. Notwithstanding any of the foregoing, the commissioner may forego action for up to 90 days after the Mandatory Control Level Event if the commissioner finds there is a reasonable expectation that the Mandatory Control Level Event may be eliminated within the 90-day period. (3) In the event of a Mandatory Control Level Event with respect to the State Compensation Insurance Fund, the commissioner shall also issue a report to the Governor, the President pro Tempore of the Senate, and the Speaker of the Assembly setting forth the conditions that exist. (Amended by Stats. 2006, Ch. 740, Sec. 3.6. Effective January 1, 2007.)
  188. 739.7.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.1. Risk-Based Capital for Insurers [739 - 739.12] ( Article 4.1 added by Stats. 1996, Ch. 708, Sec. 1. )

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    After certain commissioner notices, the insurer may request a departmental hearing and must notify the commissioner within 5 days; the commissioner must then set the hearing date between 10 and 30 days after the request.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.1. Risk-Based Capital for Insurers [739 - 739.12] ( Article 4.1 added by Stats. 1996, Ch. 708, Sec. 1. ) ## 739.7. Upon any of the events described in subdivision (a), (b), (c), or (d), the insurer shall have the right to a departmental hearing, on the record, at which the insurer may challenge any determination or action by the commissioner. The insurer shall notify the commissioner of its request for a hearing within five days after the notification by the commissioner under subdivision (a), (b), (c), or (d). Upon receipt of the insurer’s request for a hearing, the commissioner shall set a date for the hearing, which date shall be no less than 10 nor more than 30 days after the date of the insurer’s request. (a) Notification to an insurer by the commissioner of an Adjusted RBC Report. (b) Notification to an insurer by the commissioner that: (1) The insurer’s RBC Plan or Revised RBC Plan is unsatisfactory. (2) That notification constitutes a Regulatory Action Level Event with respect to the insurer. (c) Notification to any insurer by the commissioner that the insurer has failed to adhere to its RBC Plan or Revised RBC Plan and that such failure has a substantial adverse effect on the ability of the insurer to eliminate the Company Action Level Event with respect to the insurer in accordance with its RBC Plan or Revised RBC Plan. (d) Notification to an insurer by the commissioner of a Corrective Order with respect to the insurer. (Added by Stats. 1996, Ch. 708, Sec. 1. Effective January 1, 1997.)
  189. 739.8.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.1. Risk-Based Capital for Insurers [739 - 739.12] ( Article 4.1 added by Stats. 1996, Ch. 708, Sec. 1. )

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    The commissioner must keep certain RBC-related filings confidential, insurers and other insurance-business participants are prohibited from making misleading public statements about RBC Levels, and the commissioner may not use RBC materials for ratemaking or rate-proceeding evidence.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.1. Risk-Based Capital for Insurers [739 - 739.12] ( Article 4.1 added by Stats. 1996, Ch. 708, Sec. 1. ) ## 739.8. (a) All RBC Reports, to the extent the information within those reports is not required to be set forth in a publicly available annual statement schedule, and RBC Plans, including the results or report of any examination or analysis of an insurer performed pursuant to those plans, and any Corrective Order issued by the commissioner pursuant to examination or analysis, with respect to any domestic insurer or foreign insurer, that are filed with the commissioner constitute information that might be damaging to the insurer if made available to its competitors, and therefore shall be kept confidential by the commissioner. This information shall not be made public or be subject to subpoena, other than by the commissioner and then only for the purpose of enforcement actions taken by the commissioner pursuant to this chapter or any other provision of the insurance laws of this state. (b) It is the judgment of the Legislature that the comparison of an insurer’s Total Adjusted Capital to any of its RBC Levels is a regulatory tool that may indicate the need for possible corrective action with respect to the insurer, and is not intended as a means to rank insurers generally. Therefore, except as otherwise required under this article, the making, publishing, disseminating, circulating, or placing before the public, or causing, directly or indirectly, to be made, published, disseminated, circulated, or placed before the public, in a newspaper, magazine, or other publication, or in the form of a notice, circular, pamphlet, letter, or poster, or over any radio or television station, or in any other way, an advertisement, announcement, or statement containing an assertion, representation, or statement with regard to the RBC Levels of any insurer, or of any component derived in the calculation, by any insurer, agent, broker, or other person engaged in any manner in the insurance business would be misleading and is therefore prohibited; provided, however, that if any materially false statement with respect to the comparison regarding an insurer’s Total Adjusted Capital to its RBC Levels (or any of them) or an inappropriate comparison of any other amount to the insurers’ RBC Levels is published in any written publication and the insurer is able to demonstrate to the commissioner with substantial proof the falsity of such statement, or the inappropriateness, as the case may be, then the insurer may publish an announcement in a written publication if the sole purpose of the announcement is to rebut the materially false statement. (c) It is the further judgment of the Legislature that the RBC Instructions, RBC Reports, Adjusted RBC Reports, RBC Plans, and Revised RBC Plans are intended solely for use by the commissioner in monitoring the solvency of insurers and the need for possible corrective action with respect to insurers, and shall not be used by the commissioner for ratemaking nor considered or introduced as evidence in any rate proceeding, nor used by the commissioner to calculate or derive any elements of an appropriate premium level or rate of return for any line of insurance that an insurer or any affiliate is authorized to write. This subdivision does not affect the validity of any action taken before its effective date. (Added by Stats. 1996, Ch. 708, Sec. 1. Effective January 1, 1997.)
  190. 739.9.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.1. Risk-Based Capital for Insurers [739 - 739.12] ( Article 4.1 added by Stats. 1996, Ch. 708, Sec. 1. )

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    This article is supplemental to other state insurance laws. The commissioner may adopt reasonable rules to implement it and may exempt certain domestic property and casualty insurers that meet specific business and premium limits.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.1. Risk-Based Capital for Insurers [739 - 739.12] ( Article 4.1 added by Stats. 1996, Ch. 708, Sec. 1. ) ## 739.9. (a) The provisions of this article are supplemental to any other provisions of the laws of this state, and shall not preclude or limit any other powers or duties of the commissioner under such laws. (b) The commissioner may adopt reasonable rules necessary for the implementation of this article. (c) The commissioner may exempt from the application of this article any domestic property and casualty insurer that does all of the following: (1) Writes direct business only in this state. (2) Writes direct annual premiums of five million dollars ($5,000,000) or less. (3) Assumes no reinsurance in excess of 5 percent of direct premiums written. (Added by Stats. 1996, Ch. 708, Sec. 1. Effective January 1, 1997.)
  191. 740.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.5. Special Provisions Regarding Health Coverage [740 - 742.1] ( Article 4.5 added by Stats. 1982, Ch. 706, Sec. 1. )

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    Certain health coverage providers are presumed to fall under the department’s jurisdiction unless they prove they are regulated elsewhere.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.5. Special Provisions Regarding Health Coverage [740 - 742.1] ( Article 4.5 added by Stats. 1982, Ch. 706, Sec. 1. ) ## 740. (a) Notwithstanding any other provision of law, and except as provided herein, any person or other entity that provides coverage in this state for medical, surgical, chiropractic, physical therapy, speech pathology, audiology, professional mental health, dental, hospital, or optometric expenses, whether the coverage is by direct payment, reimbursement, or otherwise, shall be presumed to be subject to the jurisdiction of the department unless the person or other entity shows that while providing the services it is subject to the jurisdiction of another agency of this or another state or the federal government. (b) A person or entity may show that it is subject to the jurisdiction of another agency of this or another state or the federal government by providing to the commissioner the appropriate certificate or license issued by the other governmental agency that permits or qualifies it to provide those services for which it is licensed or certificated. (c) Any person or entity that is unable to show that it is subject to the jurisdiction of another agency of this or another state or the federal government, shall submit to an examination by the commissioner to determine the organization and solvency of the person or the entity, and to determine whether the person or entity is in compliance with the applicable provisions of this code, and shall be required to obtain a certificate of authority to do business in California and be required to meet all appropriate reserve, surplus, capital, and other necessary requirements imposed by this code for all insurers. (d) Any person or entity unable to show that it is subject to the jurisdiction of another agency of this or another state or the federal government shall be subject to all appropriate provisions of this code regarding the conduct of its business. (e) The department shall prepare and maintain for public inspection a list of those persons or entities described in subdivision (a) that are not subject to the jurisdiction of another agency of this or another state or the federal government and that the department knows to be operating in this state. There shall be no liability of any kind on the part of the state, the department, and its employees for the accuracy of the list or for any comments made with respect to it. (f) Any administrator licensed by the department who advertises or administers coverage in this state described in subdivision (a), that is provided by any person or entity described in subdivision (c), and where the coverage does not meet all pertinent requirements specified in this code and that is not provided or completely underwritten, insured or otherwise fully covered by an admitted life or disability insurer, hospital service plan or health care service plan, shall advise and disclose to any purchaser, prospective purchaser, covered person or entity, and any production agency licensed by the department involved in the transaction, all financial and operational information relative to the content and scope of the plan and, specifically, as to the lack of insurance or other coverage. Any production agency obtaining knowledge of any coverage relative to the content and scope of a hospital service plan or health care service plan, as required under this subdivision, shall advise and disclose to any purchaser, prospective purchaser, covered person or entity, the knowledge regarding the content and scope of the plan and, specifically, as to the lack of insurance by an admitted carrier or other qualified plan. (g) A health care service plan, as defined in Chapter 2.2 (commencing with Section 1340) of Division 2 of the Health and Safety Code, shall not be subject to this section. (h) The department shall notify, in writing, the Director of the Department of Managed Health Care whenever it determines that a multiple employer trust qualifies as a health care service plan subject to Chapter 2.2 (commencing with Section 1340) of Division 2 of the Health and Safety Code. (i) Any health care service plan, including a self-insured reimbursement plan that pays for or reimburses any part of the cost of health care services, operated by any city, county, city and county, public entity, or political subdivision, or a public joint labor management trust as described in subdivision (c) of Section 1349.2 of the Health and Safety Code, that is exempt pursuant to Section 1349.2 of the Health and Safety Code from the Knox-Keene Health Care Service Plan Act of 1975 (Chapter 2.2 (commencing with Section 1340) of Division 2 of the Health and Safety Code), is also exempt from this code. (Amended by Stats. 2000, Ch. 857, Sec. 53. Effective January 1, 2001.)
  192. 742.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.5. Special Provisions Regarding Health Coverage [740 - 742.1] ( Article 4.5 added by Stats. 1982, Ch. 706, Sec. 1. )

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    Some health coverage providers that enter PPO-related arrangements are subject to the Department of Insurance’s jurisdiction; entities regulated under the referenced Health and Safety Code chapter are excluded.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.5. Special Provisions Regarding Health Coverage [740 - 742.1] ( Article 4.5 added by Stats. 1982, Ch. 706, Sec. 1. ) ## 742. (a) Any person or other entity that provides coverage in this state for medical, surgical, chiropractic, physical therapy, speech pathology, audiology, professional mental health, dental, hospital, or optometric services, whether this coverage is by direct payment, reimbursement, or otherwise, and that enters into an arrangement or contract with, or underwrites, a preferred provider organization or arrangement subject to Section 10133 is subject to the jurisdiction of the Department of Insurance. (b) Any person or entity subject to regulation under Chapter 2.2 (commencing with Section 1340) of Division 2 of the Health and Safety Code shall not be subject to this section. (Amended by Stats. 2007, Ch. 100, Sec. 1. Effective January 1, 2008.)
  193. 742.1.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.5. Special Provisions Regarding Health Coverage [740 - 742.1] ( Article 4.5 added by Stats. 1982, Ch. 706, Sec. 1. )

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    Certain multi-employer health coverage arrangements are subject to the department’s jurisdiction, but entities already regulated under a referenced Health and Safety Code chapter are excluded from this section.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.5. Special Provisions Regarding Health Coverage [740 - 742.1] ( Article 4.5 added by Stats. 1982, Ch. 706, Sec. 1. ) ## 742.1. (a) Any person or other entity or arrangement in this state that is organized for the purpose of offering or providing coverage in this state, for the benefit of employees of two or more employers, for medical, surgical, chiropractic, physical therapy, speech pathology, audiology, professional mental health, dental, hospital, or optometric services, whether that coverage is by direct payment, reimbursement, or otherwise, is subject to the jurisdiction of the department. (b) Any person or entity subject to regulation under Chapter 2.2 (commencing with Section 1340) of Division 2 of the Health and Safety Code shall not be subject to the provisions of this section. (Added by Stats. 1984, Ch. 640, Sec. 1. Effective August 16, 1984.)
  194. 742.20.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.7. Multiple Employer Welfare Arrangements [742.20 - 742.43] ( Article 4.7 added by Stats. 1994, Ch. 1082, Sec. 1. )

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    The section says self-funded or partially self-funded MEWAs must get a certificate of compliance from the Department of Insurance.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.7. Multiple Employer Welfare Arrangements [742.20 - 742.43] ( Article 4.7 added by Stats. 1994, Ch. 1082, Sec. 1. ) ## 742.20. The Legislature finds and declares the following: (a) An alternative to insurance programs, health care maintenance organizations, and panel provider organizations was established by Congress in 1974 through the Employee Retirement Income Security Act (ERISA). Among the various employee benefit programs established and governed by ERISA are multiple employer welfare arrangements (MEWA), which are subject as well to state regulatory and fiscal standards not inconsistent with ERISA. MEWAs permit employer members of trade associations to create trust funds for the purpose of offering and providing health care benefits to their employees. MEWAs can be created as fully insured or self-funded or partially self-funded benefit programs. (b) The Legislature recognizes that some MEWAs provide an alternative mechanism to traditional health insurance for small employers. It is the intent of the Legislature to ensure the financial integrity of those MEWA programs that are already in existence by requiring self-funded or partially self-funded MEWAs to obtain a certificate of compliance from the Department of Insurance. In order for the Department of Insurance to grant a certificate of compliance, the MEWA must adhere to standards set forth in this act which are not inconsistent with the provisions of ERISA. Further, it is the intent of the Legislature to provide the Department of Insurance with the authority to levy monetary penalties and to revoke certificates of compliance from MEWAs that violate the provisions of this act. (c) The Legislature has passed significant reforms in the area of small group health insurance. This article, in no manner, circumvents these reforms nor is it intended to be a precedent to do so. Therefore, the small group reform legislation applies to MEWAs to the extent it is not inconsistent with ERISA. (d) The provisions of this article are consistent with and authorized by ERISA, which confers upon the states limited authority to regulate MEWAs. (Added by Stats. 1994, Ch. 1082, Sec. 1. Effective January 1, 1995.)
  195. 742.21.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.7. Multiple Employer Welfare Arrangements [742.20 - 742.43] ( Article 4.7 added by Stats. 1994, Ch. 1082, Sec. 1. )

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    A multiple employer welfare arrangement must meet the criteria for an employee welfare benefit plan to qualify for a certificate of compliance.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.7. Multiple Employer Welfare Arrangements [742.20 - 742.43] ( Article 4.7 added by Stats. 1994, Ch. 1082, Sec. 1. ) ## 742.21. “Multiple employer welfare arrangement” as used in this article has the same meaning as that contained in Section 1002(40)(A) of Title 29 of the United States Code. “Employee welfare benefit plan,” as used in this article, has the same meaning as that contained in Section 1002(1) of Title 29 of the United States Code. A multiple employer welfare arrangement shall comply with the criteria set forth for an employee welfare benefit plan in order to qualify to obtain a certificate of compliance. (Added by Stats. 1994, Ch. 1082, Sec. 1. Effective January 1, 1995.)
  196. 742.215.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.7. Multiple Employer Welfare Arrangements [742.20 - 742.43] ( Article 4.7 added by Stats. 1994, Ch. 1082, Sec. 1. )

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    This section defines “self-funded” and “partially self-funded” multiple employer welfare arrangements.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.7. Multiple Employer Welfare Arrangements [742.20 - 742.43] ( Article 4.7 added by Stats. 1994, Ch. 1082, Sec. 1. ) ## 742.215. As used in this article, “self-funded” means a multiple employer welfare arrangement that undertook at all times and for a continuous period of five years to reimburse health benefit costs incurred by covered persons pursuant to the benefits and coverages provided by their plan exclusively from plan assets. “Partially self-funded” means a multiple employer welfare arrangement that undertook at all times and for a continuous period of five years to reimburse health benefit costs incurred by covered persons pursuant to the benefits and coverages provided by their plan exclusively from plan assets, provided, however, that these benefits are reimbursable to the multiple employer welfare arrangement by stop loss insurance only to the extent that the benefits exceed fifty thousand dollars ($50,000) per claim. (Added by Stats. 1994, Ch. 1082, Sec. 1. Effective January 1, 1995.)
  197. 742.22.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.7. Multiple Employer Welfare Arrangements [742.20 - 742.43] ( Article 4.7 added by Stats. 1994, Ch. 1082, Sec. 1. )

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    The Legislature says this article is meant to let certain multiple employer welfare arrangements qualify for a certificate of compliance, and those that obtain and keep it are not treated as unauthorized insurers.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.7. Multiple Employer Welfare Arrangements [742.20 - 742.43] ( Article 4.7 added by Stats. 1994, Ch. 1082, Sec. 1. ) ## 742.22. It is the intent of the Legislature in enacting this article to allow a self-funded or partially self-funded multiple employer welfare arrangement to meet the requirements for a certificate of compliance to do business in California. If the self-funded or partially self-funded multiple employer welfare arrangement obtains and maintains a certificate of compliance under these sections, it shall not be considered an unauthorized insurer. (Added by Stats. 1994, Ch. 1082, Sec. 1. Effective January 1, 1995.)
  198. 742.23.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.7. Multiple Employer Welfare Arrangements [742.20 - 742.43] ( Article 4.7 added by Stats. 1994, Ch. 1082, Sec. 1. )

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    A self-funded or partially self-funded multiple employer welfare arrangement may not provide benefits to a resident of this state after December 31, 1995 unless it first gets a certificate of compliance.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.7. Multiple Employer Welfare Arrangements [742.20 - 742.43] ( Article 4.7 added by Stats. 1994, Ch. 1082, Sec. 1. ) ## 742.23. (a) After December 31, 1995, a self-funded or partially self-funded multiple employer welfare arrangement shall not provide any benefits for any resident of this state without first obtaining a certificate of compliance pursuant to this article, provided, however, that if the commissioner has not issued or denied an application for a certificate of compliance within 180 calendar days of the date of the filing of the completed application, the commissioner shall not take any action against the applicant solely on the basis that the department has not granted the certificate of compliance. (b) The department may take regulatory action against a MEWA pursuant to all applicable provisions of this code during the period beginning on the effective date of this act and ending on the date on which the MEWA is certified under this article, at which time the provisions of this article shall apply. (Added by Stats. 1994, Ch. 1082, Sec. 1. Effective January 1, 1995.)
  199. 742.24.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.7. Multiple Employer Welfare Arrangements [742.20 - 742.43] ( Article 4.7 added by Stats. 1994, Ch. 1082, Sec. 1. )

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    A qualifying multiple employer welfare arrangement must meet listed organizational, financial, filing, and benefit-distribution requirements to get a certificate of compliance.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.7. Multiple Employer Welfare Arrangements [742.20 - 742.43] ( Article 4.7 added by Stats. 1994, Ch. 1082, Sec. 1. ) ## 742.24. To be eligible for a certificate of compliance, a self-funded or partially self-funded multiple employer welfare arrangement shall meet all of the following requirements: (a) Be nonprofit. (b) Be established and maintained by a trade association, industry association, professional association, or by any other business group or association of any kind that has a constitution or bylaws specifically stating its purpose, and have been organized and maintained in good faith with at least 200 paid members and operated actively for a continuous period of five years, for purposes other than that of obtaining or providing health care coverage benefits to its members. An association is a California mutual benefit corporation comprised of a group of individuals or employers who associate based solely on participation in a specified profession or industry, accepting for membership any individual or employer meeting its membership criteria, which do not condition membership directly or indirectly on the health or claims history of any person, and which uses membership dues solely for and in consideration of the membership and membership benefits. (c) Be organized and maintained in good faith with at least 2,000 employees and 50 paid employer members and operated actively for a continuous period of five years. (d) Have been operating in compliance with ERISA on a self-funded or partially self-funded basis for a continuous period of five years pursuant to a trust agreement by a board of trustees that shall have complete fiscal control over the multiple employer welfare arrangement, and that shall be responsible for all operations of the multiple employer welfare arrangement. The trustees shall be selected by vote of the participating employers and shall be owners, partners, officers, directors, or employees of one or more employers participating in the multiple employer welfare arrangement. A trustee may not be an owner, officer, or employee of the insurer, administrator, or service company providing insurance or insurance-related services to the association. The trustees shall have authority to approve applications of association members for participation in the multiple employer welfare arrangement and to contract with an authorized administrator or service company to administer the day-to-day affairs of the multiple employer welfare arrangement. (e) Benefits shall be offered only to association members. (f) Benefits may be offered only through life agents, as defined in Section 1622, licensed in the state whose names, addresses, and telephone numbers have been filed with the commissioner as licensed life agents for the multiple employer welfare arrangement. (g) Be operated in accordance with sound actuarial principles and conform to the requirements of Section 742.31. (h) File an application with the department for a certificate of compliance no later than November 30, 1995. (i) The multiple employer welfare arrangement shall at all times maintain aggregate stop loss insurance providing the arrangement with coverage with an attachment point which is not greater than 125 percent of annual expected claims. The commissioner may, by regulation, define “expected claims” for purposes of this subdivision and provide for adjustments in the amount of the percentage in specified circumstances in which the arrangement specifically provides for and maintains reserves in accordance with sound actuarial principles as provided in Section 742.31. (j) The multiple employer welfare arrangement shall establish and maintain specific stop loss insurance providing the arrangement with coverage with an attachment point that is not greater than 5 percent of annual expected claims. The commissioner may, by regulation, define “expected claims” for purposes of this subdivision and provide for adjustments in the amount of that percentage as may be necessary to carry out the purposes of this subdivision determined by sound actuarial principles as provided in Section 742.31. (k) The multiple employer welfare arrangement shall establish and maintain appropriate loss and loss adjustment reserves determined by sound actuarial principles as provided in Section 742.31. (l) The association has within its own organization adequate facilities and competent personnel to serve the multiple employer welfare arrangement, or has contracted with a licensed third-party administrator to provide those services. (m) The association has established a procedure for handling claims for benefits in the event of the dissolution of the multiple employer welfare arrangement. (n) On and after January 1, 2003, in addition to the requirements of this article, maintain a surplus of not less than one million dollars ($1,000,000), and that this amount be increased as follows: one million seven hundred fifty thousand dollars ($1,750,000) by January 1, 2004; two million five hundred thousand dollars ($2,500,000) by January 1, 2005; three million two hundred fifty thousand dollars ($3,250,000) by January 1, 2006; and four million dollars ($4,000,000) by January 1, 2007. (o) Submit all proposed rate levels to the department for informational purposes no later than 45 days prior to their implementation. The proposed rates shall contain an aggregate benefit structure which has a loss ratio experience of not less than 80 percent. The loss ratio experience shall be calculated as claims paid during the contract period plus a reasonable estimate of claims liability for the contract period at the end of the current year divided by contributions paid or collected for the contract period minus unearned contributions at the end of the current year. (p) Comply with the investment requirements of Section 724.245. (Amended by Stats. 2005, Ch. 218, Sec. 1. Effective January 1, 2006.)
  200. 742.245.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.7. Multiple Employer Welfare Arrangements [742.20 - 742.43] ( Article 4.7 added by Stats. 1994, Ch. 1082, Sec. 1. )

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    A self-funded or partially self-funded multiple employer welfare arrangement must keep at least 25% of required surplus in specified investments, and the commissioner may order disposal of certain investments.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.7. Multiple Employer Welfare Arrangements [742.20 - 742.43] ( Article 4.7 added by Stats. 1994, Ch. 1082, Sec. 1. ) ## 742.245. (a) A self-funded or partially self-funded multiple employer welfare arrangement shall maintain at least 25 percent of the surplus required by subdivision (n) of Section 742.24 in investments specified in Article 3 (commencing with Section 1170) of Chapter 2 of Part 2 of Division 1 and in Section 1192.5. (b) The balance of the assets of a self-funded or partially self-funded multiple employer welfare arrangement may be invested in the following: (1) An open-ended diversified management company, as defined in the federal Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.), that meets all of the following requirements: (A) It is registered with, and reports to, the Securities and Exchange Commission. (B) It is domiciled in the United States. (C) Substantially all of its investments consist of investment grade debt instruments and cash. (D) All of its assets are held in the United States by a bank, trust company, or other custodian chartered by the United States, its states, or territories. (2) An amount not to exceed 75 percent of any excess of invested assets over the sum of the reserves and related actuarial items held in support of policies and contracts, plus the surplus required by subdivision (n) of Section 742.24, may be invested in the following: (A) An open-ended diversified management company, as defined in the federal Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.), that meets all of the following requirements: (i) It is registered with, and reports to, the Securities and Exchange Commission. (ii) It is domiciled in the United States. (iii) Its investments consist of common and preferred stocks and cash. (iv) All of its assets are held in the United States by a bank, trust company, or other custodian chartered by the United States, its states, or territories. (B) Corporate notes, bonds, and preferred stocks that meet all of the following requirements: (i) The issuer is domiciled in the United States or Canada. (ii) The investments are rated investment grade or better by at least two of the following rating agencies, or their successors: (I) Standard & Poor’s. (II) Moody’s. (III) Fitch. (iii) The investments are exchange-traded. “Exchange-traded” as used in this clause means listed and traded on the National Market System of the NASDAQ Stock Market or on a securities exchange subject to regulation, supervision, or control under a statute of the United States and acceptable to the commissioner. (C) An investment in a single issuer made pursuant to subparagraph (B) shall not exceed in the aggregate 10 percent of the multiple employer welfare arrangement’s funds described in this paragraph. (3) An investment made pursuant to paragraph (1) or subparagraph (A) of paragraph (2) shall be made in, at minimum, three of the companies described in those provisions. (4) An office building or buildings that will be used for the multiple employer welfare arrangement’s principal operations and business if both of the following requirements are met: (A) The multiple employer welfare arrangement obtains prior written approval from the commissioner. (B) The office building or buildings are treated on the financial statements filed with the commissioner pursuant to Section 742.31 as nonadmitted assets. (c) The commissioner may, in his or her discretion and after a hearing, require by written order disposal of an investment made either in violation of, or no longer in compliance with, this section. The commissioner may also, after a hearing, require the disposal of any investment made pursuant to paragraph (2) of subdivision (b) if the multiple employer welfare arrangement has failed to maintain cash or liquid assets sufficient to meet its claims and any other contractual obligations. The commissioner may also for good cause and after a hearing, by written order require the disposal of an investment described in subdivision (b). (Amended by Stats. 2008, Ch. 428, Sec. 1. Effective January 1, 2009.)

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