Insurance Code — Part 22 | INS — United States — California law | Esheria

Insurance Code

Part 22 of 23 · provisions 4,201–4,400

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

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About this statute

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

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Provisions of Insurance Code

Showing 200 of 4,461

  1. 799.09.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 6.9. The Equal Insurance HIV Act [799 - 799.11] ( Article 6.9 added by Stats. 2020, Ch. 184, Sec. 3. )

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    A life or disability income insurer must not require an applicant to take an HIV test when the test results would be used to decide eligibility for certain hospital, medical, surgical, nonprofit hospital service plan, or health care service plan coverage.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 6.9. The Equal Insurance HIV Act [799 - 799.11] ( Article 6.9 added by Stats. 2020, Ch. 184, Sec. 3. ) ## 799.09. A life or disability income insurer shall not require an applicant to take an HIV test if the results of the test would be used exclusively or nonexclusively for the purpose of determining eligibility for hospital, medical, or surgical insurance coverage or eligibility for coverage under a nonprofit hospital service plan or health care service plan. (Added by Stats. 2020, Ch. 184, Sec. 3. (SB 1255) Effective January 1, 2021.)
  2. 799.10.

    ## 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 6.9. The Equal Insurance HIV Act [799 - 799.11] ( Article 6.9 added by Stats. 2020, Ch. 184, Sec. 3. )

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    This section limits disclosure of HIV test results tied to life or disability income insurance and sets penalties for improper disclosure.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 6.9. The Equal Insurance HIV Act [799 - 799.11] ( Article 6.9 added by Stats. 2020, Ch. 184, Sec. 3. ) ## 799.10. (a) This section applies to the disclosure of the results of HIV tests requested by a life or disability income insurer pursuant to this article and, notwithstanding Section 120980 of the Health and Safety Code, Section 120980 of the Health and Safety Code does not apply to the disclosure of the results of HIV tests conducted pursuant to this article. (b) A person who negligently discloses results of an HIV test to a third party, in a manner that identifies or provides identifying characteristics of the person to whom the test results apply, except pursuant to a written authorization, as described in subdivision (g), or except as provided in this article or in Section 1603.1, 1603.3, or 121022 of the Health and Safety Code, or in any other law that expressly provides an exemption to this section, shall be assessed a civil penalty in an amount not to exceed two thousand five hundred dollars ($2,500) plus court costs, as determined by the court, which penalty and costs shall be paid to the subject of the test. (c) A person who willfully or maliciously discloses the results of an HIV test to a third party, in a manner that identifies or provides identifying characteristics of the person to whom the test results apply, except pursuant to a written authorization, as described in subdivision (g), or except as provided in this article or in Section 1603.1, 1603.3, or 121022 of the Health and Safety Code, or in any other law that expressly provides an exemption to this section, shall be assessed a civil penalty in an amount not less than five thousand dollars ($5,000) and not more than ten thousand dollars ($10,000) plus court costs, as determined by the court, which penalty and costs shall be paid to the subject of the test. (d) A person who willfully, maliciously, or negligently discloses the results of an HIV test to a third party, in a manner that identifies or provides identifying characteristics of the person to whom the test results apply, except pursuant to a written authorization, as described in subdivision (g), or except as provided in this article or in Section 1603.1, 1603.3, or 121022 of the Health and Safety Code, or in any other law that expressly provides an exemption to this section, that results in economic, bodily, or psychological harm to the subject of the test, is guilty of a misdemeanor punishable by imprisonment in a county jail for a period not to exceed 364 calendar days, or by a fine not to exceed twenty-five thousand dollars ($25,000), or by both that fine and imprisonment. (e) A person who commits any act described in subdivision (b) or (c) shall be liable to the subject for all actual damages, including damages for economic, bodily, or psychological harm that is proximately caused by the act. (f) Each disclosure made in violation of this section is a separate and actionable offense. (g) “Written authorization,” as used in this section, applies only to the disclosure of test results by a person responsible for the care and treatment of the person subject to the test. Written authorization is required for each separate disclosure of the test results, and shall include to whom the disclosure would be made. (Amended (as added by Stats. 2020, Ch. 184, Sec. 3) by Stats. 2021, Ch. 134, Sec. 4. (SB 283) Effective January 1, 2022.)
  3. 799.11.

    ## 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 6.9. The Equal Insurance HIV Act [799 - 799.11] ( Article 6.9 added by Stats. 2020, Ch. 184, Sec. 3. )

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    This article becomes operative on January 1, 2023.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 6.9. The Equal Insurance HIV Act [799 - 799.11] ( Article 6.9 added by Stats. 2020, Ch. 184, Sec. 3. ) ## 799.11. This article shall become operative on January 1, 2023. (Added by Stats. 2020, Ch. 184, Sec. 3. (SB 1255) Effective January 1, 2021.)
  4. 8.

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

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    “Writing” includes recorded messages readable by ordinary visual means. Notices, reports, statements, and records required or authorized by the code must be in writing and in English unless another form is expressly allowed.

    ## Insurance Code - INS ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1935, Ch. 145. ) ## 8. Writing includes any form of recorded message capable of comprehension by ordinary visual means. Whenever any notice, report, statement or record is required or authorized by this code, it shall be made in writing in the English language unless it is otherwise expressly provided. (Enacted by Stats. 1935, Ch. 145.)
  5. 800.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 7. Restrictions on Underwriting [800 - 805] ( Article 7 enacted by Stats. 1935, Ch. 145. )

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    This article does not apply to several listed insurance matters and transactions.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 7. Restrictions on Underwriting [800 - 805] ( Article 7 enacted by Stats. 1935, Ch. 145. ) ## 800. This article shall not apply to: (a) Insurers made exempt therefrom by other provisions of this code. (b) Insurance upon the interests of common carriers engaged in interstate trade, or upon property in their custody. (c) Insurance contracts executed without this state, but which during the term thereof temporarily cover subject matter within this state. (d) Bid bonds issued by any admitted insurer in connection with any public or private contract. (Amended by Stats. 1972, Ch. 590.)
  6. 801.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 7. Restrictions on Underwriting [800 - 805] ( Article 7 enacted by Stats. 1935, Ch. 145. )

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    Amendments made under this article’s 1969 session changes must not repeal, rescind, or alter the interpretation of specified earlier 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 7. Restrictions on Underwriting [800 - 805] ( Article 7 enacted by Stats. 1935, Ch. 145. ) ## 801. The amendments made in any sections contained in this article by the Statutes of the 1969 Regular Session of the Legislature shall not repeal, rescind or affect the interpretation of Article 1.5 (commencing with Section 685) of Chapter 1 of Part 2 of Division 1 of, or Section 1750.5 of this code. (Repealed and added by Stats. 1969, Ch. 506.)
  7. 8010.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 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 2. Powers and Duties [8010 - 8011] ( Article 2 enacted by Stats. 1935, Ch. 145. )

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    A reinsurer may carry on a fire reinsurance business after organizing under its articles of incorporation, as this chapter allows.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 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 2. Powers and Duties [8010 - 8011] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 8010. Upon organizing under its articles of incorporation, such reinsurer may carry on a fire reinsurance business as provided by this chapter. (Enacted by Stats. 1935, Ch. 145.)
  8. 8011.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 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 2. Powers and Duties [8010 - 8011] ( Article 2 enacted by Stats. 1935, Ch. 145. )

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    The reinsurer and its directors have the usual corporate powers and duties needed to manage the reinsurer’s affairs, including power to set officers’ duties and compensation.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 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 2. Powers and Duties [8010 - 8011] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 8011. Such reinsurer and its directors shall possess such of the usual powers, and be subject to such of the usual duties of corporations and directors thereof as are necessary for the management of its affairs in accordance with the provisions of this chapter, including the power to prescribe the duties of its officers and fix their compensation. (Enacted by Stats. 1935, Ch. 145.)
  9. 802.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 7. Restrictions on Underwriting [800 - 805] ( Article 7 enacted by Stats. 1935, Ch. 145. )

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    An admitted insurer may use temporary binders to make insurance contracts at offices outside this state for property or risks located in this state, if the related policies are later issued.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 7. Restrictions on Underwriting [800 - 805] ( Article 7 enacted by Stats. 1935, Ch. 145. ) ## 802. Any admitted insurer may, by means of temporary binders, execute contracts of insurance at offices outside this state upon subject matter located in this state if policies therefor are thereafter issued by it. (Added by renumbering Section 805 by Stats. 1969, Ch. 506.)
  10. 803.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 7. Restrictions on Underwriting [800 - 805] ( Article 7 enacted by Stats. 1935, Ch. 145. )

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    An admitted insurer must not assume or reinsure a nonadmitted insurer’s liabilities on California subject matter to evade specified insurance rules. The commissioner must issue a bulletin on reporting these transactions, and violations can trigger a fine of up to $5,000 per agreement plus other corrective orders.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 7. Restrictions on Underwriting [800 - 805] ( Article 7 enacted by Stats. 1935, Ch. 145. ) ## 803. (a) No admitted insurer shall assume or reinsure the liabilities of a nonadmitted insurer upon subject matter located in this state for the purpose of circumventing the rate and form provisions of this code, or the nonadmitted insurer provisions in Chapter 6 (commencing with Section 1760) of Part 2, and their implementing regulations. Notwithstanding Section 804, if, after notice and hearing, the commissioner determines that a reinsurance agreement was entered into in violation of this section, then the insurer shall be subject to a fine not to exceed five thousand dollars ($5,000), for each such reinsurance agreement, and the commissioner may enter any other corrective order he or she deems necessary. (b) The commissioner shall issue a bulletin to govern the reporting to the department by admitted insurers of their reinsurance transactions with nonadmitted insurers. The bulletin shall specify the types of reinsurance subject to reporting, the amounts which shall be reported, and the manner in which that information shall be reported. The bulletin shall require reporting of sufficient information to enable the department to evaluate compliance with subdivision (a). (Repealed and added by Stats. 1995, Ch. 580, Sec. 3. Effective January 1, 1996.)
  11. 8030.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 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 3. Additional Memberships [8030 - 8031] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    A county mutual fire insurer in this State may become a member of a reinsurer and, if it does, is entitled to the related rights and privileges.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 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 3. Additional Memberships [8030 - 8031] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 8030. Any county mutual fire insurer in this State may become a member of such a reinsurer and entitled to all the rights and privileges appertaining thereto. (Enacted by Stats. 1935, Ch. 145.)
  12. 8031.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 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 3. Additional Memberships [8030 - 8031] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    County mutual fire insurers that join the reinsurer must give a written promise to pay their share of expenses and losses, and must also pay required percentages and other charges when the reinsurance is arranged.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 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 3. Additional Memberships [8030 - 8031] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 8031. County mutual fire insurers, upon becoming members of such reinsurer, shall give it their written obligation binding themselves and their successors to pay their pro rata share of the necessary expenses and loss sustained by any member of the reinsurer during the time for which their respective policies are written. They shall also at the time of effecting the reinsurance pay such percentages and such other charges as are required by law or by the rules and by-laws of the reinsurer. (Amended by Stats. 1939, Ch. 932.)
  13. 804.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 7. Restrictions on Underwriting [800 - 805] ( Article 7 enacted by Stats. 1935, Ch. 145. )

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    An insurer that willfully violates any provision of this article commits a misdemeanor and may be fined up to $1,000 per violation; the commissioner may also suspend the insurer’s certificate of authority for the rest of its term.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 7. Restrictions on Underwriting [800 - 805] ( Article 7 enacted by Stats. 1935, Ch. 145. ) ## 804. Any insurer willfully violating any provision of this article is guilty of a misdemeanor and is punishable by a fine not exceeding one thousand dollars ($1,000) for each violation thereof, or the commissioner may suspend the certificate of authority of such insurer for the remainder of the term thereof. (Amended by Stats. 1983, Ch. 1092, Sec. 180. Effective September 27, 1983. Operative January 1, 1984, by Sec. 427 of Ch. 1092.)
  14. 805.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 7. Restrictions on Underwriting [800 - 805] ( Article 7 enacted by Stats. 1935, Ch. 145. )

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    If a licensee is suspended by the Secretary of State, the license becomes inactive, and the inactive licensee may not carry on activities that require a commissioner-issued license until the suspension ends.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 7. Restrictions on Underwriting [800 - 805] ( Article 7 enacted by Stats. 1935, Ch. 145. ) ## 805. The license of any licensee that is suspended by the Secretary of State shall become inactive. The inactive licensee shall not conduct any activity for which a license, issued by the commissioner, is required until the licensee is no longer suspended by the Secretary of State. (Added by Stats. 2023, Ch. 204, Sec. 1. (AB 1140) Effective January 1, 2024.)
  15. 8050.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 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 4. Risks [8050 - 8053] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    County mutual fire reinsurers must follow the chapter 5 risk restrictions when writing reinsurance.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 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 4. Risks [8050 - 8053] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 8050. Restrictions on risks as to “distances,” “city or town block,” “closely built up district,” “one risk,” and “clear space,” in chapter 5 of this part are binding upon such reinsurers and shall govern the writing of all reinsurance. (Enacted by Stats. 1935, Ch. 145.)
  16. 8051.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 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 4. Risks [8050 - 8053] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    County mutual fire reinsurers must classify the reinsured subject matter when issuing policies and use rates that correspond as closely as practicable to the different kinds of subject matter.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. County Mutual Fire Reinsurers [7080 - 9060] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Risks [8050 - 8053] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 8051. All such reinsurers shall classify the reinsured subject matter at the time of issuing policies thereon, under rates corresponding as nearly as practicable to the several kinds of subject matter. (Enacted by Stats. 1935, Ch. 145.)
  17. 8052.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 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 4. Risks [8050 - 8053] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    A reinsurer may write reinsurance for property located in this State if the property is insured by a member 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 6. County Mutual Fire Reinsurers [7080 - 9060] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Risks [8050 - 8053] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 8052. Such reinsurer may write reinsurance on property which is located in this State and which is insured in any member insurer. (Enacted by Stats. 1935, Ch. 145.)
  18. 8053.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 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 4. Risks [8050 - 8053] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    A reinsurer must not write reinsurance for a single risk above 5% of the total reinsurance it has on its books when accepting the risk.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 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 4. Risks [8050 - 8053] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 8053. Such reinsurer shall not at any time write reinsurance, subject to one risk, in excess of five per cent of the total amount of reinsurance on its books at the time of accepting the risk. (Enacted by Stats. 1935, Ch. 145.)
  19. 8070.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 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 5. Loss [8070 - 8078] ( Article 5 enacted by Stats. 1935, Ch. 145. )

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    A member of the reinsurer must immediately notify the president or secretary after a reinsurance-covered loss and state the amount of the loss.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. County Mutual Fire Reinsurers [7080 - 9060] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Loss [8070 - 8078] ( Article 5 enacted by Stats. 1935, Ch. 145. ) ## 8070. A member of such reinsurer, upon sustaining loss covered by reinsurance, shall immediately notify the president or secretary, stating the amount of loss. (Enacted by Stats. 1935, Ch. 145.)
  20. 8071.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 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 5. Loss [8070 - 8078] ( Article 5 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    The president and secretary must determine the amount of the loss and make the adjustment.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 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 5. Loss [8070 - 8078] ( Article 5 enacted by Stats. 1935, Ch. 145. ) ## 8071. The president and secretary shall proceed to ascertain the amount of such loss and make adjustment. (Amended by Stats. 1945, Ch. 98.)
  21. 8072.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 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 5. Loss [8070 - 8078] ( Article 5 enacted by Stats. 1935, Ch. 145. )

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    The secretary must promptly notify each member of the executive committee when a claim is over $5,000, and must give the directors a statement of all claims at each regular 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 6. County Mutual Fire Reinsurers [7080 - 9060] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Loss [8070 - 8078] ( Article 5 enacted by Stats. 1935, Ch. 145. ) ## 8072. If the claim is for more than five thousand dollars ($5,000), the secretary shall forthwith notify each member of the executive committee. At each regular meeting of the directors the secretary shall furnish them with a statement showing all claims filed since the previous regular meeting of the directors. (Amended by Stats. 1945, Ch. 98.)
  22. 8073.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 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 5. Loss [8070 - 8078] ( Article 5 enacted by Stats. 1935, Ch. 145. )

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    If the parties cannot agree on the amount of a loss, they may submit that issue to arbitration. If they do, the reinsurer’s president appoints one disinterested arbitrator and the member appoints another.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 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 5. Loss [8070 - 8078] ( Article 5 enacted by Stats. 1935, Ch. 145. ) ## 8073. If in any case there is a failure of the parties to agree upon the amount of such loss they may submit the question of the amount to arbitration. In that event the president of the reinsurer shall appoint one disinterested person to act as an arbitrator, and the member shall appoint another. (Enacted by Stats. 1935, Ch. 145.)
  23. 8074.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 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 5. Loss [8070 - 8078] ( Article 5 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    If the two appointed arbitrators cannot agree on the amount of the loss, they must select a third disinterested person to join them.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. County Mutual Fire Reinsurers [7080 - 9060] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Loss [8070 - 8078] ( Article 5 enacted by Stats. 1935, Ch. 145. ) ## 8074. If the two arbitrators thus appointed fail to agree upon the amount of such loss, they shall select a third disinterested person to act with them. (Enacted by Stats. 1935, Ch. 145.)
  24. 8075.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 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 5. Loss [8070 - 8078] ( Article 5 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    Arbitrators appointed under this section may examine witnesses and do whatever is necessary to determine the amount of the claimant’s loss.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. County Mutual Fire Reinsurers [7080 - 9060] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Loss [8070 - 8078] ( Article 5 enacted by Stats. 1935, Ch. 145. ) ## 8075. Such arbitrators so appointed may examine witnesses and do all other things necessary to the proper determination of the amount of loss sustained by the claimant. (Enacted by Stats. 1935, Ch. 145.)
  25. 8076.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 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 5. Loss [8070 - 8078] ( Article 5 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    Arbitrators must give their award in writing to the reinsurer’s president and to the member, and the award is final on the amount of loss sustained.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 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 5. Loss [8070 - 8078] ( Article 5 enacted by Stats. 1935, Ch. 145. ) ## 8076. The arbitrators shall make their award in writing to the president of the reinsurer and to the member. Such award shall be final as to the amount of the loss sustained. (Enacted by Stats. 1935, Ch. 145.)
  26. 8077.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 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 5. Loss [8070 - 8078] ( Article 5 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    Each arbitrator must be paid $5 per day plus 5 cents per mile traveled, and the claimant generally pays this compensation unless the arbitrators award more than the reinsurer offered; in that case the reinsurer pays.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 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 5. Loss [8070 - 8078] ( Article 5 enacted by Stats. 1935, Ch. 145. ) ## 8077. The pay of each arbitrator shall be five dollars per day for each day’s services rendered, and five cents for each mile necessarily traveled in the discharge of his duties. Such compensation shall be paid by the claimant unless the award of the arbitrators exceeds the sum offered by the reinsurer in liquidation of the loss. In the latter case such expense shall be paid by the reinsurer. (Enacted by Stats. 1935, Ch. 145.)
  27. 8078.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 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 5. Loss [8070 - 8078] ( Article 5 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    The reinsurer’s president and secretary may hire an adjuster to handle any loss, but the executive committee must confirm it.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. County Mutual Fire Reinsurers [7080 - 9060] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Loss [8070 - 8078] ( Article 5 enacted by Stats. 1935, Ch. 145. ) ## 8078. The president and secretary of the reinsurer may secure the services of an adjuster to represent it on any loss, subject to confirmation by its executive committee. (Enacted by Stats. 1935, Ch. 145.)
  28. 8090.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 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 6. Assessments and Coverage of Loss [8090 - 8097] ( Article 6 enacted by Stats. 1935, Ch. 145. )

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    If an ascertained loss is larger than the reinsurer’s cash funds and also above one-eighth of 1% of insurance in force, the president must convene the directors, and the directors must assess each member.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 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 6. Assessments and Coverage of Loss [8090 - 8097] ( Article 6 enacted by Stats. 1935, Ch. 145. ) ## 8090. When the amount of any ascertained loss exceeds the cash funds of the reinsurer and also exceeds one-eighth of one per cent of the total amount of the insurance in force in the reinsurer, the president shall convene its directors. On so convening, the directors shall assess each member in proportion to the member’s reinsurance, taken in connection with the rate of premium under which such reinsurance is classified. (Enacted by Stats. 1935, Ch. 145.)
  29. 8091.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 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 6. Assessments and Coverage of Loss [8090 - 8097] ( Article 6 enacted by Stats. 1935, Ch. 145. )

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    If the loss is small enough, the directors may borrow money for the reinsurer and issue indebtedness, but only by a written resolution signed by two-thirds of the directors present.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 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 6. Assessments and Coverage of Loss [8090 - 8097] ( Article 6 enacted by Stats. 1935, Ch. 145. ) ## 8091. 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 reinsurer, the directors may, by resolution in writing signed by two-thirds of all the directors while present at a meeting, borrow in the name of the reinsurer and give its evidence of indebtedness therefor, in an amount not exceeding one-eighth of one per cent of the total amount of such insurance in force. (Enacted by Stats. 1935, Ch. 145.)
  30. 8092.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 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 6. Assessments and Coverage of Loss [8090 - 8097] ( Article 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    A loan covered by this section cannot run for more than 12 months, and its maturity date cannot be more than 30 days after the reinsurer’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 6. County Mutual Fire Reinsurers [7080 - 9060] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Assessments and Coverage of Loss [8090 - 8097] ( Article 6 enacted by Stats. 1935, Ch. 145. ) ## 8092. The term of such loan shall not be longer than twelve months, and the date of maturity shall not be more than thirty days beyond the date of the next annual meeting of the reinsurer. (Enacted by Stats. 1935, Ch. 145.)
  31. 8093.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 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 6. Assessments and Coverage of Loss [8090 - 8097] ( Article 6 enacted by Stats. 1935, Ch. 145. )

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    The board of directors may levy an annual assessment, capped at 25 cents per $100 of reinsurance, to create a reserve fund for emergency cases only.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 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 6. Assessments and Coverage of Loss [8090 - 8097] ( Article 6 enacted by Stats. 1935, Ch. 145. ) ## 8093. The board of directors may at their annual meeting levy an assessment not exceeding twenty-five cents on the $100 of reinsurance. The sum so raised shall constitute a reserve fund to be used in emergency cases only. Another assessment for this purpose shall not be made while this reserve fund remains intact. (Enacted by Stats. 1935, Ch. 145.)
  32. 8094.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 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 6. Assessments and Coverage of Loss [8090 - 8097] ( Article 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    When an assessment is made, the secretary must immediately notify every member by registered letter and include the amount of the loss, each member’s share, who gets paid, and the payment date.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 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 6. Assessments and Coverage of Loss [8090 - 8097] ( Article 6 enacted by Stats. 1935, Ch. 145. ) ## 8094. Whenever an assessment is made, the secretary shall immediately notify every member by registered letter addressed to the secretary of the member at its usual post-office address, stating: (a) The amount of such loss. (b) The sum due from the member as its share. (c) To whom payment is to be made. (d) The time, not less than thirty nor more than ninety days from the date of mailing notice, when payment is to be made. (Enacted by Stats. 1935, Ch. 145.)
  33. 8095.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 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 6. Assessments and Coverage of Loss [8090 - 8097] ( Article 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    An action may be brought against a member of the reinsurer if the member neglects or refuses to pay liabilities due to 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 6. Assessments and Coverage of Loss [8090 - 8097] ( Article 6 enacted by Stats. 1935, Ch. 145. ) ## 8095. An action may be brought against any member of such reinsurer that neglects or refuses to pay the liabilities due such reinsurer. (Enacted by Stats. 1935, Ch. 145.)
  34. 8096.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 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 6. Assessments and Coverage of Loss [8090 - 8097] ( Article 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    If directors of a county mutual fire reinsurer wilfully refuse or neglect their legal or by-law duties, they can be held personally liable to the reinsurer for the loss.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. County Mutual Fire Reinsurers [7080 - 9060] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Assessments and Coverage of Loss [8090 - 8097] ( Article 6 enacted by Stats. 1935, Ch. 145. ) ## 8096. The directors of any such reinsurer who wilfully refuse or neglect to perform the duties imposed upon them by law or by the by-laws of the reinsurer are liable in their individual capacity to the reinsurer sustaining loss. (Enacted by Stats. 1935, Ch. 145.)
  35. 8097.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 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 6. Assessments and Coverage of Loss [8090 - 8097] ( Article 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    Members of a county mutual fire reinsurer may bring and maintain an action against the reinsurer to recover amounts owed for losses when payment is withheld and 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 6. County Mutual Fire Reinsurers [7080 - 9060] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Assessments and Coverage of Loss [8090 - 8097] ( Article 6 enacted by Stats. 1935, Ch. 145. ) ## 8097. An action may also be brought and maintained against any such reinsurer by members thereof to recover sums owing them for losses sustained when 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.)
  36. 810.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 7.3. Servicing of Insurance Contracts [810- 810.] ( Article 7.3 added by Stats. 1967, Ch. 1115. )

    Verify source ↗

    An admitted insurer may not make certain arrangements with a nonadmitted insurer, or stop servicing covered insurance business, without the commissioner’s written consent.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 7.3. Servicing of Insurance Contracts [810- 810.] ( Article 7.3 added by Stats. 1967, Ch. 1115. ) ## 810. An admitted insurer, without first obtaining the written consent of the commissioner, shall not enter into any agreement or arrangement with any nonadmitted insurer by way of sale, reinsurance, merger, consolidation, assumption, or in any other manner which results in the admitted insurer ceasing to service in this state any group insurance contract or 10 or more individual insurance contracts entered into in this state or issued for delivery in this state insuring the life or person of any resident of this state or any property in this state. Service as used in this section includes but is not limited to: (a) Adjustment and payment of losses. (b) Appropriate amendment of insurance contracts as called for therein to keep the coverage consistent with current conditions. (c) Collection of premiums. (d) Issuance of policies, certificates and other documents, in fulfillment of prior agreements. (e) Returning unearned premiums. (f) Payment of cash values. No admitted insurer shall in whole or in part or in any manner so cease to so service such insurance business without such written consent from the commissioner unless it has by valid contract arranged for an admitted insurer to perform such servicing. This section shall not affect or modify any of the provisions of this code relating to statement credit allowed for reinsurance. Violation of this section constitutes a failure to comply with the laws of this state regarding the governmental control of insurers within the meaning of Section 701. (Added by Stats. 1967, Ch. 1115.)
  37. 815.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 7.5. Restrictions on Compensation of Adjusters [815 - 816] ( Article 7.5 added by Stats. 1949, Ch. 1445. )

    Verify source ↗

    An insurer must not pay contingent compensation to a representative who has discretion over settling or adjusting life or disability claims.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 7.5. Restrictions on Compensation of Adjusters [815 - 816] ( Article 7.5 added by Stats. 1949, Ch. 1445. ) ## 815. No insurer shall pay any representative given discretion as to the settlement or adjustment of claims under life or disability policies, whether in direct negotiation with the claimant or in supervision of the person negotiating, a compensation which in any way is contingent upon the amount of settlement of such claims. (Added by Stats. 1949, Ch. 1445.)
  38. 816.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 7.5. Restrictions on Compensation of Adjusters [815 - 816] ( Article 7.5 added by Stats. 1949, Ch. 1445. )

    Verify source ↗

    An insurer generally may not pay contingent compensation to a person who has discretion over claims settlement, except where the section expressly 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 7.5. Restrictions on Compensation of Adjusters [815 - 816] ( Article 7.5 added by Stats. 1949, Ch. 1445. ) ## 816. No insurer shall pay any person given discretion as to settlement of claims under any policy of insurance, or surety bond, whether in direct negotiation with the claimant or in supervision of the person negotiating, a compensation which in any way is contingent upon the amount of settlement of such claims, except as in this section otherwise expressly provided. This section shall apply equally to a single claim, a number of specified claims, an aggregate of claims during a specified period of time or an aggregate of claims under any contract, agreement or arrangement. This section shall not affect the interpretation or provisions of Section 815. The word “person” as used in this section includes, but is not limited to: employees, agents, brokers, representatives, general agents, managing general agents, surplus line brokers, insureds, coinsureds, adjusters and independent contractors but does not include attorneys in fact or other exclusive managers of an insurer. This section does not apply to: (a) Compensation of a producer, managing general agent, surplus line broker or general agent under any arrangement, agreement or contract whereby the producer or general agent is not granted discretion in the actual adjustment or settlement of any or all individual claims settled for an amount exceeding five hundred dollars ($500). (b) A producer, managing general agent, surplus line broker or general agent who is compensated by a contingent commission arrangement based wholly or partly on underwriting results, unless the arrangement guarantees an agreed return to the insurer which may exceed the underwriting profit actually earned by the insurer on business written through the producer, managing general agent, surplus line broker or general agent. (c) Contracts of reinsurance between insurers. (d) An arrangement, schedule of charges, agreement or contract, express or implied, for the adjustment of claims under which the compensation for the services of the person making the adjustment (exclusive of reimbursement for actual expenses) consistently increases, in reasonable brackets, as the amount paid in settlement of a claim increases. An insurer which in any other jurisdiction is making payments which would be in violation of this section if made in respect to insurance business done in this state shall not be admitted to this state until it presents evidence satisfactory to the commissioner that it will not make such payments in this state and that it will within one year after admission to this state cease to make any such payments in any other jurisdiction and, within the same period, terminate any contract or arrangement under which such payments are to be paid. Failure to so cease such payments and to so terminate such contracts and arrangements within such period of one year shall constitute grounds for revocation of the insurer’s certificate of authority. (Amended by Stats. 1972, Ch. 200.)
  39. 820.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    Terms used in this article must be interpreted using the meanings stated here, and those meanings do not control other code provisions just because they appear in 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 820. The terms used in this article shall be given the meanings herein set forth, but such meanings shall not, merely by reason of enactment in this article, govern the interpretation of any other provision of this code. (Enacted by Stats. 1935, Ch. 145.)
  40. 821.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    “Security” includes instruments commonly known as securities, but excludes certain commercial paper, promissory notes, mortgage participation certificates, and insurance policies.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 821. “Security” means every instrument commonly known by that term, except: (a) Commercial paper when issued, given or acquired in a bona fide way in the ordinary course of legitimate business, trade or commerce. (b) Promissory notes, whether secured or unsecured, if not offered to the public, and if not sold to an underwriter of the sale for the purpose of resale. (c) Mortgage participation certificates issued under and in accordance with the provisions of Chapter 2, Part 6, Division 2. (d) Policies of insurance issued by an insurer. (Enacted by Stats. 1935, Ch. 145.)
  41. 821.5.

    ## 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    This section says certain listed instruments are securities under section 821.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 821.5. Without in any manner affecting the scope of the term “security” as set forth in section 821, and with the exceptions therein set forth, the following instruments are particularly specified as securities within the meaning of that section: every stock, bond, note, treasury stock, debenture, evidence of indebtedness, certificate evidencing a contribution, certificate of interest or participation, certificate of interest in a profit sharing agreement, collateral trust certificate, any transferable share, investment contract, or beneficial interest in title to property, contracts or earnings. (Added by Stats. 1937, Ch. 725.)
  42. 822.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    This section defines “sale” or “sell” for securities to include many forms of disposing of, attempting to dispose of, or arranging a disposition for value, plus several related transactions and offers.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 822. Except as otherwise provided by this article, “sale” or “sell” means every disposition, or attempt or arrangement to dispose, of a security or interest in a security for value, whether done by direct or indirect means. A security is conclusively presumed to be sold for value if given with any purchase of any nature or if given as a bonus on account of a purchase. “Sale” or “sell” shall also mean a contract of sale, an exchange, any change in the rights, preferences, privileges, or restrictions on outstanding securities, an attempt to sell, an option of sale, a solicitation of a sale, a subscription or an offer to sell directly or by a stock agent, or a circular letter, advertisement or otherwise. (Amended by Stats. 2025, Ch. 558, Sec. 1. (AB 487) Effective January 1, 2026.)
  43. 823.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    A conversion privilege or subscription right tied to a security is not treated as a sale of the other security, though a later sale after the right is exercised is subject to 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 823. (a) A privilege pertaining to a security giving the holder the privilege to convert such security into another security of the same insurer is not a sale of such other security. (b) A right pertaining to a security and entitling the holder of such right to subscribe to another security of the same insurer is not a sale of such other security, but the sale of such other security upon the exercise of such right shall be subject to the provisions of this article. (Amended by Stats. 1949, Ch. 256.)
  44. 824.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    This section defines “broker” for insurance law and says broker authority cannot be implied from appointing a stock agent.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 824. “Broker” means every person, other than a stock agent, who in this state engages either wholly or in part in the business of (a) dealing in any security issued by others, (b) underwriting any issue of such securities, (c) purchasing such securities with the purpose of reselling them, or (d) offering such securities for sale to the public. Authority to act as a broker shall not be implied from an appointment executed by an insurer appointing a stock agent of that insurer. (Amended by Stats. 2025, Ch. 558, Sec. 2. (AB 487) Effective January 1, 2026.)
  45. 825.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    “Stock agent” is defined as a person employed or appointed by an insurer or broker who, in this state and for compensation, sells a security.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 825. “Stock agent” means every person employed or appointed by an insurer or broker who, within this state and for a compensation, sells any security. (Amended by Stats. 2025, Ch. 558, Sec. 3. (AB 487) Effective January 1, 2026.)
  46. 826.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    This section defines “insurer” for this article and says certain permits issued by the commissioner remain valid for the stated period.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 826. “Insurer” for the purposes of this article includes every organization organized for the purpose of assuming the risk of loss under contracts of insurance or reinsurance, and also includes any of the following organizations: (a) An admitted insurer, (b) A nonadmitted domestic insurer, (c) A nonadmitted foreign insurer, (d) A nonadmitted alien insurer, (e) An underwritten title company, or an organization organized for the purpose of doing an underwritten title business, whether licensed or not, and (f) An attorney in fact of a reciprocal or interinsurance exchange, whether it be admitted or not, or an organization organized for the purpose of acting as the attorney in fact of a reciprocal, or interinsurance exchange, whether the same be admitted or not. “Insurer” shall not include, unless specified in subdivisions (a) through (f), inclusive, an organization, which though required to obtain a certificate or license from the commissioner, is organized or to be organized primarily for purposes other than assuming the risk of loss under contracts or agreements of insurance. The amendments of this section by the Legislature at the 1965 Regular Session, except as they relate to underwritten title companies, attorneys in fact, and exclusive managers, shall be construed as a restatement and continuation of the law existing prior to such amendment. Every permit issued by the commissioner or the Commissioner of Corporations to an insurer as defined in this section prior to its amendment by the Legislature at 1965 Regular Session shall be valid and effective for all purposes stated therein, from the date of its issuance until the date of expiration stated therein. Every permit issued by the commissioner under the authority of former subdivision (g) of this section from the date such subdivision became effective in 1965 until the effective date of the amendment to this section at the 1970 Regular Session of the Legislature shall be valid and effective for all purposes stated therein, from the date of its issuance until the expiration date specified therein. (Amended by Stats. 1970, Ch. 301.)
  47. 827.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

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    An insurer may not sell or solicit sale of its own securities in this state unless it has first applied for and obtained a permit from 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 827. An insurer shall not sell in this state, except upon a sale for delinquent assessment made in accordance with the provisions of Section 423 of the Corporations Code, or offer for sale, negotiate for the sale of, or take subscriptions for any security of its own issue until it shall have first applied for and secured from the commissioner a permit authorizing it so to do. (Amended by Stats. 1978, Ch. 349.)
  48. 827.3.

    ## 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

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    Certain insurer stock transactions are exempt from Section 827 if they meet all listed conditions, including no advertising, no selling expenses, no consideration, and written notice to the commissioner within 30 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 827.3. (a) As used in this section, the term “insurer” means an insurer which is domestic and admitted. (b) The transactions of an insurer set out in subdivisions (c) and (d) are exempt from Section 827 if they meet all of the following requirements: (1) They are not accompanied by an advertisement and no selling expenses have been given, paid, or incurred in connection therewith. (2) No consideration has been given, paid, or incurred in connection with them. (3) Within 30 days after the transaction, the insurer notifies the commissioner in writing of its occurrence. The notice shall describe the transaction, including the transaction date, the number and par value of shares issued, and the purpose of the transaction. The notice shall be executed under penalty of perjury. (c) Par value increases resulting from a transfer of gross paid-in surplus to capital. (d) Shares issued or distributed by an insurer as dividends to existing holders of shares of the insurer, on a pro rata basis according to the shares previously held by each holder, provided the new shares are of the same class and par value and have the same rights, preferences, privileges, and restrictions as the outstanding shares. (e) Any transfer of surplus to paid-up capital pursuant to subsection (d) shall not be deemed consideration for purposes of this section. (f) Notwithstanding this section, the applicable notice provisions, contained in subdivision (e) of Section 1215.4, shall apply to those transactions set forth in subdivision (d). (Amended by Stats. 1996, Ch. 820, Sec. 1. Effective January 1, 1997.)
  49. 827.5.

    ## 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    This section excludes domestic insurers from the term “insurer” here and exempts certain insurer securities transactions from the article’s rules.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 827.5. The term “insurer” as used in this section shall not include domestic insurers as defined in Section 26. The following transactions of an insurer described in subdivisions (a), (c), (d), and (f) of Section 826 shall be exempt from the provisions of this article: (a) Any negotiations or agreements prior to general solicitation for the approval of the shareholders of said insurer and subject to such approval, of a change in the rights, preferences, privileges or restrictions of or on outstanding securities or a merger, consolidation or sale of corporate assets in consideration of the issuance of securities. (b) Any change in the rights, preferences, privileges, or restrictions of or on outstanding securities of such insurer, unless the holders of at least 25 percent of the outstanding shares or units of any class of securities which will be directly or indirectly affected substantially and adversely by such change have addresses in this state according to the records of such insurer; or (c) Any exchange incident to a merger, a consolidation, an acquisition of outstanding stock, or a sale of corporate assets in consideration of the issuance of securities of another insurer or corporation, unless at least 25 percent of the outstanding shares of any class, the holders of which are to receive securities in the exchange of the surviving, consolidated, or purchasing corporation or insurer, are held by persons who have addresses in this state according to the records of such corporation or insurer of which they are shareholders. (d) For the purposes of subdivision (b) and subdivision (c) of this section, (1) any securities held to the knowledge of the issuer in the names of a broker as defined in Section 824 or nominees of such broker and (2) any securities controlled by any one person who is not a resident of the State of California who controls directly or indirectly 50 percent or more of the outstanding securities of that class, shall not be considered outstanding. The determination of whether 25 percent of the outstanding securities are held by persons having addresses in this state, for the purposes of subdivision (b) and subdivision (c) of this section, shall be made as of the record date for the determination of the security holders entitled to vote on or consent to the action, if approval of such holders is required, or if not as of the date of directors’ approval of such action. (e) Any change (other than a stock split or reverse stock split) in the rights, preferences, privileges, or restrictions of or on outstanding shares, except the following if they materially and adversely affect any class of shareholders: (1) to add, change, or delete assessment provisions; (2) to change the rights to dividends thereon; (3) to change the redemption provisions; (4) to make them redeemable; (5) to change the amount payable on liquidation; (6) to change, add, or delete conversion rights; (7) to change, add, or delete voting rights; (8) to change preemptive rights; (9) to change, add, or delete sinking fund provisions; (10) to rearrange the relative priorities of outstanding shares; (11) to impose, change, or delete restrictions upon the transfer of shares in the articles of incorporation or bylaws; (12) to change the right of shareholders with respect to the calling of special meetings of shareholders; or (13) to change, add, or delete any rights, preferences, privileges, or restrictions of, or on, the outstanding shares or memberships of a mutual water company or other corporation organized primarily to provide services or facilities to its shareholders or members. (f) Any stock split or reverse stock split, except the following: (1) any stock split or reverse stock split if the corporation has more than one class of shares outstanding and the split would have a material effect on the proportionate interests of the respective classes as to voting, dividends or distributions; (2) any stock split of a stock which is traded in the market and its market price as of the date of directors’ approval of the stock split adjusted to give effect to the split was less than two dollars ($2) per share; or (3) any reverse stock split if the corporation has the option of paying cash for any fractional shares created by such reverse split and as a result of such action the proportionate interests of the shareholders would be substantially altered. Any shares issued upon a stock split or reverse stock split exempted by this subdivision shall be subject to any conditions previously imposed by the commissioner applicable to the shares with respect to which they are issued. (g) Any change in the rights of outstanding debt securities, except the following if they substantially and adversely affect any class of securities: (1) to change the rights to interest thereon; (2) to change their redemption provisions; (3) to make them redeemable; (4) to extend the maturity thereof or to change the amount payable thereon at maturity; (5) to change their voting rights; (6) to change their conversion rights; (7) to change sinking fund provisions; or (8) to make them subordinate to other indebtedness. (Added by Stats. 1977, Ch. 1020.)
  50. 827.6.

    ## 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

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    Certain offers or sales of voting common stock by a California-incorporated insurer are exempt from this article if specific ownership, notice, pricing, and consideration conditions are met.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 827.6. Any offer or sale of voting common stock by an insurer incorporated in this state shall be exempt from the provisions of this article if, immediately after the proposed sale and issuance, there will be only one class of stock of such insurer outstanding which is owned beneficially by no more than one domestic insurer, providing all of the following requirements have been met: (1) All such stock shall be evidenced by certificates which have been stamped or printed prominently on their face a legend in a form to be prescribed by rule of the commissioner restricting the transfer of such stock in such manner as the rule provides. (2) The offer and sale of such stock is not accompanied by the publication of any advertisement, and no selling expenses have been given, paid, or incurred in connection therewith. (3) The consideration to be received by the issuer for the stock to be issued shall consist of only cash or cancellation of indebtedness for money borrowed or both upon the initial organization of the issuer, provided all such stock is issued for the same price per share. (4) No promotional consideration has been given, paid, or incurred in connection with such issuance. Promotional consideration means any consideration paid directly or indirectly to a person who, acting alone or in conjunction with one or more other persons, takes the initiative in founding and organizing the business or enterprise of the issuer, for services rendered in connection with such founding or organizing. (Added by Stats. 1980, Ch. 262, Sec. 2.)
  51. 827.7.

    ## 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

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    The commissioner may issue subscription and preorganization permits for insurers or proposed insurers when this article requires 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 827.7. Where required by this article the commissioner is authorized to issue subscription and preorganization permits of and pertaining to insurers or proposed insurers. Applications for such permits shall set forth such of the matters described in Sections 834, 835, 836 and 837 as the commissioner deems appropriate or requires. (Added by Stats. 1965, Ch. 1569.)
  52. 827.8.

    ## 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    A foreign or alien insurer’s stock sale to certain broker-agents is exempt from this article if the section’s conditions are met.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 827.8. An offer or sale of voting common stock or preferred stock of and by a foreign or alien insurer to property broker-agents or casualty broker-agents, as defined in Section 33.5, shall be exempt from the requirements of this article if all of the following requirements are met: (a) The sale shall not be made to more than 35 property broker-agents and casualty broker-agents in the State of California. (b) Each property broker-agent and each casualty broker-agent to whom an offer is made is an “accredited investor” as defined in Regulation D under the Federal Securities Act of 1933, as amended. (c) Each property broker-agent and each casualty broker-agent to whom an offer is made meets all of the following requirements: (1) The broker-agent shall have been appointed by the admitted insurer for a period of at least one year and that admitted insurer shall meet all of the following requirements: (A) Be authorized to transact property and casualty insurance. For purposes of this section, property and casualty insurance means insurance falling within classes 2, 3, 7, 8, 10, 11, 12, 14, 15, 16, 18, and 20 under Section 100 except home protection contracts, as defined in Section 12740. (B) Have at least four hundred million dollars ($400,000,000) of statutory capital and surplus. (C) Hold a certificate of authority in good standing with this state and have no regulatory action relating to financial hazard or fraud against the company in the last three years from states, including this state, where the insurer is authorized as an admitted insurer to do business. (D) Is currently reinsuring or has definite plans to reinsure business produced by that broker-agent with the same foreign or alien insurer offering securities to the broker-agent. (2) The broker-agent generates five million dollars ($5,000,000) in premiums per year and plans on transferring or writing at least one million dollars ($1,000,000) per year with the admitted insurer. (3) The broker-agent shall pay at least fifty thousand dollars ($50,000) for the securities purchased in the transaction but not in excess of five hundred thousand dollars ($500,000). (4) The broker-agent shall have a net worth of at least five million dollars ($5,000,000). (d) The offer and sale of stock is accompanied by the prospectus, private placement memorandum, together with any other information required pursuant to Regulation D of the Federal Securities Act of 1933. (e) The consideration received by the issuer for the stock to be issued consists solely of cash. (f) No promotional consideration or selling expenses have been given, paid, or incurred in connection with the issuance of stock, and the offer and sale of stock is not accompanied by the publication of any advertisement. (g) All stock issued shall be evidenced by a certificate that shall have a notice printed prominently on its face restricting the transfer of the stock solely to the issuer or investors who have been shareholders of the issuer for at least three years and who are approved by at least 51 percent of the members of the board of directors of the issuer. (h) The issuer of both the common and preferred stock shall be all of the following: (1) A foreign or alien insurer that does not transact insurance directly in California, but is solely a reinsurer. (2) A reinsurer that only reinsures commercial lines property and casualty insurance, as specified in subparagraph (A) of paragraph (1) of subdivision (c). (Amended by Stats. 2011, Ch. 411, Sec. 7. (AB 1416) Effective January 1, 2012.)
  53. 828.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    A person may not advertise or circulate material about an insurer’s security until the insurer gets the commissioner’s permit, unless the person is a broker with a qualifying 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 828. Except in the case of a broker holding a broker’s certificate issued by the commissioner under this code or by the Commissioner of Financial Protection and Innovation under the Corporate Securities Law of 1968 (Division 1 (commencing with Section 25000) of Title 4 of the Corporations Code) and then in effect, a person, desiring or proposing to sell a security to be issued by any insurer, shall not issue, circulate, or publish any advertisement, pamphlet, prospectus, or circular concerning that security until the insurer secures from the commissioner a permit authorizing it to sell the security. (Amended by Stats. 2022, Ch. 452, Sec. 194. (SB 1498) Effective January 1, 2023.)
  54. 829.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    A person must not issue, circulate, or publish an advertisement or writing about a security sold by him unless the person’s name is subscribed and a true copy is filed with the commissioner at least one day before, or the commissioner first authorizes or 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 829. A person shall not issue, circulate, or publish any advertisement or writing concerning any security sold by him, unless either his name is subscribed thereto, and a true copy thereof is filed in the office of the commissioner at least one day prior to the issue, publication, or circulation, or the commissioner first authorizes or consents to the issuance, circulation or publication. (Enacted by Stats. 1935, Ch. 145.)
  55. 830.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    After the commissioner gives written notice, a person must not issue, circulate, or publish the advertisement or writing if it is, in the commissioner’s opinion, false, misleading, or likely to deceive a reader.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 830. A person shall not issue, circulate, or publish any such advertisement or writing after receipt of notice in writing from the commissioner that, in his opinion, the same contains any statement that is false or misleading or otherwise likely to deceive a reader thereof. (Enacted by Stats. 1935, Ch. 145.)
  56. 831.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    An insurer may not issue a security unless the commissioner’s permit authorizing it is in effect, and securities issued under a permit must match any permit-required provisions or they are void.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 831. Every security issued by any insurer without a permit of the commissioner authorizing the same in effect at the time of the issue, shall be void. Every security issued by any insurer under a permit of the commissioner shall be void unless its provisions conform to the provisions, if any, required by the permit. (Enacted by Stats. 1935, Ch. 145.)
  57. 831.1.

    ## 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    Securities of a home protection company issued or authorized before December 31, 1978 are valid if they were qualified or exempt when issued or authorized, even if no commissioner permit was obtained.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 831.1. Every security of a home protection company issued or authorized to be issued prior to December 31, 1978, shall be valid even though it has been issued without a permit of the commissioner authorizing the same if, at the time of the issue or authorization, the security was qualified or exempt from qualification under the Corporate Securities Law of 1968 (Title 4, Division 1 of the Corporations Code). Any sale, transfer, hypothecation, or other distribution of a security whose issuance is validated by this section, whether such transaction takes place before or after the effective date of this section is not prohibited by the provisions of this article. (Added by Stats. 1978, Ch. 1203.)
  58. 832.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    An insurer may not sell or issue securities contrary to the article or the commissioner’s permit, and may not use sale proceeds for unauthorized or excess purposes.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 832. Every insurer that commits any of the following acts is guilty of a public offense and punishable by fine not exceeding ten thousand dollars: (a) Selling or causing to be issued a security contrary to the provisions of this article or not in conformity with the permit of the commissioner. (b) Applying any of the proceeds of sale of a security to any purpose other than as specified in the permit, or to a purpose specified in the permit, but in excess of the amount limited for that purpose. (Enacted by Stats. 1935, Ch. 145.)
  59. 833.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    This section makes it a public offense to knowingly or willfully violate the article’s securities rules, file false statements, misuse security-sale proceeds, or disobey the commissioner’s permit or 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 833. Every person who commits any of the acts specified in this section is guilty of a public offense and punishable by a fine not exceeding ten thousand dollars ($10,000), or by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code, or in a county jail not exceeding one year, or by both that fine and imprisonment. (a) Knowingly authorizing, directing, aiding, causing, or assisting in causing the issuance, execution, or sale of, any security, in nonconformity with a permit of the commissioner then in effect and authorizing such issuance, or contrary to the provisions of this article. (b) Knowingly making any false statement or representation in any application to the commissioner, or in any proceeding before him, or in any examination, audit, or investigation made by him, or by his authority. (c) With knowledge of the falsity, causing to be filed in the office of the commissioner any false statement or representation concerning an insurer, the property which the insurer then holds or proposes to acquire, the insurer’s officers, the insurer’s financial condition or other affairs, or the insurer’s proposed plan of business. (d) With knowledge of the falsity of any such statement or representation, causing any security to be issued, executed, or sold without first informing the commissioner of the falsity of such statement in writing. (e) Directly or indirectly, knowingly causing or assisting in causing any part of the proceeds from the sale of any security to be applied to any purpose contrary to the provisions of the permit authorizing the issuance of such security, or to any purpose in excess of the amount specified in such permit for such purpose. (f) Selling a security with knowledge that it has been issued or executed in violation of any of the provisions of this article. (g) Causing a writing concerning a security to be issued, circulated, or published while having knowledge that such matter contains any statement that is false, misleading, or otherwise likely to deceive a reader thereof. (h) In any respect, willfully violating or failing to comply with any of the provisions of this article. (i) In any other respect, willfully violating or neglecting to comply with any part of an order or permit of the commissioner under the provisions of this article. (j) Conspiring with one or more other persons to violate any permit or order issued by the commissioner, or any of the provisions of this article. (Amended by Stats. 2011, Ch. 15, Sec. 207. (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.)
  60. 834.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    An applicant for a permit to issue or sell securities must verify and file the application with the commissioner and include specified company, financial, business-plan, and security-related information.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 834. The application for a permit to issue or sell securities shall be verified as provided in the Code of Civil Procedure for the verification of pleadings, and shall be filed on 81/2 x 11 inch size paper in the office of the commissioner. In the application the applicant shall set forth: (a) The names and addresses of its officers. (b) The location of its office. (c) An itemized account of its financial condition, including the amount and character of its assets and liabilities. (d) A detailed statement of the plan upon which it proposes to transact business. (e) A copy of any security it proposes to issue. (f) A copy of any contract it proposes to make concerning the same. (g) A copy of any prospectus or advertisement, or other description of such securities, then prepared by it for distribution or publication. (h) Such additional information concerning the company, its condition and affairs as the commissioner requires. (Amended by Stats. 1995, Ch. 721, Sec. 1.5. Effective January 1, 1996.)
  61. 835.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    If the applicant is a partnership, unincorporated association, or joint stock company, it must file a copy of its organizational papers with its application.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 835. If the applicant is a partnership, unincorporated association, or joint stock company, it shall file with its application a copy of its articles of partnership or association, and all other papers pertaining to its organization. (Enacted by Stats. 1935, Ch. 145.)
  62. 836.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    A corporate applicant must file certain corporate records and governing documents with its application.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 836. If the applicant is a corporation, it shall file with its application a copy of all minutes of any proceedings of its directors, stockholders, or members, relating to or affecting the issue of such securities, and also a copy of its articles of incorporation, by-laws, and any amendments to either thereof. (Enacted by Stats. 1935, Ch. 145.)
  63. 837.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    A foreign corporation or association must file a recent certificate and a written instrument with its application.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 837. If the applicant is a foreign corporation or association, it shall also file with its application: (a) A certificate of the proper officer of the jurisdiction in which it is organized, executed not more than 30 days before the filing of such application, showing that the applicant is authorized to transact business in that jurisdiction. (b) In such form as the commissioner prescribes, its written instrument, irrevocably appointing the commissioner and his successor in office its true and lawful attorney upon whom all process in any action or proceeding against it can be served. Such service shall have the same effect as if the applicant was a domestic insurer lawfully served with process in this State. (Enacted by Stats. 1935, Ch. 145.)
  64. 838.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    After an application is filed, the commissioner must examine it and the accompanying papers. The commissioner may also order a detailed examination, audit, and investigation of the applicant and its affairs if advisable.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 838. Upon the filing of such application, the commissioner shall examine it and the other papers and documents filed therewith. He may, if he deems it advisable, cause to be made a detailed examination, audit, and investigation of the applicant and its affairs. (Enacted by Stats. 1935, Ch. 145.)
  65. 838.5.

    ## 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    The commissioner may approve the terms and fairness of a securities issuance and exchange after a hearing.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 838.5. Pursuant to this code, the commissioner has been and is authorized, in the instance of an application for a permit to issue securities in exchange for one or more bona fide outstanding securities, claims or property interest, or partly in such exchange and partly for cash, to approve the terms and conditions of such issuance and exchange and the fairness of such terms and conditions, after a hearing upon the fairness of such terms and conditions, to which all persons to whom it is proposed to issue securities in such exchange shall have the right to appear. (Amended by Stats. 1978, Ch. 795.)
  66. 839.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    The commissioner must issue a permit if the applicant’s plan, securities issuance, and business intentions meet the stated fairness and anti-fraud conditions; otherwise the commissioner must deny the application and notify the applicant in writing.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 839. The commissioner shall issue a permit if he finds that: (a) The proposed plan of business of the applicant and the proposed issuance of securities are fair, just, and equitable. (b) The applicant intends fairly and honestly to transact its business, and (c) The securities the applicant proposes to issue and the methods to be used by it in issuing or disposing of them are such as, in his opinion, will not work a fraud upon the purchaser thereof, or upon policyholders or other security holders of applicant. Otherwise, he shall deny the application and notify the applicant in writing of his decision. (Amended by Stats. 1965, Ch. 1568.)
  67. 839.1.

    ## 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    If a domestic insurer is affected by a transaction needing a permit, the Insurance Commissioner may examine whether the transaction would restrain competition or monopolize insurance, and may deny the permit if the findings are affirmative.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 839.1. (a) In any case where a domestic insurer is directly affected by the total transaction for some part of which the permit applied for is needed, and the commissioner in his discretion determines that reasonable grounds exist for contentions that such total transaction or any part thereof: (1) Is a combination of capital, skill, or acts to create or carry out restrictions on or to prevent competition in the insurance business; or (2) Is a combination (in the form of a trust or otherwise) in restraint of the insurance business; or (3) Is an attempt to monopolize the insurance business; or (4) Is a conspiracy to create any of the foregoing; or (5) That such total transaction, or any part thereof, if consummated will create or result in any of the foregoing or will substantially lessen competition in the insurance business. Then, in such event, the Insurance Commissioner may make findings with respect to whether such total transaction, or any part thereof, would or would not do or be any of the foregoing. (b) In the event the Insurance Commissioner makes affirmative findings as provided in subdivision (a) of this section, he may deny the permit applied for. (Added by Stats. 1965, Ch. 1568.)
  68. 839.5.

    ## 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    The commissioner must not issue a permit to sell securities of a domestic insurer if organization expenses, excluding attorney, accountant, and actuary fees, would exceed 12% of the capital stock paid in.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 839.5. The commissioner shall not issue a permit for the sale of any securities of a domestic insurer in any case where he finds that the expense of organization, exclusive of attorney fees, accountant fees, and actuary fees, will exceed 12 percent of the total amount actually paid for the capital stock. (Amended by Stats. 1972, Ch. 196.)
  69. 840.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    The commissioner may set permit terms for issuing and disposing of securities.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 840. The commissioner may prescribe in the permit the amounts, considerations, terms, and conditions governing the issue and disposal of the securities and the permit authorizes such issue and disposal only in accordance with its provisions. (Enacted by Stats. 1935, Ch. 145.)
  70. 841.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    Every permit must state in bold type that issuing it is permissive only and is not a recommendation or endorsement of the securities.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 841. Every permit shall recite in bold type that the issuance thereof is permissive only and does not constitute a recommendation or endorsement of the securities permitted to be issued. (Enacted by Stats. 1935, Ch. 145.)
  71. 842.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    The commissioner may impose conditions for how securities are handled, sold, and how sale proceeds are dealt with under a permit.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 842. The commissioner may impose conditions requiring the deposit in escrow of securities and the impoundment of the proceeds from the sale thereof, limiting the expense in connection with the sale thereof, and otherwise requiring such method of dealing as he deems reasonable and either necessary or advisable to insure the disposition of the proceeds of such securities in the manner and for the purposes provided in the permit. (Enacted by Stats. 1935, Ch. 145.)
  72. 843.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    The commissioner may change, revoke, or suspend permits and may make reasonable rules and forms for foreign insurers that meet specified standards.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 843. The commissioner may, from time to time and for cause, amend, alter or revoke any permit issued by him hereunder, or temporarily suspend the rights thereunder of the applicant. He also may establish such rules and regulations as are reasonable or necessary to carry out the purposes and provisions of this article. In establishing any such rules and regulations the commissioner is expressly authorized, irrespective of the other provisions of this section or this article, to specify different and simplified forms for both applications and permits where a foreign insurer, whether admitted or not, is seeking to sell or issue securities of its own issue to persons in this state and meets all the following standards: (a) It has, prior to filing the application, made a filing with the Securities and Exchange Commission; (b) It (or a predecessor) has been lawfully engaged in the insurance business for at least five years and currently is admitted to transact insurance in at least five states; (c) It currently has admitted assets of at least five million dollars ($5,000,000); and (d) It has, prior to filing the application, obtained a written permit or consent to issue such securities from the authority in its domiciliary state having jurisdiction over issuances of its securities and the statutory standards for obtaining such permit or consent are comparable to the like standards of this state. (Amended by Stats. 1965, Ch. 372.)
  73. 844.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    Insurers authorized by the commissioner to sell securities must file a report when and in the form the commissioner requires.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 844. Every insurer authorized by the commissioner to sell securities shall thereafter, at such times and in such form as he requires, make and file in his office a report, setting forth: (a) The securities sold by it under the authority of any permit issued by him. (b) The proceeds derived therefrom. (c) The disposition of such proceeds. (d) Such other information concerning its property, officers, or affairs, and relating to or affecting the value of such securities, as the commissioner requires. (Enacted by Stats. 1935, Ch. 145.)
  74. 845.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    A person generally may not sell or resell securities of a domestic, foreign, or alien insurer unless the required permit, certificate, or license authority applies; certain bona fide owner sales are exempt.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 845. (a) A person shall not sell or resell any security of a domestic, foreign, or alien insurer: (1) As an insurer with respect to securities of its own issue without securing the permit of the commissioner as provided in this article. (2) As a stock agent of that insurer except under authority of a certificate issued by the commissioner under this code. (3) As a broker or as a stock agent for a broker except under authority of a certificate or license issued by the Commissioner of Financial Protection and Innovation under the provisions of the Corporations Code and in full conformity with all provisions of the Corporations Code. (b) Subdivision (a) shall not prohibit a bona fide owner of securities of an insurer from selling or reselling those securities if: (1) The securities were originally issued under the authority of a permit of the commissioner and the sale or resale is made in conformity with the conditions, if any, in the permit effective at the time of sale or resale; or (2) The securities were originally issued in a jurisdiction other than California in full conformity with the applicable laws, if any, governing the issuance in that jurisdiction. A sale or resale of securities of an insurer by the owner of the securities which is made for the purpose of evading the provisions of this article requiring an insurer to secure a permit from the commissioner or for any other fraudulent purpose shall, however, be null and void and a violation of the criminal provisions of this article. (c) A sale or resale permitted by this section is subject to the stop power of the commissioner under Section 854 and the similar powers of the Commissioner of Financial Protection and Innovation pursuant to the provisions of the Corporations Code. (d) A violation of this section is subject to the penalties provided in Section 833. (Amended by Stats. 2025, Ch. 558, Sec. 4. (AB 487) Effective January 1, 2026.)
  75. 845.5.

    ## 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    A stock-agent certificate must be secured under Section 846 and expires on July 1 after issuance unless it is sooner suspended or revoked.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 845.5. The certificate required by Section 845 to act as a stock agent of an insurer shall be secured as provided in Section 846 and shall expire on the first day of July after its issue, unless sooner suspended or revoked. The permission granted by Section 845 to persons holding certificates or licenses issued by the Commissioner of Financial Protection and Innovation does not affect the provisions of this article requiring that an insurer and that a stock agent appointed by an insurer secure a permit or certificate from the commissioner to issue, sell, or resell securities and the issue, sale, or resale and the advertising thereof is subject to the provisions of this article, nor does that section permit an owner of securities to sell or resell the same except in conformity with that section and this article. (Amended by Stats. 2025, Ch. 558, Sec. 5. (AB 487) Effective January 1, 2026.)
  76. 846.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    An applicant must file a written, verified application with the commissioner and include the required information.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 846. To secure such certificate, the applicant shall make and file in the office of the commissioner an application therefor in writing, verified by or in behalf of the applicant. Such application shall set forth: (a) The name and address of the applicant. (b) 1. In the case of an applying corporation, association, or joint stock company, the name and address of each of its managing officers and managing stock agents. 2. In the case of an applying partnership, the name and address of each of the partners. (c) A succinct statement of facts showing possession of a good business reputation: 1. By the applicant. 2. In the case of an applicant corporation, association, or joint stock company, by its managing officers and managing stock agents. 3. In the case of an applicant partnership, by its members. (d) If the applicant is a broker, the general plan and character of the business of the applicant. (e) Such other information as the commissioner requires. (Amended by Stats. 2025, Ch. 558, Sec. 6. (AB 487) Effective January 1, 2026.)
  77. 847.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    An applicant for a broker’s certificate must file a $5,000 bond with the commissioner at the time of application, and the bond must be approved by 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 847. At the time of filing an application for a broker’s certificate, the applicant shall file with the commissioner a bond for five thousand dollars ($5,000), payable to the people of the State of California, for the use and benefit of any interested person, to be approved by the commissioner. The bond shall be conditioned upon the following conduct by the broker, the broker’s stock agents, and employees: (a) Strict compliance with the provisions of this article. (b) Honest and faithful application of all funds received. (c) Honest and faithful performance of all obligations and undertakings in the purchase or sale of securities. (d) Payment of all damages suffered by any person damaged or defrauded by reason of the violation of any of the provisions of this article, or by reason of any fraud connected with or growing out of any transaction contemplated by the provisions of this article. (Amended by Stats. 2025, Ch. 558, Sec. 7. (AB 487) Effective January 1, 2026.)
  78. 850.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    A foreign corporation or association applying under this section must file specified documents with its application and appoint the commissioner as attorney for service of process.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 850. If the applicant is a foreign corporation or association, it shall file with its application: (a) A copy of its articles of incorporation or association. (b) A certificate of the proper officer of the jurisdiction in which it is organized, executed not more than thirty days before the filing of such application, showing that the applicant is authorized to transact business in that jurisdiction. (c) In such form as the commissioner prescribes, its written instrument irrevocably appointing the commissioner and his successor in office its true and lawful attorney upon whom all process in any action or proceeding against it, arising out of or founded upon the fraud of such applicant in the sale of securities within this State, or in any action upon any bond provided by this article, can be served. Such service shall have the same effect as if the applicant was a domestic corporation or association lawfully served with process in this State. (Enacted by Stats. 1935, Ch. 145.)
  79. 851.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    The commissioner must review an application, investigate as advisable, issue the certificate if the listed conditions are met, or deny the application and notify the applicant if they are not.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 851. The commissioner shall examine such application, and shall make such further investigation of the applicant and its affairs as he deems advisable. He shall issue the certificate if, from such examination, the commissioner is satisfied that: (a) The business reputation of the applicant and, in the case of a firm or corporation, its officers or members, is good. (b) The sale of the securities proposed to be sold by it would not be unfair, unjust or inequitable to the purchasers thereof. (c) Neither it nor its officers or members have violated any of the provisions of this article. (d) Neither it nor its officers or members have engaged or are about to engage in any fraudulent transaction. Otherwise, he shall deny the application and notify the applicant of his decision. Where a hearing is held under this section 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. 1945, Ch. 901.)
  80. 852.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    The commissioner may suspend or revoke a broker’s or stock agent’s certificate under Section 1738 procedures if the holder has bad business repute, violated this article, or is involved in fraudulent conduct.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 852. The commissioner may at any time in accordance with the procedure provided in Section 1738 suspend or revoke any broker’s or stock agent’s certificate issued by the commissioner if the commissioner finds that the holder thereof is of bad business repute, has violated this article, or has engaged, or is about to engage, in any fraudulent transaction. (Amended by Stats. 2025, Ch. 558, Sec. 8. (AB 487) Effective January 1, 2026.)
  81. 853.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    Every broker must file a true and correct statement about securities sold or offered for sale when the commissioner requires 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 853. Every broker shall, at such times as the commissioner requires, make and file in the office of the commissioner a true and correct statement concerning any security sold or offered for sale by the broker. The statement shall show: (a) The name and location of the principal office of the issuer of such security. (b) The names of the issuer’s managing officers if it is a corporation, or of its members if it is a partnership. (c) The issuer’s assets, liabilities, and issued capital stock, at the close of its fiscal year then last ended, or at a later date. (d) The issuer’s gross income, expenses, and fixed charges for the year next preceding such date, or for such time as such issuer of such security has transacted business, if for less than one year. (e) The approximate price at which the broker has sold or proposes to sell such security. (f) Such other information, of which the broker has knowledge, as the commissioner requires. (Enacted by Stats. 1935, Ch. 145.)
  82. 854.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    A broker may not sell a security after a written notice from the commissioner saying the sale would be unfair, unjust, or inequitable to the purchaser, unless the commissioner later withdraws the objection in writing.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 854. After receipt of notice in writing from the commissioner, stating that the sale of a security would, in the commissioner’s opinion, be unfair, unjust, or inequitable to the purchaser, no broker shall sell such security until and unless the commissioner in writing withdraws the objection. (Enacted by Stats. 1935, Ch. 145.)
  83. 855.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    Writings filed with the commissioner under this article are open to public inspection, but the commissioner may withhold information from public inspection if the public welfare or an insurer’s welfare requires 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 855. All writings filed with the commissioner under this article shall be open to public inspection except where, in his judgment, the public welfare or the welfare of any insurer demands that any portion of such information be not made public. In such cases he may, in his discretion, withhold such information from public inspection for such time as in his judgment is necessary. (Enacted by Stats. 1935, Ch. 145.)
  84. 856.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

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    The commissioner may disclose information about an insurer, or about securities bought or sold in California by an insurer, when the commissioner thinks disclosure is in the public interest or may help prevent fraud.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 856. (a) The commissioner may at any time give or make public any information concerning any insurer, if in the commissioner’s judgment, the giving or publishing of the information will be of public interest. (b) The commissioner may at any time give or make public any information concerning securities purchased or sold within this state by an insurer, if in the commissioner’s judgment, the giving or publishing of the information is in the public interest or it will tend to prevent the fraudulent purchase or sale of the securities. (Amended by Stats. 1990, Ch. 1300, Sec. 1.)
  85. 857.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

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    The commissioner must charge set filing fees for securities-permit applications, and an original or supplemental application may not be amended after the permit is issued or denied.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 857. The commissioner shall charge and collect the following fees: (a) For filing an original or supplemental application, or any amendments thereto, for a permit to issue securities, four thousand two hundred thirty-three dollars ($4,233) except for applications for a permit to issue securities evidencing any change in rights, preferences, privileges, or restrictions on outstanding securities, or for applications for a permit to issue securities evidencing only a share dividend or a share split. (b) For filing an application for a permit to issue securities evidencing any change in the rights, preferences, privileges, or restrictions on outstanding securities, five hundred sixty-seven dollars ($567). (c) For filing an application for a permit to issue securities evidencing a share dividend or a share split, one thousand four hundred ten dollars ($1,410). (d) For filing an application for any other kind of permit, such as an application, for the issuance of a preorganizational or a negotiating permit, an application for a permit to issue options for securities, but not for the securities themselves, or any application for an amendment to an existing permit to issue securities, two hundred eighty-three dollars ($283). (e) An original or supplemental application shall not be amended after the permit sought thereby or by amendment thereto has been issued or denied. (Amended by Stats. 2017, Ch. 534, Sec. 10. (AB 1699) Effective January 1, 2018.)
  86. 859.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

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    The commissioner must collect specified fees for broker’s certificate applications, stock agent’s certificate applications, and examinations, audits, or investigations.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 859. The commissioner shall also collect the following fees: (a) For filing any application for a broker’s certificate, two hundred eighty-three dollars ($283) for the first office or location plus one hundred thirty-six dollars ($136) for each additional office or location. (b) For filing any application for a stock agent’s certificate, one hundred thirty-six dollars ($136). (c) For an examination, audit, or investigation, the actual amount of expenses reasonably incurred in the performance of the work, plus the following: (1) If made by an employee of the commissioner, the actual amount of the compensation paid to that employee for that time. (2) The amount of the usual cost to the state of typing, transcribing, or otherwise preparing any written report of that examination, audit, or investigation that may reasonably be needed in the discharge of the commissioner’s duties. (Amended by Stats. 2025, Ch. 558, Sec. 9. (AB 487) Effective January 1, 2026.)
  87. 860.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. )

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    No fees may be charged or collected for certain copies provided to public officers or for the commissioner’s reports distributed in the ordinary course.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 8. Issue of Securities [820 - 860] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 860. No fees shall be charged or collected for copies of papers, records, or official documents furnished to public officers for use in their official capacity or for the reports of the commissioner in the ordinary course of distribution. (Enacted by Stats. 1935, Ch. 145.)
  88. 880.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 9. Registration of Insurers’ Names [880 - 886] ( Article 9 enacted by Stats. 1935, Ch. 145. )

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    An insurer must do business in California under its own name, unless this article provides an exception.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 9. Registration of Insurers’ Names [880 - 886] ( Article 9 enacted by Stats. 1935, Ch. 145. ) ## 880. Except as provided in this article, every insurer shall conduct its business in this State in its own name. (Enacted by Stats. 1935, Ch. 145.)
  89. 881.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 9. Registration of Insurers’ Names [880 - 886] ( Article 9 enacted by Stats. 1935, Ch. 145. )

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    The commissioner must review and approve insurer-related names before they are used in California business, may reject confusing or misleading names, and can charge a $136 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 9. Registration of Insurers’ Names [880 - 886] ( Article 9 enacted by Stats. 1935, Ch. 145. ) ## 881. (a) The commissioner shall require the name or any changed name of every insurer (including reciprocal or interinsurance exchanges), every attorney in fact, every motor club, and every underwritten title company to be submitted to him or her by written application and approved by him or her before the name is used in this state for business purposes. If approved, the commissioner shall issue his or her official certificate approving the name, and when appropriate, reserving the name for the following time periods, which shall commence on the date of the approval: (1) One year if the applicant is newly formed, or if the application is filed on behalf of an entity to be formed, under the laws of this state. (2) One hundred eighty days and during the pendency in good faith of an application for certificate of authority in the case of a foreign or alien applicant. (3) Ninety days in the case of an admitted entity requesting authority to change the name under which it will conduct its business with the public in this state. (b) Except in the case in which an applicant has already paid a fee on a pending application for admission, the commissioner shall collect a one-hundred-thirty-six-dollar ($136) fee for filing each application for name approval and reservation. An application for name approval may contain not more than three names in the order of applicant’s preference and the commissioner’s approval shall be limited to only one name submitted by any one application. (c) The certificate of approval shall be attached to the articles of incorporation before the Secretary of State shall file the articles or any amended articles. The commissioner may reject any name submitted when it is an interference with, or too similar to one already appropriated, or when it is likely to mislead the public in any respect. In the event of a rejection, the applicant shall legally change its name to one approved by the commissioner or, if a foreign or alien insurer, may arrange to conduct any business it may do with the public in California under an approved name as an operating name, identifying itself under both its true name and operating name in the conduct of all official business with the commissioner. (d) Notwithstanding Section 1282, this section shall apply to reciprocal insurers, including their attorneys in fact, and shall apply to motor clubs. (Amended by Stats. 2017, Ch. 534, Sec. 12. (AB 1699) Effective January 1, 2018.)
  90. 881.1.

    ## 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 9. Registration of Insurers’ Names [880 - 886] ( Article 9 enacted by Stats. 1935, Ch. 145. )

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    The commissioner and the Secretary of State may not reject a proposed name if it was used by the entity for a home protection or home warranty business in California for at least one year before May 3, 1978; once the commissioner determines that use and an application is submitted, the name must be approved.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 9. Registration of Insurers’ Names [880 - 886] ( Article 9 enacted by Stats. 1935, Ch. 145. ) ## 881.1. Notwithstanding the provisions of Section 881 or any other provision of law, neither the commissioner or the Secretary of State shall reject a name proposed by an entity seeking admission as a home protection company if such name was used by such entity for conduct of a home protection or home warranty business in this state for at least one year prior to May 3, 1978. Every such name, upon the commissioner’s determination of such use, shall be approved upon submission of application therefor. (Added by Stats. 1978, Ch. 1203.)
  91. 881.2.

    ## 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 9. Registration of Insurers’ Names [880 - 886] ( Article 9 enacted by Stats. 1935, Ch. 145. )

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    The commissioner may approve an insurer’s use of “savings bank” in a name or title if the rest of the name shows the insurer is actually engaged in insurance business and is not a savings bank.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 9. Registration of Insurers’ Names [880 - 886] ( Article 9 enacted by Stats. 1935, Ch. 145. ) ## 881.2. Notwithstanding Section 5652 of the Financial Code, use of the term “savings bank” in a name or title may be approved for use by the commissioner if the remaining words in the name or title show that the insurer is engaged in the business of insurance and is not a savings bank. (Added by Stats. 2006, Ch. 740, Sec. 3.8. Effective January 1, 2007.)
  92. 881.3.

    ## 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 9. Registration of Insurers’ Names [880 - 886] ( Article 9 enacted by Stats. 1935, Ch. 145. )

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    After the commissioner approves the applicant’s name and issues a certificate, the applicant may apply to the Secretary of State for a certificate reserving the corporate name.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 9. Registration of Insurers’ Names [880 - 886] ( Article 9 enacted by Stats. 1935, Ch. 145. ) ## 881.3. Upon approval of an applicant’s name by the commissioner, and the issuance of a certificate approving the same, the applicant may apply to the Secretary of State for the issuance of a certificate of reservation of corporate name for the same periods specified in Section 881. (Added by Stats. 1979, Ch. 737.)
  93. 881.5.

    ## 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 9. Registration of Insurers’ Names [880 - 886] ( Article 9 enacted by Stats. 1935, Ch. 145. )

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    A corporation in the insurance business may sue for judicial relief if another corporation fails to comply with specified name-registration laws, and the court may order the defendant to change to an acceptable new or operating name.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 9. Registration of Insurers’ Names [880 - 886] ( Article 9 enacted by Stats. 1935, Ch. 145. ) ## 881.5. If through inadvertance or otherwise a corporation does not comply with Section 881 of the Insurance Code, or with Sections 201.5, 202, 2105, 2106, 2106.5, and 2107 of the Corporations Code when any of such sections is applicable, any corporation lawfully engaged in the insurance business in this state may bring an action for judicial relief against such corporation by means of any remedy afforded by law. Such action may be based upon any of the grounds by reason of which the commissioner could or would have denied application for approval of the corporate name of the noncomplying corporation. In such an action the court may order such corporate defendant to adopt a new name or an operating name, when permissible, acceptable to both the Secretary of State and the commissioner, by filing a certificate of amendment or by filing an amended statement and designation with the Secretary of State. (Added by Stats. 1979, Ch. 737.)
  94. 882.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 9. Registration of Insurers’ Names [880 - 886] ( Article 9 enacted by Stats. 1935, Ch. 145. )

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    When two or more insurers want to issue an underwriter’s policy, each insurer must file an application with the commissioner to approve and register the policy name or title.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 9. Registration of Insurers’ Names [880 - 886] ( Article 9 enacted by Stats. 1935, Ch. 145. ) ## 882. When two or more insurers propose to issue an underwriter’s policy, each insurer shall first file an application with the commissioner for approval and registration of the name or title under which the policy is to be issued. The commissioner may reject any name submitted when it is an interference with, or too similar to, one already appropriated or when it is likely to mislead the public in any respect. In that case the application may be amended to submit another or other names. The commissioner shall charge and collect in advance a fee of seventy-two dollars ($72) from each insurer filing an application for approval and registration of that name or title, or for filing any amendment thereto. (Amended by Stats. 2017, Ch. 534, Sec. 13. (AB 1699) Effective January 1, 2018.)
  95. 882.5.

    ## 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 9. Registration of Insurers’ Names [880 - 886] ( Article 9 enacted by Stats. 1935, Ch. 145. )

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    A home protection company must apply to the commissioner before using a second name on a contract, and the commissioner may reject a submitted name in some cases.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 9. Registration of Insurers’ Names [880 - 886] ( Article 9 enacted by Stats. 1935, Ch. 145. ) ## 882.5. (a) A home protection company proposing to issue a contract bearing the name of itself as well as another name which is the name of a person, persons, or organization of persons licensed pursuant to Part 1 (commencing with Section 10000) of Division 4 of the Business and Professions Code, or a franchised name therefor, shall first file an application with the commissioner for approval of the other name. The commissioner may reject any name so submitted when it is an interference with, or too similar to, one already appropriated or when it is likely to mislead the public in any respect. However, the name shall not be rejected, except pursuant to subdivision (b), if the name was used by the same entity for a similar offering in this state prior to May 3, 1978. In case of any rejection of a name pursuant to this subdivision, the application may be amended to submit another or other names. (b) No such name shall be approved unless all power to transact home protection business (except as authorized in Section 771.1) and other powers specified by the commissioner by regulation, are specifically retained by the home protection company and the home protection contracts prominently disclose that fact. The commissioner, pursuant to Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, may adopt reasonable regulations to implement this section. (Amended by Stats. 1985, Ch. 106, Sec. 93.)
  96. 883.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 9. Registration of Insurers’ Names [880 - 886] ( Article 9 enacted by Stats. 1935, Ch. 145. )

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    An underwriter’s policy may be issued under a registered name and must clearly state the insurers, contract severalty, premium shares, and liability shares.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 9. Registration of Insurers’ Names [880 - 886] ( Article 9 enacted by Stats. 1935, Ch. 145. ) ## 883. An underwriter’s policy may be issued under a name thus registered and shall clearly show: (a) The names of the insurers guaranteeing it. (b) The severalty of the contract. (c) The proportion of the premium to be paid to each insurer. (d) The proportion of liability which each assumes. (Enacted by Stats. 1935, Ch. 145.)
  97. 884.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 9. Registration of Insurers’ Names [880 - 886] ( Article 9 enacted by Stats. 1935, Ch. 145. )

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    Underwriter-name approvals and registrations expire unless renewed, and renewal requires filing an application with the commissioner during May and paying a $25 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 9. Registration of Insurers’ Names [880 - 886] ( Article 9 enacted by Stats. 1935, Ch. 145. ) ## 884. Unless renewed, the approval and registration of all underwriters’ names shall expire at 12:01 a.m. July 1 of each even-numbered year. Renewal may be secured by filing with the commissioner an application therefor, together with a fee of twenty-five dollars ($25). An application shall be filed during the month of May preceding that July 1. The commissioner shall furnish the application forms for the renewal. The commissioner shall, upon receipt of a proper renewal application and payment of the filing fee therefor, renew the approval and registration of the underwriter’s name unless he or she finds any of the following: (a) The insurer has abandoned use of the underwriter’s name. (b) The insurer is actually using or publicizing the name in any manner after it has discontinued the issuance of underwriter’s policies bearing that name. (c) The insurer has used that underwriter’s name in a manner that has resulted in misrepresentation or fraud. (d) The insurer has used that underwriter’s name in a manner that would violate any provision of law relating to the conduct of its business. (e) The insurer has secured that underwriter’s name through misrepresentation or concealment of material information. (f) Reasons exist that would warrant refusal of approval or registration if the same were being initially requested. If the commissioner so finds he or she shall advise all insurers using that underwriter’s name in writing that the renewal application is denied and set forth with particularity the reasons for the denial. That denial shall be effective 30 days after mailing of that advice to the insurer unless within those 30 days the insurer requests a hearing. In this event the advice of denial shall constitute the commissioner’s opening pleading for the purpose of the hearing, which shall be deemed denied by the insurer. The insurer if it elects may, within 10 days, file an additional written response. The hearing shall be noticed and commenced within a reasonable time. During those 30 days, and, if a request for hearing is filed, until the termination of that proceeding, the insurer may continue the use of the underwriter’s name and the issuance of policies thereunder provided timely renewal application has been filed and the filing fee paid. (Amended by Stats. 2017, Ch. 534, Sec. 14. (AB 1699) Effective January 1, 2018.)
  98. 885.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 9. Registration of Insurers’ Names [880 - 886] ( Article 9 enacted by Stats. 1935, Ch. 145. )

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    The commissioner may start proceedings to revoke approval and registration of an underwriter’s name.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 9. Registration of Insurers’ Names [880 - 886] ( Article 9 enacted by Stats. 1935, Ch. 145. ) ## 885. The commissioner may at any time institute proceedings for the revocation of approval and registration of an underwriter’s name upon any of the grounds set forth in Section 884 by following the procedure prescribed in that section. (Added by Stats. 1963, Ch. 1494.)
  99. 886.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 9. Registration of Insurers’ Names [880 - 886] ( Article 9 enacted by Stats. 1935, Ch. 145. )

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    Ending approval and registration of an underwriter’s name does not affect certain existing policies, subject to a 60-day effective-date limit and a rule for continuous policies.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 9. Registration of Insurers’ Names [880 - 886] ( Article 9 enacted by Stats. 1935, Ch. 145. ) ## 886. Termination of approval and registration of an underwriter’s name, whether through denial of a renewal application or revocation, shall have no effect on the validity or the retention in force to normal expiration of any underwriter’s policies issued on or prior to the date of such termination with an effective date not more than sixty (60) days after its issue date provided that if any such policy is continuous in form it shall not be continued in force beyond its annual renewal date first occurring after such date of termination. (Added by Stats. 1963, Ch. 1494.)
  100. 9.

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

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    References to this code or another state law include later amendments and additions.

    ## Insurance Code - INS ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1935, Ch. 145. ) ## 9. Whenever any reference is made to any portion of this code or of any other law of this State, such reference shall apply to all amendments and additions thereto now or hereafter made. (Enacted by Stats. 1935, Ch. 145.)
  101. 900.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. )

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    Insurers doing business in this state must file annual and quarterly financial statements with the commissioner by specified deadlines.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. ) ## 900. (a) On or before the first day of March of each year every insurer doing business in this state shall make and file with the commissioner, in the number, form, and by the methods prescribed by the commissioner, statements exhibiting its condition and affairs as of the previous December 31. If the first day of March falls on a day other than a business day, the filing is due to the commissioner by the first business day preceding the first day of March. (b) Each year, on or before the following dates, every insurer doing business in this state shall make and file with the commissioner, in the number, form, and methods prescribed by the commissioner, statements exhibiting its condition and affairs for the period beginning on January 1 of the current calendar year through the end of each quarter of the current year as described below. These quarterly filings shall cover the period of time beginning January 1 of the current year through and including the last day of the quarter for which the report is being made. The first quarter filing shall be filed with the commissioner on or before May 15th of every year. The second quarter filing shall be filed with the commissioner on or before August 15th of every year. The third quarter filing shall be filed with the commissioner on or before November 15th of every year. If any of these dates fall on a day other than a business day, then the filing is due to the commissioner by the first business day preceding that date. (Amended by Stats. 2004, Ch. 599, Sec. 1. Effective January 1, 2005.)
  102. 900.2.

    ## 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. )

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    Insurers doing business in this state must get an annual audit by an independent certified public accountant and file it under NAIC standards.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. ) ## 900.2. (a) All insurers doing business in this state shall have an annual audit by an independent certified public accountant. The audit, including required auditor and management reporting, the audit committee and its membership, and other aspects of the audit content and process, shall be conducted, and the audit report prepared and filed, in conformity with the standards adopted by the National Association of Insurance Commissioners. (b) The commissioner may grant 30-day extensions of the filing date upon a showing by the insurer and its independent certified public accountant of the reasons for requesting each extension and the determination by the commissioner of substantial cause for an extension. The request for an extension shall be submitted in writing not less than 10 days prior to the due date in sufficient detail to permit the commissioner to make an informed decision on the requested extension. (c) The commissioner may promulgate regulations to further the purposes of this section. (Amended by Stats. 2009, Ch. 234, Sec. 5. (AB 299) Effective January 1, 2010.)
  103. 900.3.

    ## 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. )

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    Insurers and groups of insurers doing business in this state must set up an internal audit function, keep it independent, and report regularly to the audit committee.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. ) ## 900.3. (a) An insurer or group of insurers doing business in this state shall establish an internal audit function to provide independent, objective, and reasonable assurance to the insurer’s audit committee and management regarding the insurer’s governance, risk management, and internal controls. This assurance shall be provided by performing general and specific audits, reviews, and tests, and by employing other techniques deemed necessary to protect assets, evaluate control effectiveness and efficiency, and evaluate compliance with policies and regulations. (b) The audit committee of an insurer or group of insurers shall be responsible for overseeing the insurer’s internal audit function and granting the person or persons performing the internal audit function suitable authority and resources to fulfill the responsibilities required by this section. (c) To ensure that an internal auditor remains objective, the internal audit function shall be organizationally independent. Organizational independence does not preclude dual-reporting relationships. The internal audit function shall not defer ultimate judgment on audit matters to others. (d) (1) An individual shall be appointed to head the internal audit function, and shall have direct and unrestricted access to the insurer’s board of directors or audit committee. (2) The head of the internal audit function shall report to the insurer’s audit committee regularly, but not less than annually, regarding all of the following: (A) The periodic audit plan. (B) Factors that may adversely impact the internal audit function’s independence or effectiveness. (C) Material findings from completed audits. (D) The appropriateness of corrective actions implemented by management as a result of audit findings. (e) If an insurer is a member of an insurance holding company system or a group of insurers, the insurer may comply with this section at the ultimate controlling parent level, an intermediate holding company level, or the individual legal entity level. (f) This section shall not apply to an insurer if either of the following apply: (1) The insurer has annual direct written and unaffiliated assumed premium of less than five hundred million dollars ($500,000,000), including international direct and assumed premium, but excluding premiums reinsured with the Federal Crop Insurance Corporation and National Flood Insurance Program. (2) The insurer is a member of a group of insurers, and the group of insurers has annual direct written and unaffiliated assumed premium of less than one billion dollars ($1,000,000,000), including international direct and assumed premium, but excluding premiums reinsured with the Federal Crop Insurance Corporation and National Flood Insurance Program. (g) For purposes of this section, “internal audit function” means a person or persons that provide independent, objective, and reasonable assurance designed to add value, improve an organization’s operations, and accomplish an organization’s objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes. (Added by Stats. 2019, Ch. 201, Sec. 3. (AB 1813) Effective January 1, 2020.)
  104. 900.5.

    ## 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. )

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    The commissioner must charge a $420 fee in advance for the first annual filing of a statement under this article, and only one fee may be charged from any one insurer in a calendar year.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. ) ## 900.5. The commissioner shall charge and collect four hundred twenty dollars ($420) in advance as a fee for the first filing each year of a statement under this article. Only one fee shall be charged or collected from any one insurer in any one calendar year. (Amended by Stats. 2017, Ch. 534, Sec. 15. (AB 1699) Effective January 1, 2018.)
  105. 900.8.

    ## 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. )

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    The commissioner may refuse, renew, suspend, or revoke an insurer’s certificate of authority if the insurer knowingly files a false financial statement with the department.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. ) ## 900.8. The commissioner may decline to grant or renew or may suspend or revoke a certificate of authority of an insurer that knowingly files with the department a false financial statement. (Added by Stats. 1957, Ch. 395.)
  106. 900.9.

    ## 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. )

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    Certain insurer officers, directors, employees, and agents must not knowingly file or sign false reports or statements about the insurer, especially when trying to deceive a public official or regulator.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. ) ## 900.9. Any officer, director, employee or agent of any insurer, who wilfully signs or files a false or untrue report or statement of the business, affairs, or condition of such insurer with intent to deceive any public officer, office, or board to which such insurer is required by law to report, or which has authority by law to examine into its affairs or transactions, is guilty of a felony. (Added by Stats. 1957, Ch. 395.)
  107. 9010.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 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 7. Cancellation of Membership [9010 - 9012] ( Article 7 enacted by Stats. 1935, Ch. 145. )

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    A member of the reinsurer may cancel a reinsurance policy while the reinsurer keeps operating its reinsurance 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 7. Cancellation of Membership [9010 - 9012] ( Article 7 enacted by Stats. 1935, Ch. 145. ) ## 9010. Any member of such reinsurer may cancel any policy of reinsurance at any time while the reinsurer continues its reinsurance business. (Enacted by Stats. 1935, Ch. 145.)
  108. 9011.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 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 7. Cancellation of Membership [9010 - 9012] ( Article 7 enacted by Stats. 1935, Ch. 145. )

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    Cancellation of membership may be done only if the listed requirements are met.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. County Mutual Fire Reinsurers [7080 - 9060] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Cancellation of Membership [9010 - 9012] ( Article 7 enacted by Stats. 1935, Ch. 145. ) ## 9011. The cancellation may be accomplished only by complying with all of the following requirements: (a) Surrender of policy for cancellation. (b) Giving ten days’ notice in writing to the secretary of the reinsurer. (c) Payment of the member’s share of all claims that exist against the reinsurer. (Enacted by Stats. 1935, Ch. 145.)
  109. 9012.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 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 7. Cancellation of Membership [9010 - 9012] ( Article 7 enacted by Stats. 1935, Ch. 145. )

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    A reinsurer may cancel or end a policy if it gives the member 10 days’ written notice and returns any excess premium paid over reinsurance cost.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 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 7. Cancellation of Membership [9010 - 9012] ( Article 7 enacted by Stats. 1935, Ch. 145. ) ## 9012. The reinsurer may cancel or terminate any policy by giving the member ten days’ written notice and returning to it any excess of premium paid during the term of the policy over the cost of its reinsurance as measured by the rules or methods of admitted fire insurers issuing nonassessable policies on a reserve basis. (Enacted by Stats. 1935, Ch. 145.)
  110. 902.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. )

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    Compensation insurers must file supplemental statements when the commissioner requires, and those reports do not have to be published.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. ) ## 902. Insurers engaged in the business of compensation insurance shall, at such intervals as may be prescribed by the commissioner, file statements supplemental to such annual statements and covering such matters dealt with in such annual statements as the commissioner designates. Neither such supplemental report nor any synopsis thereof need be published. (Enacted by Stats. 1935, Ch. 145.)
  111. 903.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. )

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    The commissioner must require insurance statements and reports to be verified in specific ways.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. ) ## 903. The commissioner shall require statements and reports to be verified as follows: (a) If made by a domestic corporation, by the oaths of any two of the executive officers thereof. (b) If made by an individual or firm, by the oath of such individual or a member of the firm. (c) If made by a foreign insurer, by the oath of the principal executive officer thereof, or manager, residing within the United States. (Enacted by Stats. 1935, Ch. 145.)
  112. 903.5.

    ## 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. )

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    The commissioner may accept and file certain insurer financial statements or reports when they are verified by affidavit of specified officers, instead of the verification or signature otherwise required.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. ) ## 903.5. In any case where an insurer is required by law to file with the commissioner statements or reports respecting its financial condition, income or disbursements, verified or signed by its designated officers, agents, or employees, the commissioner may accept and file the statement or report verified by affidavit of the president or vice president and the treasurer or secretary of such insurer, in lieu of the verification or signature otherwise prescribed by law. (Added by Stats. 1937, Ch. 724.)
  113. 9030.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 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 8. Reports and Statements [9030 - 9031] ( Article 8 enacted by Stats. 1935, Ch. 145. )

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    The secretary must prepare an annual statement and a supplemental business report for the reinsurer and present both at the ensuing 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 6. County Mutual Fire Reinsurers [7080 - 9060] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Reports and Statements [9030 - 9031] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 9030. The secretary shall prepare an annual statement, showing the condition of such reinsurer on December thirty-first and a supplemental report of the business of the reinsurer to January thirty-first and present both reports at the ensuing annual meeting. (Enacted by Stats. 1935, Ch. 145.)
  114. 9031.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 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 8. Reports and Statements [9030 - 9031] ( Article 8 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 of 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 6. County Mutual Fire Reinsurers [7080 - 9060] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Reports and Statements [9030 - 9031] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 9031. 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.)
  115. 904.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. )

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    Each admitted insurer must file an authorization allowing disclosure of certain financial records to the commissioner, in addition to the annual statement.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. ) ## 904. In addition to the annual statement required to be filed pursuant to Section 900, each admitted insurer shall file an authorization for disclosure to the commissioner of financial records pertaining to such funds pursuant to Section 7473 of the Government Code, to be effective until the next such annual filing. (Added by Stats. 1976, Ch. 1320.)
  116. 9050.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 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 9. Dissolution [9050- 9050.] ( Article 9 enacted by Stats. 1935, Ch. 145. )

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    A county mutual fire reinsurer may be proceeded against and dissolved like other domestic 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 6. County Mutual Fire Reinsurers [7080 - 9060] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 9. Dissolution [9050- 9050.] ( Article 9 enacted by Stats. 1935, Ch. 145. ) ## 9050. Any such reinsurer may be proceeded against and dissolved in the same manner and upon the same conditions as in the case of other domestic insurers. (Enacted by Stats. 1935, Ch. 145.)
  117. 9060.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 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 10. Exemptions [9060- 9060.] ( Article 10 enacted by Stats. 1935, Ch. 145. )

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    Sections 980 through 993 do not apply to county mutual fire reinsurers.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 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 10. Exemptions [9060- 9060.] ( Article 10 enacted by Stats. 1935, Ch. 145. ) ## 9060. The provisions of Sections 980, 981, 982, 983, 984, 985, 986, 987, 988, 989, 990, 991, 992, and 993 shall not apply to county mutual fire reinsurers. (Amended by Stats. 1951, Ch. 34.)
  118. 9080.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. )

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    Certain older associations under this chapter are exempt from the Insurance Code and other state insurance laws, except as this chapter provides; no other association may be formed or transact insurance under this chapter.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. ) ## 9080. Except as provided by this chapter, an association organized and operating on or before January 1, 1947, under this chapter is not governed by the provisions of this code or other insurance laws of this State. No other association shall be formed or transact insurance under this chapter. (Amended by Stats. 1947, Ch. 1083.)
  119. 9080.1.

    ## 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 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. )

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    An association may not transact insurance under this chapter unless it has and keeps a certificate of exemption 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 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. ) ## 9080.1. On and after January 1, 1954, no association shall transact insurance under this chapter unless it has theretofore received and continues to hold a certificate of exemption from the commissioner. Before procuring such certificate such association shall file with the commissioner certified copies of the articles of incorporation, association, by-laws, rules and regulations or other organization or governing documents, together with certified copies of all evidences of insurance which it proposes to issue. It shall thereafter file with the commissioner certified copies of all amendments to such documents or evidences. The commissioner shall issue such certificate of exemption upon application by such association and a showing by it that it qualifies therefor under the provisions of this chapter. Such certificate of exemption is subject to suspension or revocation by the commissioner if the organization fails to comply with the requirements of this chapter. 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. Such association is subject to Sections 1 to 41, inclusive, and to Articles 4 and 14 of Chapter 1, Part 2, Division 1 of this code. (Added by Stats. 1953, Ch. 1564.)
  120. 9080.3.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. )

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    Certain religious organizations that write fire insurance for members and churches are subject to this chapter, but they cannot exceed specified insurance limits or insure business property in incorporated cities.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. ) ## 9080.3. Any religious organization engaged in the business of writing fire insurance solely for its members and its churches on the effective date of this section, and which has been doing so continuously in California since January 1, 1925, is subject to all applicable provisions of this chapter. Any religious organization described in this section shall not write insurance: (a) In excess of 10 percent of its capital and surplus as shown in its last statement on file with the commissioner, on any one risk, or in excess of 20 percent of its capital and surplus as shown in its last statement on file with the commissioner in any one city block within an incorporated city without immediately reinsuring the excess over those amounts. (b) On business property within any incorporated city. (Amended by Stats. 1998, Ch. 392, Sec. 1. Effective January 1, 1999.)
  121. 9081.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. )

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    Certain secret fraternal societies may form an insurer if they meet the stated lodge-system and ritual requirements.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. ) ## 9081. Secret fraternal societies, having lodges, councils or granges in this State, conducting their business and securing their membership on the lodge, council or grange system exclusively, and having ritualistic work and ceremonies in their lodges, councils or granges, may form an insurer by association of the members of their order or society, binding themselves to contribute to each other’s loss by fire. (Enacted by Stats. 1935, Ch. 145.)
  122. 9082.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. )

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    A fraternal fire association must be formed by filing certificates with the Secretary of State and the relevant county clerk offices, and each certificate must state key information and be signed and verified by officers.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. ) ## 9082. Such association shall be formed by filing a certificate in the office of the Secretary of State and a like certificate in the office of the clerk of each county in which a member has property insured in said association. Each such certificate shall state: (a) Generally, the objects of the association. (b) Its principal place of business. (c) The names of its officers. Such certificates shall be signed by the officers of the association and verified by at least three of them. (Enacted by Stats. 1935, Ch. 145.)
  123. 9083.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. )

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    Officers of the association must be members of the association and have property insured there.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. ) ## 9083. The officers of the association shall be members of the association, having property insured therein. (Enacted by Stats. 1935, Ch. 145.)
  124. 9084.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. )

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    A fraternal fire insurer may insure members’ property against fire loss or damage, but only up to $10,000 on any one risk and subject to specified written-risk and premium conditions.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. ) ## 9084. Such an association may insure the property of its members against loss or damage by fire for an amount not exceeding ten thousand dollars ($10,000) on any one risk, subject to the following conditions as to amount: (a) A risk in excess of three thousand five hundred dollars ($3,500) shall not be binding as to such excess until risks to the amount of two hundred thousand dollars ($200,000) have been written and all premiums paid thereon. (b) A risk of more than one thousand five hundred dollars ($1,500) shall not be binding as to such excess until risks to the amount of one hundred thousand dollars ($100,000) have been written and all premiums paid thereon. (c) A risk regardless of amount, shall not be binding until risks to the amount of seventy-five thousand dollars ($75,000) have been written and all premiums paid thereon. (Amended by Stats. 1965, Ch. 84.)
  125. 9085.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. )

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    The association may write a risk only for members in good standing, and membership suspension or withdrawal suspends the insurance until good standing is restored.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. ) ## 9085. A risk shall not be written by such association except for members in good standing on the books of the society forming the association. A suspension or withdrawal from membership in such society shall suspend the insurance until the member is restored to good standing in the society and association. A restoration to membership after suspension therefrom shall not extend the term of the insurance. (Enacted by Stats. 1935, Ch. 145.)
  126. 9086.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. )

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    These associations must classify insured property when issuing policies and use different rates that reflect fire-loss risk as closely as practicable.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. ) ## 9086. All such associations shall classify the property insured by them at the time of issuing policies on such property. The classification shall be under different rates, corresponding as nearly as practicable to the greater or less risk from fire loss attached to the insured property. (Enacted by Stats. 1935, Ch. 145.)
  127. 9087.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. )

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    Property within city or town limits may not be insured, except for dwellings and their contents, grange halls and their contents, other grange property, and buildings appurtenant to them.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. ) ## 9087. No property within the corporate limits of any city or town shall be insured except dwellings and the contents thereof, grange halls and the contents thereof, other grange property, and any buildings appurtenant thereto. (Amended by Stats. 1959, Ch. 167.)
  128. 9087.5.

    ## 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 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. )

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    Section 9087 does not apply to certain insurance covering a member’s insurable interest in property that was already insured before the property was brought within a city’s limits.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. ) ## 9087.5. Section 9087 is not applicable to insurance covering an insurable interest of a member in property which was insured by the association prior to the inclusion of the property within the corporate limits of a city. (Added by Stats. 1947, Ch. 1083.)
  129. 9088.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. )

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    The association must put in its by-laws a process for determining fire loss or damage and for paying it.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. ) ## 9088. Such association shall provide in its by-laws for the ascertainment of loss or damage by fire, and for the payment thereof. (Enacted by Stats. 1935, Ch. 145.)
  130. 9089.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. )

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    The association may sue and be sued, lend funds it has on hand, own certain real property, and make by-laws consistent with state 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 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. ) ## 9089. Such association by and in its own name may: (a) Sue and be sued. (b) Loan such funds as it has on hand in such manner as its articles of association and its by-laws provide. (c) Own sufficient real property for its business purposes, and such other real property as it becomes necessary to purchase on foreclosure of its mortgages. Real estate obtained by such foreclosure shall be sold and conveyed within five years from the time title vests in the association. (d) Make such by-laws, not inconsistent with the laws of this State, as are necessary for its government and for the transaction of its business. (Enacted by Stats. 1935, Ch. 145.)
  131. 9090.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. )

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    An association creates a mutual agreement among its members to share each other’s fire losses.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. ) ## 9090. Such association creates a mutual agreement of its members to participate in each other’s loss by fire. (Enacted by Stats. 1935, Ch. 145.)
  132. 9091.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. )

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    Each insured must give the association a written instrument agreeing to pay their share of operating expenses and fire losses during the policy term.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. ) ## 9091. Every insured shall give to the association a written instrument binding him to pay his share, proportioned to his insurance in the association, of the expense of operation and of the fire loss sustained by it during the term of his policy. Such loss consists of amounts paid or owing to insureds by reason of losses under the terms of fire policies issued by the association, together with the necessary expenses of the association in respect to such losses. (Enacted by Stats. 1935, Ch. 145.)
  133. 9092.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. )

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    People insuring property with the association must pay a cash percentage and any other charges required by the association’s rules or by-laws when they effect the insurance.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. ) ## 9092. Persons insuring property with the association shall, at the time of effecting the insurance, pay such a percentage in cash, and such other charges, as are required by the rules or by-laws of the association. (Enacted by Stats. 1935, Ch. 145.)
  134. 9093.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. )

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    Either party to the policies may cancel them.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. ) ## 9093. Policies of the association may be canceled by either party thereto. In such case settlement or adjustment shall be made in accordance with the terms of the by-laws of the association. (Enacted by Stats. 1935, Ch. 145.)
  135. 9094.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. )

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    The secretary of each association must prepare an annual financial statement, have it verified under oath by the president and secretary, and send a copy to the commissioner by March 1 each 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 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. ) ## 9094. The secretary of each such association shall prepare an annual statement showing the financial condition of the association, including a statement of all assets and liabilities, as of the thirty-first day of December then next preceding. Such statement shall be verified under oath by the president and secretary of the association. A copy of the verified statement shall be transmitted to the commissioner on or before the first day of March of each year. (Added by Stats. 1947, Ch. 1083.)
  136. 9095.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. )

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    An association may add specified coverages to a fire policy and may insure against listed additional risks. The section also defines “explosion” and excludes certain hot water heaters from the terms “boiler,” “heater,” and “pressure vessel.”

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. ) ## 9095. (a) (1) An association may, if it has issued an insurance policy against fire, endorse that policy to extend the coverage thereof to include loss or damage caused by windstorm, cyclone, tornado and hail, explosion, riot, riot attending a strike, aircraft, vehicles and smoke, and to include waiver of the fallen building clause. (2) An association may also insure against any or all of the following: (A) Water damage from plumbing and heating systems. (B) Rupture or bursting of steam or hot water heating system. (C) Vandalism or malicious mischief. (D) Glass breakage. (E) Ice, snow, and freezing. (F) Fall of trees. (G) Collapse. (H) Burglary and theft. (I) Mysterious disappearance. (J) Liability. (b) As used in this section “explosion” does not include explosions (1) of any boiler, heater, or other fired pressure vessel, caused by pressure of contents, (2) of any unfired pressure vessel or of any piping caused by pressure of contents or vacuum, (3) of any engine, turbine, compressor, pump, or wheel, (4) of any electrical apparatus, or (5) of any other machine having moving or rotating parts. This restricted definition of “explosion” does not exclude loss or damage by fire only where fire ensues. (c) As used in this section, the terms “boiler,” “heater,” and “pressure vessel,” do not include hot water heaters used solely to provide hot water for delivery to faucets for domestic purposes and having a storage capacity of not more than 50 gallons. (Amended by Stats. 2017, Ch. 190, Sec. 2. (AB 407) Effective January 1, 2018.)
  137. 9096.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. )

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    An association certificated under this chapter is treated as a charitable and benevolent institution, and its funds are exempt from most state and local taxes.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. ) ## 9096. An association certificated under this chapter is hereby declared to be a charitable and benevolent institution, and all of its funds shall be exempt from all and every state, county, district, municipal, and school tax, other than taxes on real estate and office equipment. (Added by Stats. 1953, Ch. 1564.)
  138. 9097.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. )

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    A certified association or organization may reinsure all of its policies and may transfer its assets to a mutual insurer, if it complies with Sections 9098 through 9103 and, for the asset transfer, if the mutual insurer assumes all 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 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. ) ## 9097. An association or organization certified under this chapter may reinsure all of its policies with, and, upon the assumption of all of its liabilities, may transfer its assets to, any mutual insurer admitted to transact the classes of insurance embraced within the policies issued by such organization or association, upon compliance with Sections 9098 through 9103, inclusive. (Added by Stats. 1967, Ch. 1262.)
  139. 9098.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. )

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    A plan and agreement for a transaction allowed by Section 9097 must be approved by the organization’s board or governing body and submitted to the commissioner with an approval application and a $494 fee.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. ) ## 9098. The plan and agreement by which any transaction permitted by Section 9097 is to be effected shall be approved by the board of directors or other governing body of that organization or association and submitted to the commissioner accompanied by an application for approval thereof and a fee of four hundred ninety-four dollars ($494). (Amended by Stats. 2017, Ch. 534, Sec. 58. (AB 1699) Effective January 1, 2018.)
  140. 9099.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. )

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    The commissioner must examine the plan and agreement and may require changes or actions to make the transaction fair and equitable to the members.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. ) ## 9099. The commissioner shall examine such plan and agreement and may require such provisions to be inserted in the agreement and such actions to be taken in connection with the transaction (including but not limited to: (1) the terms of the reinsurance, transfer and assumption, (2) the terms of the notice of the vote thereon by the members of such organization or association, and (3) the manner and form of voting thereon by such members) as he may deem necessary in order that the transaction shall be fair and equitable to the members of such organization or association. (Added by Stats. 1967, Ch. 1262.)
  141. 9100.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. )

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    A plan and agreement must be approved by the commissioner, with any changes the commissioner requires, and then approved by at least two-thirds of the members voting in person or by proxy at a members’ 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 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. ) ## 9100. When any such plan and agreement shall have been approved by the commissioner with such changes, if any, required by him, the same shall be approved by a vote of not less than two-thirds of those members of such organization or association voting in person or by proxy at a meeting of the members. (Added by Stats. 1967, Ch. 1262.)
  142. 9101.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. )

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    Before members vote on a reinsurance, transfer, and assumption plan, they must receive written or printed notice at least 30 days in advance, and 5% of voting members present in person or by proxy makes a quorum unless governing documents require more.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. ) ## 9101. The meeting of members at which the transaction is voted upon shall be preceded by a written or printed notice of the meeting and of the purpose to vote thereat upon the plan or agreement for reinsurance, transfer and assumption, addressed to each member of record on the date of the notice and mailed at least 30 days before the date fixed for the meeting. The presence in person or by proxy of 5 percent of the members of such organization or association entitled to vote shall constitute a quorum unless a higher percentage is required by the articles of incorporation, association, bylaws, rules or regulations or other organization or governing documents. In the absence of a quorum, the members present at the meeting in person or by proxy may adjourn the meeting to a later date and no further notice need be given of the date to which the meeting is adjourned. (Added by Stats. 1967, Ch. 1262.)
  143. 9102.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. )

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    If the members approve the reinsurance plan, a certified copy of the proceedings must be filed with the commissioner. If the commissioner finds the proceedings lawful and consistent with his requirements, he must issue a certificate approving the plan and agreement, and the transaction then becomes effective.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. ) ## 9102. If the members vote to approve the plan of reinsurance, transfer and assumption, a certified copy of all proceedings relating thereto shall be filed with the commissioner. If the commissioner finds that the proceedings have been in accordance with the law and his requirements, he shall issue his certificate approving the plan and the agreement and the transaction shall become effective at that time or upon such later date as may be specified in the agreement. (Added by Stats. 1967, Ch. 1262.)
  144. 9103.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. )

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    The governing body must file a duplicate original of the commissioner’s approving certificate with the Secretary of State. After that filing, the organization stops existing except for winding up its affairs.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Fraternal Fire Insurers [9080 - 9103] ( Chapter 7 enacted by Stats. 1935, Ch. 145. ) ## 9103. The board of directors or other governing body of such organization or association shall file with the Secretary of State a duplicate original of the commissioner’s certificate approving the plan and agreement and thereupon such organization or association shall cease to exist except for the purpose of completing the winding up of its affairs. (Added by Stats. 1967, Ch. 1262.)
  145. 922.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. )

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    A specified Small Business Administrator guarantee is treated as a contract of reinsurance for purposes of 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. ) ## 922. The guarantee by the Small Business Administrator that a surety shall not suffer loss as set forth in the Small Business Investment Act of 1958, as amended, shall for all purposes and requirements under this code be deemed a contract of reinsurance between such surety and an authorized or admitted reinsurer irrespective of whether or not such guarantee contains all the provisions required of other reinsurance contracts. (Added by Stats. 1973, Ch. 383.)
  146. 922.1.

    ## 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. )

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    The Legislature says assuming insurers may need to provide security for reinsurance obligations, and the commissioner can decide what happens to that security if the insurer becomes insolvent or receivership starts.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. ) ## 922.1. The Legislature declares its intent that: (a) In some instances, it is appropriate for the protection of insureds, insurers, and the public generally, that assuming insurers be required to provide security for the payment of their reinsurance obligations. (b) Where such security is provided and upon the insolvency of the assuming insurer or initiation of receivership proceedings against it, the commissioner shall have the authority to determine whether it is in the best interest of insureds, claimants, and insurers to retain such security in the United States, to allow the filing of claims against the assuming insurer in the United States, and to have such claims valued in a United States proceeding subject to United States laws. (c) In furtherance of the protection of insureds, insurers, and the public generally, the Legislature hereby states that these matters are fundamental to the business of insurance and hereby exercises its powers and privileges available pursuant to Sections 1011 and 1012 of Title 15 of the United States Code. (Repealed and added by Stats. 1996, Ch. 840, Sec. 2. Effective January 1, 1997.)
  147. 922.2.

    ## 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. )

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    A reinsurance contract must include specified protections before credit for reinsurance is allowed to a domestic ceding insurer.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. ) ## 922.2. (a) Credit for reinsurance shall be allowed a domestic ceding insurer as either an asset or a deduction from liability in accordance with Sections 922.4 and 922.5 only if the reinsurance contract contains provisions that provide, in substance, as follows: (1) The reinsurer shall indemnify the ceding insurer for the risk it has assumed according to the terms and conditions contained in the reinsurance contract. (2) In the event of insolvency, or a change in the status of the ceding company as defined in this section, and the appointment of a conservator, liquidator, or statutory successor of the ceding company, the reinsurance shall be payable to the conservator, liquidator, or statutory successor on the basis of claims allowed against the insolvent company by any court of competent jurisdiction or by any conservator, liquidator, or statutory successor of the company having authority to allow those claims, without diminution because of that insolvency or change in status, or because the conservator, liquidator, or statutory successor has failed to pay all or a portion of any claims. Payments by the reinsurer as set forth in this subdivision shall be made directly to the ceding insurer or to its conservator, liquidator, or statutory successor, except where the contract of insurance or reinsurance specifically provides another payee of such reinsurance in the event of the insolvency or change in status of the ceding insurer. The reinsurance contract may provide that the conservator, liquidator, or statutory successor of a ceding insurer shall give written notice of the pendency of a claim against the ceding insurer indicating the policy or bond reinsured, within a reasonable time after such claim is filed and the reinsurer may interpose, at its own expense, in the proceeding in which the claim is to be adjudicated, any defense or defenses which it may deem available to the ceding insurer or its conservator, liquidator, or statutory successor. The expense thus incurred by the reinsurer shall be payable subject to court approval out of the estate of the insolvent ceding insurer as part of the expense of conservation or liquidation to the extent of a proportionate share of the benefit which may accrue to the ceding insurer in conservation or liquidation, solely as a result of the defense undertaken by the reinsurer. (b) Payment pursuant to a reinsurance contract shall be made within a reasonable time with reasonable provision for verification in accordance with the terms of the reinsurance agreement. However, in no event shall the payments be beyond the period required by the National Association of Insurance Commissioners (NAIC) Accounting Practices and Procedures Manual. (c) The original insured or policyholder shall not have any rights against the reinsurer which are not specifically set forth in the contract of reinsurance, or in a specific agreement between the reinsurer and the original insured or policyholder. (d) For purposes of this section, the phrase “change in the status of the ceding company” means a finding by the commissioner that conditions set forth in subdivision (d) or (i) of Section 1011, a Regulatory Action Level Event as defined in Section 739.4, or any other event which permits the appointment of a conservator, liquidator, or statutory successor has occurred with respect to the ceding company. (Amended by Stats. 2012, Ch. 277, Sec. 2. (SB 1216) Effective January 1, 2013.)
  148. 922.3.

    ## 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. )

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    A ceding insurer may not count credit for reinsurance as an asset or deduction unless the reinsurer truly indemnifies the insurer for some or all of the original loss or liability.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. ) ## 922.3. Notwithstanding any other provision of law, credit for reinsurance, as either an asset or a deduction, shall not be allowed in any accounting or financial statement of the ceding insurer in respect to any so-called reinsurance contract unless, in such contract, the reinsurer undertakes to indemnify the ceding insurer, not only in form but in fact, against all or a part of the loss or liability arising out of the original insurance. (Amended by Stats. 1996, Ch. 840, Sec. 6. Effective January 1, 1997.)
  149. 922.31.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. )

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    Ceding insurers must manage reinsurance recoverables and diversify reinsurance; domestic ceding insurers must notify the commissioner within 30 days if specified concentration limits are exceeded or likely to be exceeded.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. ) ## 922.31. (a) A ceding insurer shall take steps to manage its reinsurance recoverables proportionate to its own book of business. A domestic ceding insurer shall notify the commissioner within 30 days after reinsurance recoverables from any single assuming insurer, or group of affiliated assuming insurers, exceeds 50 percent of the domestic ceding insurer’s last reported surplus to policyholders, or after it is determined that reinsurance recoverables from any single assuming insurer, or group of affiliated assuming insurers, is likely to exceed this limit. The notification shall demonstrate that the exposure is safely managed by the domestic ceding insurer. (b) A ceding insurer shall take steps to diversify its reinsurance program. A domestic ceding insurer shall notify the commissioner within 30 days after ceding to any single assuming insurer, or group of affiliated assuming insurers, more than 20 percent of the ceding insurer’s gross written premium in the prior calendar year, or after it has determined that the reinsurance ceded to any single assuming insurer, or group of affiliated assuming insurers, is likely to exceed this limit. The notification shall demonstrate that the exposure is safely managed by the domestic ceding insurer. (Added by Stats. 2012, Ch. 277, Sec. 3. (SB 1216) Effective January 1, 2013.)
  150. 922.4.

    ## 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. )

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    This section allows credit for reinsurance only when the reinsurer meets listed conditions, and it lets the commissioner set additional regulatory requirements.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. ) ## 922.4. Credit for reinsurance shall be allowed a domestic ceding insurer as either an asset or a deduction from liability on account of reinsurance ceded only when the reinsurer meets the requirements of subdivision (a), (b), (c), (d), (e), or (f). Credit shall be allowed under subdivision (a), (b), (c), or (e) only for cessions of those kinds or classes of business that the assuming insurer is licensed or otherwise permitted to write or assume in its state of domicile or, in the case of a United States branch of an alien assuming insurer, in the state through which it is entered and licensed to transact insurance or reinsurance. The commissioner may adopt by regulation specific additional requirements relating to or setting forth the valuation of assets or reserve credits, the amount and forms of security supporting reinsurance arrangements described in subdivision (b) of Section 922.85, and the circumstances pursuant to which credit will be reduced or eliminated. (a) Credit shall be allowed when the reinsurance is ceded to an assuming insurer that is licensed to transact insurance or reinsurance in this state unless the assuming insurer is the subject of a regulatory order or regulatory oversight by any state in which it is licensed based upon a commissioner’s determination that the assuming insurer is in a hazardous financial condition. (b) (1) Credit shall be allowed when the reinsurance is ceded to an assuming insurer that is accredited as a reinsurer in this state unless the assuming insurer is the subject of a regulatory order or regulatory oversight by any state in which it is licensed based upon a commissioner’s determination that the assuming insurer is in a hazardous financial condition. An accredited reinsurer is one that does all of the following: (A) Files with the commissioner evidence of its submission to this state’s jurisdiction. (B) Submits to this state’s authority to examine its books and records. (C) Designates the commissioner or a designated attorney in this state as its true and lawful attorney upon whom may be served any lawful process in any action, suit, or proceeding instituted by or on behalf of the ceding insurer. (D) Is licensed to transact insurance or reinsurance in at least one state, or in the case of a United States branch of an alien assuming insurer, is entered through and licensed to transact insurance or reinsurance in at least one state. (E) Files annually with the commissioner a copy of its annual statement filed with the insurance department of its state of domicile and a copy of its most recent audited financial statement and other financial information requested by the commissioner. (F) Submits a statement, signed and verified by an officer of the assuming insurer to be true and correct, that discloses whether the assuming insurer or any affiliated person who owns or has a controlling interest in the assuming insurer is currently known to be the subject of any of the following: (i) Any order or proceeding regarding conservation, liquidation, or receivership. (ii) Any order or proceeding regarding the revocation or suspension of a license or accreditation to transact insurance or reinsurance in any jurisdiction. (iii) Any order or proceeding brought by an insurance regulator in any jurisdiction seeking to restrict or stop the assuming insurer from transacting insurance or reinsurance based upon a hazardous financial condition. The assuming insurer shall provide the commissioner with copies of any orders or other documents initiating proceedings subject to disclosure under this paragraph. The statement shall affirm that no actions, proceedings, or orders subject to this subparagraph are outstanding against the assuming insurer or any affiliated person who owns or has a controlling interest in the assuming insurer, except as disclosed in the statement. (G) Demonstrates to the satisfaction of the commissioner that it has adequate financial capacity to meet its reinsurance obligations and is otherwise qualified to assume reinsurance from domestic insurers. An assuming insurer is deemed to meet this requirement if it maintains a surplus as regards policyholders in an amount that is not less than twenty million dollars ($20,000,000) and whose accreditation has not been denied by the commissioner within 90 days of its submission. An assuming insurer who is not deemed to meet this requirement shall obtain the affirmative approval of the commissioner. The approval of the commissioner shall be based upon a finding that the assuming insurer has adequate financial capacity to meet its reinsurance obligations and is otherwise qualified to assume reinsurance from domestic insurers. (2) The commissioner may deny or revoke an assuming insurer’s accreditation if the assuming insurer does not meet all of the standards required of an accredited reinsurer, or if its accreditation would be hazardous to the policyholders of this state. In determining whether to deny or revoke accreditation, the commissioner may consider the qualifications of the assuming insurer with respect to all the following subjects: (A) Its financial stability. (B) The lawfulness and quality of its investments. (C) The competency, character, and integrity of its management. (D) The competency, character, and integrity of persons who own or have a controlling interest in the assuming insurer. (E) Whether claims under its contracts are promptly and fairly adjusted and are promptly and fully paid in accordance with the law and the terms of the contracts. (3) Credit shall not be allowed a domestic ceding insurer if the assuming insurer’s accreditation has been revoked by the commissioner after notice and hearing. (c) Credit shall be allowed when the reinsurance is ceded to an assuming insurer that has been certified by the commissioner pursuant to Section 922.41. (d) (1) Credit shall be allowed when the reinsurance is ceded to an assuming insurer that maintains a trust fund in a qualified United States financial institution as defined in subdivision (b) of Section 922.7 for the payment of the valid claims of its United States ceding insurers, their assigns, and successors in interest. To enable the commissioner to determine the sufficiency of the trust fund the assuming insurer shall report annually to the commissioner information substantially the same as that required to be reported on the NAIC Annual Statement form by licensed insurers or any other form required by the NAIC. (2) Credit for reinsurance shall not be granted under this subdivision unless the form of the trust and any amendments to the trust have been approved by either: (A) The commissioner of the state where the trust is domiciled. (B) The commissioner of another state who, pursuant to the terms of the trust instrument, has accepted principal regulatory oversight of the trust. The trust and any trust amendments shall also be filed with the commissioner of every state in which the ceding insurer beneficiaries of the trust are domiciled. Notwithstanding the foregoing, nothing in this paragraph shall prevent the commissioner from disapproving the form of the trust if it is not in compliance with this state’s laws and regulations. (3) Credit for reinsurance shall not be granted under this subdivision unless the following requirements are met: (A) The trust instrument shall provide that contested claims shall be valid, enforceable, and payable out of funds in trust to the extent remaining unsatisfied 30 days after entry of the final order of any court of competent jurisdiction in the United States. (B) The trust shall vest legal title to its assets in the trustees of the trust for the benefit of the grantor’s United States ceding insurers, their assigns, and successors in interest. (C) The trust and the assuming insurer shall be subject to examination as determined by the commissioner. (D) The trust shall remain in effect for as long as the assuming insurer, or any member or former member of a group of insurers, shall have outstanding obligations due under the reinsurance agreements subject to the trust. (E) No later than February 28 of each year, the trustees of the trust shall report to the commissioner in writing setting forth the balance of the trust and listing the trust’s investments at the preceding yearend and shall certify the date of termination of the trust, if so planned, or certify that the trust shall not expire within the next 18 months. (F) The assuming insurer shall do both of the following: (i) Submit to the jurisdiction of any court of competent jurisdiction in any state of the United States, comply with all requirements necessary to give the court jurisdiction, and abide by the final decision of the court or of any appellate court in the event of an appeal. (ii) Designate the commissioner or an attorney in this state as its true and lawful agent upon whom may be served any lawful process in any action, suit, or proceeding instituted by or on behalf of the ceding insurer. This subparagraph is not intended to conflict with or override the obligation of the parties to a reinsurance agreement to arbitrate their disputes, if this obligation is created in the agreement. (G) The assuming insurer shall agree in the trust agreement that notwithstanding any other provision in the trust instrument, if the trust fund is inadequate because it contains an amount less than the amount required by paragraph (4), or if the grantor of the trust has been declared insolvent or placed into receivership, rehabilitation, liquidation, or similar proceedings under the laws of its state or country of domicile: (i) The trustee shall comply with an order of the commissioner with regulatory oversight over the trust or with an order of a court of competent jurisdiction directing the trustee to transfer to the commissioner with regulatory oversight all of the assets of the trust fund. (ii) The assets shall be distributed by, and insurance claims shall be filed with and valued by, the commissioner with regulatory oversight in accordance with the laws of the state in which the trust is domiciled that are applicable to the liquidation of domestic insurance companies. (iii) If the commissioner with regulatory oversight determines that the assets of the trust fund or any part thereof are not necessary to satisfy the claims of the United States ceding insurers of the grantor of the trust, the assets or part thereof shall be returned by the commissioner with regulatory oversight to the trustee for distribution in accordance with the trust agreement. (iv) The grantor hereby waives any right otherwise available to it under United States law that is inconsistent with this provision. (4) The following requirements apply to the following categories of assuming insurer: (A) The trust fund for a single assuming insurer shall consist of funds in trust in an amount not less than the assuming insurer’s liabilities attributable to reinsurance ceded by United States domiciled ceding insurers, and, in addition, the assuming insurer shall maintain a trusteed surplus of not less than twenty million dollars ($20,000,000), except as provided in subparagraph (B), (C), or (D). (B) In the case of a group including incorporated and individual unincorporated underwriters: (i) For reinsurance ceded under reinsurance agreements with an inception, amendment, or renewal date on or after January 1, 1993, the trust shall consist of a trusteed account in an amount not less than the respective underwriters’ several liabilities attributable to business ceded by United States domiciled ceding insurers to any underwriter of the group. (ii) For reinsurance ceded under reinsurance agreements with an inception date on or before December 31, 1992, and not amended or renewed after that date, notwithstanding the other provisions of this article, the trust shall consist of a trusteed account in an amount not less than the respective underwriters’ several insurance and reinsurance liabilities attributable to business written in the United States. (iii) In addition to the trusts required in clauses (i) and (ii), the group shall maintain in trust a trusteed surplus of which one hundred million dollars ($100,000,000) shall be held jointly for the benefit of the United States domiciled ceding insurers of any member of the group for all years of account. (iv) The incorporated members of the group shall not be engaged in any business other than underwriting as a member of the group and shall be subject to the same level of regulation and solvency control by the group’s domiciliary regulator as are the unincorporated members. (v) The group shall, within 90 days after its financial statements are due to be filed with the group’s domiciliary regulator, provide to the commissioner an annual certification by the group’s domiciliary regulator of the solvency of each underwriter member; or, if a certification is unavailable, financial statements prepared by independent public accountants of each underwriter member of the group. (C) In the case of a group of incorporated insurers under common administration, the group shall meet all of the following requirements: (i) Have continuously transacted an insurance business outside the United States for at least three years immediately prior to making application for accreditation and be in good standing with its domiciliary regulator. (ii) Demonstrate that individual insurer members maintain standards and financial conditions reasonably comparable to admitted insurers. (iii) Maintain aggregate policyholders’ surplus of at least ten billion dollars ($10,000,000,000). (iv) Maintain a trust fund in an amount not less than the group’s several liabilities attributable to business ceded by United States domiciled ceding insurers to any member of the group pursuant to reinsurance contracts issued in the name of such group. (v) In addition, maintain a joint trusteed surplus of which one hundred million dollars ($100,000,000) shall be held jointly for the benefit of United States ceding insurers of any member of the group as additional security for these liabilities. The commissioner shall have the authority to require additional amounts to be held in the trust as a condition for initial or continued accreditation if the commissioner determines that these additional amounts are required for the protection of ceding insurers. (vi) Within 90 days after its financial statements are due to be filed with the group’s domiciliary regulator, make available to the commissioner an annual certification of each underwriter member’s solvency by the member’s domiciliary regulator, and financial statements for each underwriter member of the group prepared by its independent public accountant. (D) At any time after the assuming insurer has permanently discontinued underwriting new business secured by the trust for at least three full years, the commissioner may authorize a reduction in the required trusteed surplus, but only after a finding, based on an assessment of the risk, that the new required surplus level is adequate for the protection of United States ceding insurers, policyholders, and claimants in light of reasonably foreseeable adverse loss development. The risk assessment may involve an actuarial review, including an independent analysis of reserves and cashflows, and shall consider all material risk factors, including, when applicable, the lines of business involved, the stability of the incurred loss estimates, and the effect of the surplus requirements on the assuming insurer’s liquidity or solvency. The minimum required trusteed surplus may not be reduced to an amount less than 50 percent of the assuming insurer’s liabilities attributable to reinsurance ceded by United States ceding insurers covered by the trust, unless the commissioner expressly finds that appropriate circumstances justify a lower level of minimum required trusteed surplus, provided the minimum required trusteed surplus may not be reduced to an amount less than 30 percent of the assuming insurer’s liabilities attributable to reinsurance ceded by United States ceding insurers covered by the trust. (e) Credit shall be allowed when the reinsurance is ceded to an assuming insurer that has its head office or is domiciled in and is licensed in a reciprocal jurisdiction, as determined by the commissioner pursuant to Section 922.425. (f) Credit shall be allowed when the reinsurance ceded to an assuming insurer not meeting the requirements of subdivision (a), (b), (c), (d), or (e) but only as to the insurance of risks located in jurisdictions where the reinsurance is required by applicable law or regulation of that jurisdiction. As used in this section, “jurisdiction” means state, district, or territory of the United States and any lawful national government. (Amended by Stats. 2020, Ch. 71, Sec. 1. (AB 2049) Effective January 1, 2021.)
  151. 922.41.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. )

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    This section lets a domestic insurer take reinsurance credit only when the assuming insurer is certified by the commissioner and meets the section’s security and qualification rules.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. ) ## 922.41. (a) Credit shall be allowed a domestic insurer when the reinsurance is ceded to an assuming insurer that has been certified by the commissioner as a reinsurer in this state and secures its obligations in accordance with this section. Credit shall be allowed at all times for which statutory financial statement credit for reinsurance is claimed under this section. The credit allowed shall be based upon the security held by or on behalf of the ceding insurer in accordance with a rating assigned to the certified reinsurer by the commissioner. The security shall be in a form consistent with this section, any regulations promulgated by the commissioner, and Section 922.5. (b) In order to be eligible for certification, the assuming insurer shall meet the following requirements: (1) The assuming insurer shall be domiciled and licensed to transact insurance or reinsurance in a qualified jurisdiction, as determined by the commissioner pursuant to subdivisions (f) and (g). (2) The assuming insurer shall maintain minimum capital and surplus, or its equivalent, in an amount to be determined by the commissioner, but no less than two hundred fifty million dollars ($250,000,000) calculated in accordance with paragraph (4) of subdivision (f) of this section or Section 922.5. This requirement may also be satisfied by an association including incorporated and individual unincorporated underwriters having minimum capital and surplus equivalents (net of liabilities) of at least two hundred fifty million dollars ($250,000,000) and a central fund containing a balance of at least two hundred fifty million dollars ($250,000,000). (3) The assuming insurer shall maintain financial strength ratings from two or more rating agencies deemed acceptable by the commissioner. These ratings shall be based on interactive communication between the rating agency and the assuming insurer and shall not be based solely on publicly available information. These financial strength ratings will be one factor used by the commissioner in determining the rating that is assigned to the assuming insurer. Acceptable rating agencies include the following: (A) Standard & Poor’s. (B) Moody’s Investors Service. (C) Fitch Ratings. (D) A.M. Best Company. (E) Any other nationally recognized statistical rating organization. (4) The assuming insurer shall agree to submit to the jurisdiction of this state, appoint the commissioner or a designated attorney in this state as its agent for service of process in this state, and agree to provide security for 100 percent of the assuming insurer’s liabilities attributable to reinsurance ceded by United States ceding insurers if it resists enforcement of a final United States judgment. (5) The assuming insurer shall agree to meet applicable information filing requirements as determined by the commissioner, both with respect to an initial application for certification and on an ongoing basis. (6) The certified reinsurer shall comply with any other requirements deemed relevant by the commissioner. (c) (1) If an applicant for certification has been certified as a reinsurer in a National Association of Insurance Commissioners (NAIC) accredited jurisdiction, the commissioner may defer to that jurisdiction’s certification, and has the discretion to defer to the rating assigned by that jurisdiction if the assuming insurer submits a properly executed Form CR-1, as published on the department’s internet website, and additional information as the commissioner requires. The commissioner, however, may perform an independent review and determination of an applicant. The assuming insurer shall then be considered to be a certified reinsurer in this state. (2) If the commissioner defers to a certification determination by another state, a change in the certified reinsurer’s status or rating in the other jurisdiction shall apply automatically in this state as of the date it takes effect in the other jurisdiction unless the commissioner otherwise determines. The certified reinsurer shall notify the commissioner of a change in its status or rating within 10 days after receiving notice of the change. (3) The commissioner may withdraw recognition of the other jurisdiction’s rating at any time and assign a new rating in accordance with subdivision (h). (4) The commissioner may withdraw recognition of the other jurisdiction’s certification at any time, with written notice to the certified reinsurer. Unless the commissioner suspends or revokes the certified reinsurer’s certification in accordance with this section and Section 922.42, the certified reinsurer’s certification shall remain in good standing in this state for a period of three months, which shall be extended if additional time is necessary to consider the assuming insurer’s application for certification in this state. (d) An association, including incorporated and individual unincorporated underwriters, may be a certified reinsurer. In order to be eligible for certification, in addition to satisfying requirements of subdivision (b), the reinsurer shall meet all of the following requirements: (1) The association shall satisfy its minimum capital and surplus requirements through the capital and surplus equivalents (net of liabilities) of the association and its members, which shall include a joint central fund that may be applied to an unsatisfied obligation of the association or any of its members, in an amount determined by the commissioner to provide adequate protection. (2) The incorporated members of the association shall not be engaged in any business other than underwriting as a member of the association and shall be subject to the same level of regulation and solvency control by the association’s domiciliary regulator as are the unincorporated members. (3) Within 90 days after its financial statements are due to be filed with the association’s domiciliary regulator, the association shall provide to the commissioner an annual certification by the association’s domiciliary regulator of the solvency of each underwriter member or, if a certification is unavailable, financial statements, prepared by independent public accountants, of each underwriter member of the association. (e) (1) The commissioner shall post notice on the department’s internet website promptly upon receipt of an application for certification, including instructions on how members of the public may respond to the application. The commissioner shall not take final action on the application until at least 30 days after posting the notice required by this subdivision. (2) The commissioner shall issue written notice to an assuming insurer that has made application and has been approved as a certified reinsurer. Included in that notice shall be the rating assigned the certified reinsurer in accordance with subdivision (h). The commissioner shall publish a list of all certified reinsurers and their ratings. (f) The certified reinsurer shall agree to meet applicable information filing requirements as determined by the commissioner, both with respect to an initial application for certification and on an ongoing basis. All information submitted by certified reinsurers that is not otherwise public information subject to disclosure shall be exempted from disclosure under Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code, and shall be withheld from public disclosure. The applicable information filing requirements are as follows: (1) Notification within 10 days of a regulatory action taken against the certified reinsurer, a change in the provisions of its domiciliary license, or a change in rating by an approved rating agency, including a statement describing those changes and the reasons for those changes. (2) Annually, Form CR-F or CR-S, as applicable pursuant to the instructions published on the department’s internet website. (3) Annually, the report of the independent auditor on the financial statements of the insurance enterprise, on the basis described in paragraph (4). (4) Annually, the most recent audited financial statements, regulatory filings, and actuarial opinion as filed with certified reinsurer’s supervisor and with a translation into English. Upon the initial certification, audited financial statements for the last two years filed with the certified reinsurer’s supervisor. (5) At least annually, an updated list of all disputed and overdue reinsurance claims regarding reinsurance assumed from United States domestic ceding insurers. (6) A certification from the certified reinsurer’s domestic regulator that the certified reinsurer is in good standing and maintains capital in excess of the jurisdiction’s highest regulatory action level. (7) Any other information that the commissioner may reasonably require. (g) If the commissioner certifies a non-United States domiciled insurer, the commissioner shall create and publish a list of qualified jurisdictions, under which an assuming insurer licensed and domiciled in that jurisdiction is eligible to be considered for certification by the commissioner as a certified reinsurer. (1) In order to determine whether the domiciliary jurisdiction of a non-United States assuming insurer is eligible to be recognized as a qualified jurisdiction, the commissioner shall evaluate the appropriateness and effectiveness of the reinsurance supervisory system of the jurisdiction, both initially and on an ongoing basis, and consider the rights, benefits, and the extent of reciprocal recognition afforded by the non-United States jurisdiction to reinsurers licensed and domiciled in the United States. The commissioner shall determine the appropriate process for evaluating the qualifications of those jurisdictions. Before its listing, a qualified jurisdiction shall agree in writing to share information and cooperate with the commissioner with respect to all certified reinsurers domiciled within that jurisdiction. A jurisdiction may not be recognized as a qualified jurisdiction if the commissioner has determined that the jurisdiction does not adequately and promptly enforce final United States judgments and arbitration awards. Additional factors may be considered in the discretion of the commissioner, including, but not limited to, the following: (A) The framework under which the assuming insurer is regulated. (B) The structure and authority of the domiciliary regulator with regard to solvency regulation requirements and financial surveillance. (C) The substance of financial and operating standards for assuming insurers in the domiciliary jurisdiction. (D) The form and substance of financial reports required to be filed or made publicly available by reinsurers in the domiciliary jurisdiction and the accounting principles used. (E) The domiciliary regulator’s willingness to cooperate with United States regulators in general and the commissioner in particular. (F) The history of performance by assuming insurers in the domiciliary jurisdiction. (G) Any documented evidence of substantial problems with the enforcement of final United States judgments in the domiciliary jurisdiction. (H) Any relevant international standards or guidance with respect to mutual recognition of reinsurance supervision adopted by the International Association of Insurance Supervisors or a successor organization. (I) Any other matters deemed relevant by the commissioner. (2) The commissioner shall consider the list of qualified jurisdictions published through the NAIC committee process in determining qualified jurisdictions. The commissioner may include on the list published pursuant to this section any jurisdiction on the NAIC list of qualified jurisdictions or on any equivalent list of the United States Treasury. (3) If the commissioner approves a jurisdiction as qualified that does not appear on either the NAIC list of qualified jurisdictions, or the United States Treasury list, the commissioner shall provide thoroughly documented justification in accordance with criteria to be developed under this section. (4) United States jurisdictions that meet the requirements for accreditation under the NAIC financial standards and accreditation program shall be recognized as qualified jurisdictions. (5) If a certified reinsurer’s domiciliary jurisdiction ceases to be a qualified jurisdiction, the commissioner has the discretion to suspend the reinsurer’s certification indefinitely, in lieu of revocation. (h) The commissioner shall assign a rating to each certified reinsurer, giving due consideration to the financial strength ratings that have been assigned by rating agencies deemed acceptable to the commissioner pursuant to this section. The commissioner shall publish a list of all certified reinsurers and their ratings. (1) Each certified reinsurer shall be rated on a legal entity basis, with due consideration being given to the group rating where appropriate, except that an association including incorporated and individual unincorporated underwriters that has been approved to do business as a single certified reinsurer may be evaluated on the basis of its group rating. Factors that may be considered as part of the evaluation process include, but are not limited to, the following: (A) The certified reinsurer’s financial strength rating from an acceptable rating agency. The maximum rating that a certified reinsurer may be assigned shall correspond to its financial strength rating as set forth in clauses (i) to (vi), inclusive. The commissioner shall use the lowest financial strength rating received from an approved rating agency in establishing the maximum rating of a certified reinsurer. A failure to obtain or maintain at least two financial strength ratings from acceptable rating agencies shall result in loss of eligibility for certification. (i) Ratings category “Secure - 1” corresponds to A.M. Best Company rating A++; Standard & Poor’s rating AAA; Moody’s Investors Service rating Aaa; and Fitch Ratings rating AAA. (ii) Ratings category “Secure - 2” corresponds to A.M. Best Company rating A+; Standard & Poor’s rating AA+, AA, or AA-; Moody’s Investors Service rating Aa1, Aa2, or Aa3; and Fitch Ratings rating AA+, AA, or AA-. (iii) Ratings category “Secure - 3” corresponds to A.M. Best Company rating A; Standard & Poor’s rating A+ or A; Moody’s Investors Service rating A1 or A2; and Fitch Ratings rating A+ or A. (iv) Ratings category “Secure - 4” corresponds to A.M. Best Company rating A-; Standard & Poor’s rating A-; Moody’s Investors Service rating A3; and Fitch Ratings rating A-. (v) Ratings category “Secure - 5” corresponds to A.M. Best Company rating B++ or B+; Standard & Poor’s rating BBB+, BBB, or BBB-; Moody’s Investors Service rating Baa1, Baa2, or Baa3; and Fitch Ratings rating BBB+, BBB, or BBB-. (vi) Ratings category “Vulnerable - 6” corresponds to A.M. Best Company rating B, B-, C++, C+, C, C-, D, E, or F; Standard & Poor’s rating BB+, BB, BB-, B+, B, B-, CCC, CC, C, D, or R; Moody’s Investors Service rating Ba1, Ba2, Ba3, B1, B2, B3, Caa, Ca, or C; and Fitch Ratings rating BB+, BB, BB-, B+, B, B-, CCC+, CC, CCC-, or DD. (B) The business practices of the certified reinsurer in dealing with its ceding insurers, including its record of compliance with reinsurance contractual terms and obligations. (C) For certified reinsurers domiciled in the United States, a review of the most recent applicable NAIC Annual Statement Blank, either Schedule F (for property/casualty reinsurers) or Schedule S (for life and health reinsurers). (D) For certified reinsurers not domiciled in the United States, a review annually of Form CR-F (for property/casualty reinsurers) or Form CR-S (for life and health reinsurers) (as published on the department’s internet website). (E) The reputation of the certified reinsurer for prompt payment of claims under reinsurance agreements, based on an analysis of ceding insurers’ Schedule F reporting of overdue reinsurance recoverables, including the proportion of obligations that are more than 90 days past due or are in dispute, with specific attention given to obligations payable to companies that are in administrative supervision or receivership. (F) Regulatory actions against the certified reinsurer. (G) The report of the independent auditor on the financial statements of the insurance enterprise, on the basis described in subparagraph (H). (H) For certified reinsurers not domiciled in the United States, audited financial statements, regulatory filings, and actuarial opinion as filed with the non-United States jurisdiction supervisor and with a translation into English. Upon the initial application for certification, the commissioner shall consider audited financial statements for the last two years filed with its non-United States jurisdiction supervisor. (I) The liquidation priority of obligations to a ceding insurer in the certified reinsurer’s domiciliary jurisdiction in the context of an insolvency proceeding. (J) A certified reinsurer’s participation in a solvent scheme of arrangement, or similar procedure, that involves United States ceding insurers. The commissioner shall receive prior notice from a certified reinsurer that proposes participation by the certified reinsurer in a solvent scheme of arrangement. (K) Any other information deemed relevant by the commissioner. (2) Based on the analysis conducted under subparagraph (E) of paragraph (1) of a certified reinsurer’s reputation for prompt payment of claims, the commissioner may make appropriate adjustments in the security the certified reinsurer is required to post to protect its liabilities to United States ceding insurers, provided that the commissioner shall, at a minimum, increase the security the certified reinsurer is required to post by one rating level under regulations promulgated by the commissioner, if the commissioner finds either of the following: (A) More than 15 percent of the certified reinsurer’s ceding insurance clients have overdue reinsurance recoverables on paid losses of 90 days or more that are not in dispute and that exceed one hundred thousand dollars ($100,000) for each ceding insurer. (B) The aggregate amount of reinsurance recoverables on paid losses that are not in dispute and that are overdue by 90 days or more exceeds fifty million dollars ($50,000,000). (3) The assuming insurer shall submit a properly executed Form CR-1, as published on the department’s internet website, as evidence of its submission to the jurisdiction of this state, appointment of the commissioner as an agent for service of process in this state, and agreement to provide security for 100 percent of the assuming insurer’s liabilities attributable to reinsurance ceded by United States ceding insurers if it resists enforcement of a final United States judgment. The commissioner shall not certify an assuming insurer that is domiciled in a jurisdiction that the commissioner has determined does not adequately and promptly enforce final United States judgments or arbitration awards. (4) (A) In the case of a downgrade by a rating agency or other disqualifying circumstance, the commissioner shall, upon written notice, assign a new rating to the certified reinsurer in accordance with the requirements of this subdivision. (B) The commissioner shall have the authority to suspend, revoke, or otherwise modify a certified reinsurer’s certification at any time if the certified reinsurer fails to meet its obligations or security requirements under this section, or if other financial or operating results of the certified reinsurer, or documented significant delays in payment by the certified reinsurer, lead the commissioner to reconsider the certified reinsurer’s ability or willingness to meet its contractual obligations. (C) If the rating of a certified reinsurer is upgraded by the commissioner, the certified reinsurer may meet the security requirements applicable to its new rating on a prospective basis, but the commissioner shall require the certified reinsurer to post security under the previously applicable security requirements as to all contracts in force on or before the effective date of the upgraded rating. If the rating of a certified reinsurer is downgraded by the commissioner, the commissioner shall require the certified reinsurer to meet the security requirements applicable to its new rating for all business it has assumed as a certified reinsurer. (D) Upon revocation of the certification of a certified reinsurer by the commissioner, the assuming insurer shall be required to post security in accordance with Section 922.5 in order for the ceding insurer to continue to take credit for reinsurance ceded to the assuming insurer. If funds continue to be held in trust in accordance with subdivision (d) of Section 922.4, the commissioner may allow additional credit equal to the ceding insurer’s pro rata share of those funds, discounted to reflect the risk of uncollectibility and anticipated expenses of trust administration. Notwithstanding the change of a certified reinsurer’s rating or revocation of its certification, a domestic insurer that has ceded reinsurance to that certified reinsurer shall not be denied credit for reinsurance for a period of three months for all reinsurance ceded to that certified reinsurer, unless the reinsurance is found by the commissioner to be at high risk of uncollectibility. (i) A certified reinsurer shall secure obligations assumed from United States ceding insurers under this subdivision at a level consistent with its rating. The amount of security required in order for full credit to be allowed shall correspond with the following requirements: Ratings security required Secure - 1: 0 percent Secure - 2: 10 percent Secure - 3: 20 percent Secure - 4: 50 percent Secure - 5: 75 percent Vulnerable - 6: 100 percent (1) In order for a domestic ceding insurer to qualify for full financial statement credit for reinsurance ceded to a certified reinsurer, the certified reinsurer shall maintain security in a form acceptable to the commissioner and consistent with Section 922.5, or in a multibeneficiary trust in accordance with subdivision (d) of Section 922.4, except as otherwise provided in this subdivision. In order for a domestic insurer to qualify for full financial statement credit, reinsurance contracts entered into or renewed under this section shall include a proper funding clause that requires the certified reinsurer to provide and maintain security in an amount sufficient to avoid the imposition of a financial statement penalty on the ceding insurer under this section for reinsurance ceded to the certified reinsurer. (2) If a certified reinsurer maintains a trust to fully secure its obligations subject to subdivision (d) of Section 922.4, and chooses to secure its obligations incurred as a certified reinsurer in the form of a multibeneficiary trust, the certified reinsurer shall maintain separate trust accounts for its obligations incurred under reinsurance agreements issued or renewed as a certified reinsurer with reduced security as permitted by this subdivision or comparable laws of other United States jurisdictions and for its obligations subject to subdivision (d) of Section 922.4. It shall be a condition to the grant of certification under this section that the certified reinsurer shall have bound itself, by the language of the trust and agreement with the commissioner with principal regulatory oversight of each of those trust accounts, to fund, upon termination of any of those trust accounts, out of the remaining surplus of those trusts any deficiency of any other of those trust accounts. (3) The minimum trusteed surplus requirements provided in subdivision (d) of Section 922.4 are not applicable with respect to a multibeneficiary trust maintained by a certified reinsurer for the purpose of securing obligations incurred under this subdivision, except that the trust shall maintain a minimum trusteed surplus of ten million dollars ($10,000,000). (4) With respect to obligations incurred by a certified reinsurer under this subdivision, if the security is insufficient, the commissioner shall reduce the allowable credit by an amount proportionate to the deficiency, and have the discretion to impose further reductions in allowable credit upon finding that there is a material risk that the certified reinsurer’s obligations will not be paid in full when due. (5) For purposes of this subdivision, a certified reinsurer whose certification has been terminated for any reason shall be treated as a certified reinsurer required to secure 100 percent of its obligations. (A) As used in this subdivision, the term “terminated” means revocation, suspension, voluntary surrender, and inactive status. (B) If the commissioner continues to assign a higher rating as permitted by other provisions of this section, this requirement shall not apply to a certified reinsurer in inactive status or to a reinsurer whose certification has been suspended. (6) The commissioner shall require the certified reinsurer to post 100-percent security in accordance with Section 922.5, for the benefit of the ceding insurer or its estate, upon the entry of an order of rehabilitation, liquidation, or conservation against the ceding insurer. (7) Affiliated reinsurance transactions shall receive the same opportunity for reduced security requirements as all other reinsurance transactions. (8) In order to facilitate the prompt payment of claims, a certified reinsurer shall not be required to post security for catastrophe recoverables for a period of one year from the date of the first instance of a liability reserve entry by the ceding company as a result of a loss from a catastrophic occurrence that is likely to result in significant insured losses, as recognized by the commissioner. The one-year deferral period is contingent upon the certified reinsurer continuing to pay claims in a timely manner, as determined by the commissioner, in writing. Reinsurance recoverables for only the following lines of business as reported on the NAIC annual financial statement related specifically to the catastrophic occurrence shall be included in the deferral: (A) Line 1: Fire. (B) Line 2: Allied lines. (C) Line 3: Farmowners’ multiple peril. (D) Line 4: Homeowners’ multiple peril. (E) Line 5: Commercial multiple peril. (F) Line 9: Inland marine. (G) Line 12: Earthquake. (H) Line 21: Auto physical damage. (9) Credit for reinsurance under this section shall apply only to reinsurance contracts entered into or renewed on or after the effective date of the certification of the assuming insurer. A reinsurance contract entered into before the effective date of the certification of the assuming insurer that is subsequently amended by mutual agreement of the parties to the reinsurance contract after the effective date of the certification of the assuming insurer, or a new reinsurance contract, covering a risk for which collateral was provided previously, shall only be subject to this section with respect to losses incurred and reserves reported from and after the effective date of the amendment or new contract. (10) This section shall not be construed to prohibit the parties to a reinsurance agreement from agreeing to provisions establishing security requirements that exceed the minimum security requirements established for certified reinsurers under this section. (j) A certified reinsurer that ceases to assume new business in this state may request to maintain its certification in inactive status in order to continue to qualify for a reduction in security for its in-force business. An inactive certified reinsurer shall continue to comply with all applicable requirements of this section, and the commissioner shall assign a rating that takes into account, if relevant, the reasons why the reinsurer is not assuming new business. (k) Notwithstanding this section, credit for reinsurance or deduction from liability by a domestic ceding insurer for cessions to a certified reinsurer may be disallowed upon a finding by the commissioner that the application of the literal provisions of this section does not accomplish its intent, or either the financial condition of the reinsurer or the collateral or other security provided by the reinsurer does not, in substance, satisfy the credit for reinsurance requirements in Section 922.4. (Amended by Stats. 2021, Ch. 615, Sec. 298. (AB 474) Effective January 1, 2022. Operative January 1, 2023, pursuant to Sec. 463 of Stats. 2021, Ch. 615.)
  152. 922.42.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. )

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    The commissioner may suspend or revoke a reinsurer’s accreditation or certification if it no longer meets the requirements, and must give notice and a hearing opportunity.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. ) ## 922.42. (a) If an accredited or certified reinsurer ceases to meet the requirements for accreditation or certification, the commissioner may suspend or revoke the reinsurer’s accreditation or certification. (b) The commissioner shall give the reinsurer notice and opportunity for hearing. The suspension or revocation shall not take effect until after the commissioner’s order on hearing, unless any of the following applies: (1) The reinsurer waives its right to hearing. (2) The commissioner’s order is based on regulatory action by the reinsurer’s domiciliary jurisdiction or the voluntary surrender or termination of the reinsurer’s eligibility to transact insurance or reinsurance business in its domiciliary jurisdiction or in the primary certifying state of the reinsurer under subdivision (b) of Section 922.41. (3) The commissioner finds that an emergency requires immediate action and a court of competent jurisdiction has not stayed the commissioner’s action. (c) While a reinsurer’s accreditation or certification is suspended, no reinsurance contract issued or renewed after the effective date of the suspension qualifies for credit except to the extent that the reinsurer’s obligations under the contract are secured in accordance with Section 922.5. If a reinsurer’s accreditation or certification is revoked, no credit for reinsurance may be granted after the effective date of the revocation except to the extent that the reinsurer’s obligations under the contract are secured in accordance with subdivision (i) of Section 922.41 or Section 922.5. (Added by Stats. 2012, Ch. 277, Sec. 6. (SB 1216) Effective January 1, 2013.)
  153. 922.425.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. )

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    A domestic insurer may take reinsurance credit only when the assuming insurer meets this section’s eligibility requirements, and the commissioner must maintain lists of reciprocal jurisdictions and eligible assuming 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. ) ## 922.425. (a) Credit shall be allowed a domestic insurer when the reinsurance is ceded to an assuming insurer that meets all of the following requirements: (1) The assuming insurer has its head office or is domiciled in, as applicable, and is licensed to transact reinsurance in, a reciprocal jurisdiction. A “reciprocal jurisdiction” is a jurisdiction, as designated by the commissioner pursuant to subdivision (b), that meets one of the following criteria: (A) A non-United States jurisdiction that is subject to an in-force covered agreement with the United States, each within its legal authority, or, in the case of a covered agreement between the United States and European Union, is a member state of the European Union. For purposes of this section, a “covered agreement” is an agreement entered into pursuant to Dodd-Frank Wall Street Reform and Consumer Protection Act (Sections 313 and 314 of Title 31 of the United States Code), that is currently in effect or in a period of provisional application and addresses the elimination, under specified conditions, of collateral requirements as a condition for entering into a reinsurance agreement with a ceding insurer domiciled in this state or for allowing the ceding insurer to recognize credit for reinsurance. (B) A United States jurisdiction that meets the requirements for accreditation under the NAIC financial standards and accreditation program. (C) A qualified jurisdiction, as determined by the commissioner pursuant to subdivision (g) of Section 922.41, that is not otherwise described in subparagraph (A) or (B) and that the commissioner determines meets all of the following additional requirements, consistent with the terms and conditions of in-force covered agreements: (i) Provides that an insurer that has its head office or is domiciled in a qualified jurisdiction shall receive credit for reinsurance ceded to a United States-domiciled assuming insurer in the same manner as credit for reinsurance is received for reinsurance assumed by insurers domiciled in that qualified jurisdiction. (ii) Does not require a United States-domiciled assuming insurer to establish or maintain a local presence as a condition for entering into a reinsurance agreement with a ceding insurer subject to regulation by the non-United States jurisdiction or as a condition to allow the ceding insurer to recognize credit for that reinsurance. (iii) Recognizes the United States’ regulatory approach to group supervision and group capital, by providing written confirmation by a competent regulatory authority, in the qualified jurisdiction, that insurers and insurance groups that are domiciled or maintain their headquarters in this state or another jurisdiction accredited by the National Association of Insurance Commissioners (NAIC) shall be subject only to worldwide prudential insurance group supervision, including worldwide group governance, solvency and capital, and reporting, as applicable, by the commissioner or the commissioner of the domiciliary state and shall not be subject to group supervision at the level of the worldwide parent undertaking of the insurance or reinsurance group by the qualified jurisdiction. (iv) Provides written confirmation by a competent regulatory authority in the qualified jurisdiction that information regarding insurers and their parent, subsidiary, or affiliated entities, if applicable, shall be provided to the commissioner in accordance with a memorandum of understanding or similar document between the commissioner and the qualified jurisdiction, including the International Association of Insurance Supervisors Multilateral Memorandum of Understanding or other multilateral memoranda of understanding coordinated by the NAIC. (2) The assuming insurer has and maintains, on an ongoing basis, minimum capital and surplus, or its equivalent, calculated on at least an annual basis as of the preceding December 31 or at the annual date otherwise statutorily reported to the reciprocal jurisdiction, and confirmed as set forth in paragraph (7) according to the methodology of its domiciliary jurisdiction, in either of the following amounts: (A) No less than two hundred fifty million dollars ($250,000,000). (B) If the assuming insurer is an association, including incorporated and individual unincorporated underwriters it must have and maintain, both of the following on an ongoing basis: (i) Minimum capital and surplus equivalents (net of liabilities) or own funds of the equivalent of at least two hundred fifty million dollars ($250,000,000), calculated according to the methodology applicable in its domiciliary jurisdiction. (ii) A central fund containing a balance of the equivalent of at least two hundred fifty million dollars ($250,000,000). (3) The assuming insurer has and maintains, on an ongoing basis, a minimum solvency or capital ratio, as applicable, as follows: (A) If the assuming insurer has its head office or is domiciled in a reciprocal jurisdiction as defined in subparagraph (A) of paragraph (1), the ratio specified in the applicable covered agreement. (B) If the assuming insurer is domiciled in a reciprocal jurisdiction as defined in subparagraph (B) of paragraph (1), a risk-based capital (RBC) ratio of 300 percent of the authorized control level, calculated in accordance with the formula developed by the NAIC. (C) If the assuming insurer is domiciled in a reciprocal jurisdiction as defined in subparagraph (C) of paragraph (1), after consultation with the reciprocal jurisdiction and considering any recommendations published through the NAIC Committee Process, the solvency or capital ratio that the commissioner determines to be an effective measure of solvency. (D) If the assuming insurer is an association, including incorporated and individual unincorporated underwriters, it shall have and maintain, on an ongoing basis, a minimum solvency or capital ratio in the reciprocal jurisdiction where the assuming insurer has its head office or is domiciled, as applicable, and is also licensed. (4) The assuming insurer agrees to and provides adequate assurance to the commissioner, in the form of a properly executed Form RJ-1, as published on the department’s internet website, of its agreement to all of the following: (A) The assuming insurer shall provide prompt written notice and explanation to the commissioner if it falls below the minimum requirements set forth in paragraph (2) or (3) or if any regulatory action is taken against it for serious noncompliance with applicable law. (B) The assuming insurer shall consent, in writing, to the jurisdiction of the courts of this state and to the appointment of the commissioner as agent for service of process. The commissioner may require that consent for service of process be provided to the commissioner and included in each reinsurance agreement. This subparagraph does not limit, or in any way alter, the capacity of parties to a reinsurance agreement to agree to alternative dispute resolution mechanisms, except to the extent those agreements are unenforceable under applicable insolvency or delinquency laws. (C) The assuming insurer shall consent, in writing, to pay all final judgments, wherever enforcement is sought, obtained by a ceding insurer or its legal successor, that have been declared enforceable in the jurisdiction where the judgment was obtained. (D) Each reinsurance agreement shall include a provision requiring the assuming insurer to provide security in an amount equal to 100 percent of the assuming insurer’s liabilities attributable to reinsurance ceded pursuant to that agreement if the assuming insurer resists enforcement of a final judgment that is enforceable under the law of the jurisdiction in which it was obtained or a properly enforceable arbitration award, whether obtained by the ceding insurer or by its legal successor on behalf of its resolution estate. (E) The assuming insurer shall confirm that it is not presently participating in any solvent scheme of arrangement which involves this state’s ceding insurers, and shall agree to notify the ceding insurer and the commissioner and to provide security in an amount equal to 100 percent of the assuming insurer’s liabilities to the ceding insurer, consistent with the terms of the scheme, if the assuming insurer enters into such a solvent scheme of arrangement. Security shall be in a form consistent with the provisions of paragraph (1) of subdivision (i) of Section 922.41 and Section 922.5 and as specified by regulation. For purposes of this section, “solvent scheme of arrangement” means a foreign or alien statutory or regulatory compromise procedure subject to requisite majority creditor approval and judicial sanction in the assuming insurer’s home jurisdiction either to finally commute liabilities of duly noticed classed members or creditors of a solvent debtor, or to reorganize or restructure the debts and obligations of a solvent debtor on a final basis, and that may be subject to judicial recognition and enforcement of the arrangement by a governing authority outside the ceding insurer’s home jurisdiction. (F) The assuming insurer shall agree, in writing, to meet the applicable information filing requirements as set forth in paragraph (5). (5) The assuming insurer or its legal successor shall provide, if requested by the commissioner, on behalf of itself and any legal predecessors, the following documentation to the commissioner: (A) For the two years preceding entry into the reinsurance agreement, and on an annual basis thereafter, the assuming insurer’s annual audited financial statements, in accordance with the applicable law of the jurisdiction of its head office or domiciliary jurisdiction, as applicable, including the external audit report. (B) For the two years preceding entry into the reinsurance agreement, the solvency and financial condition report or actuarial opinion, if filed with the assuming insurer’s supervisor. (C) Before entry into the reinsurance agreement, and not more than semiannually thereafter, an updated list of all disputed and overdue reinsurance claims outstanding for 90 days or more, regarding reinsurance assumed from ceding insurers domiciled in the United States. (D) Before entry into the reinsurance agreement, and not more than semiannually thereafter, information regarding the assuming insurer’s assumed reinsurance by ceding insurer, ceded reinsurance by the assuming insurer, and reinsurance recoverable on paid and unpaid losses by the assuming insurer to allow for the evaluation of the criteria set forth in paragraph (6). (6) The assuming insurer shall maintain a practice of prompt payment of claims under reinsurance agreements. The lack of prompt payment will be evidenced if one of the following criteria is met: (A) More than 15 percent of the reinsurance recoverables from the assuming insurer are overdue and in dispute as reported to the commissioner. (B) More than 15 percent of the assuming insurer’s ceding insurers or reinsurers have overdue reinsurance recoverable on paid losses of 90 days or more that are not in dispute and that exceed one hundred thousand dollars ($100,000) for each ceding insurer, or as otherwise specified in a covered agreement. (C) The aggregate amount of reinsurance recoverable on paid losses which are not in dispute, but are overdue by 90 days or more, exceeds fifty million dollars ($50,000,000), or as otherwise specified in a covered agreement. (7) The assuming insurer’s supervisory authority shall confirm to the commissioner on an annual basis, as of the preceding December 31 or at the annual date otherwise statutorily reported to the reciprocal jurisdiction, that the assuming insurer complies with the requirements set forth in paragraphs (2) and (3). (8) This subdivision does not preclude an assuming insurer from providing the commissioner with information on a voluntary basis. (b) The commissioner shall timely create and publish a list of reciprocal jurisdictions. (1) A list of reciprocal jurisdictions is published through the NAIC Committee Process. The commissioner’s list shall include any reciprocal jurisdiction as defined under subparagraphs (A) and (B) of paragraph (1) of subdivision (a), and shall consider any other reciprocal jurisdiction included on the NAIC list. The commissioner may approve a jurisdiction that does not appear on the NAIC list of reciprocal jurisdictions as provided by applicable law or regulation, or in accordance with criteria published through the NAIC Committee Process. (2) The commissioner may remove a jurisdiction from the list of reciprocal jurisdictions upon a determination that the jurisdiction no longer meets one or more of the requirements of a reciprocal jurisdiction, as provided by applicable law, a process set forth in regulations issued by the commissioner, or in accordance with criteria published through the NAIC Committee Process, except that the commissioner shall not remove from the list a reciprocal jurisdiction as defined under subparagraphs (A) and (B) of paragraph (1) of subdivision (a). Upon removal of a reciprocal jurisdiction from this list, credit for reinsurance ceded to an assuming insurer that has its home office or is domiciled in that jurisdiction shall be allowed, if otherwise allowed pursuant Section 922.4, 922.41, or 922.5. (c) The commissioner shall timely create and publish a list of assuming insurers that have satisfied the conditions set forth in this section and to which cessions shall be granted credit in accordance with this section. The commissioner may add an assuming insurer to the list if a NAIC accredited jurisdiction has added the assuming insurer to a list of assuming insurers or if, upon initial eligibility, the assuming insurer submits the information to the commissioner as required under paragraph (4) of subdivision (a) and complies with any additional requirements that the commissioner may impose by regulation, except to the extent that they conflict with an applicable covered agreement. (1) If a NAIC accredited jurisdiction has determined that the conditions set forth in subdivision (a) have been met, the commissioner has the discretion to defer to that jurisdiction’s determination, and add an assuming insurer to the list of assuming insurers to which cessions shall be granted credit. The commissioner may accept financial documentation filed with another NAIC accredited jurisdiction or with the NAIC in satisfaction of subdivision (a). (2) When requesting that the commissioner defer to another NAIC accredited jurisdiction’s determination, an assuming insurer shall submit a properly executed Form RJ-1, as published on the department’s internet website, and additional information as the commissioner may require. Upon receiving the request, the commissioner shall notify other states through the NAIC Committee Process and provide relevant information with respect to the determination of eligibility. (d) If the commissioner determines that an assuming insurer no longer meets one or more of the requirements under this section, the commissioner may revoke or suspend the eligibility of the assuming insurer for recognition. (1) While an assuming insurer’s eligibility is suspended, a reinsurance agreement issued, amended, or renewed after the effective date of the suspension shall not qualify for credit except to the extent that the assuming insurer’s obligations under the contract are secured in accordance with Section 922.5. (2) If an assuming insurer’s eligibility is revoked, credit for reinsurance shall not be granted after the effective date of the revocation with respect to any reinsurance agreements entered into by the assuming insurer, including reinsurance agreements entered into before the date of revocation, except to the extent that the assuming insurer’s obligations under the contract are secured in a form acceptable to the commissioner and consistent with the provisions of Section 922.5. (e) Before denying statement credit, imposing a requirement to post security with respect to subdivision (d), or adopting a similar requirement that will have substantially the same regulatory impact as security, the commissioner shall do all of the following: (1) Communicate with the ceding insurer, the assuming insurer, and the assuming insurer’s supervisory authority that the assuming insurer no longer satisfies one of the conditions listed in subdivision (a). (2) Provide the assuming insurer with 30 days from the initial communication to submit a plan to remedy the defect, and 90 days from the initial communication to remedy the defect, except in exceptional circumstances in which a shorter period is necessary for policyholder and other consumer protection. (3) After the expiration of 90 days or less, as set forth in paragraph (2), if the commissioner determines that no or insufficient action was taken by the assuming insurer, the commissioner may impose any of the requirements of this subdivision. (4) Provide a written explanation to the assuming insurer of any of the requirements set out in this subdivision. (f) If subject to a legal process of rehabilitation, liquidation, or conservation, as applicable, the ceding insurer, or its representative, may seek and, if determined appropriate by the court in which the proceedings are pending, may obtain an order requiring that the assuming insurer post security for all outstanding ceded liabilities. (g) This section does not limit or alter the capacity of parties to a reinsurance agreement to agree on requirements for security or other terms in that reinsurance agreement, except as expressly prohibited by Sections 922.1 to 922.9, inclusive, or other applicable law or regulation. (h) Credit may be taken under this section only for reinsurance agreements entered into, amended, or renewed on or after January 1, 2021, and only with respect to losses incurred and reserves reported on or after the later of the date on which the assuming insurer has met all eligibility requirements pursuant to subdivision (a) and the effective date of the new reinsurance agreement, amendment, or renewal. (1) This subdivision does not alter or impair a ceding insurer’s right to take credit for reinsurance, to the extent that credit is not available under this section, as long as the reinsurance qualifies for credit under Sections 922.1 to 922.9, inclusive. (2) This section does not authorize an assuming insurer to withdraw or reduce the security provided under a reinsurance agreement, except as permitted by the terms of the agreement. (3) This section does not limit or alter the capacity of parties to a reinsurance agreement to renegotiate the agreement. (Amended by Stats. 2023, Ch. 204, Sec. 2. (AB 1140) Effective January 1, 2024.)
  154. 922.43.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. )

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    The requesting reinsurer must pay the department’s actual review costs, and the commissioner may deny requests, refuse reinsurance credit, or revoke accreditation/certification if payment is not made promptly when due.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. ) ## 922.43. The actual costs and expenses incurred by the department in reviewing requests for accreditation or certification, trusts, or review of an assuming insurer that has its head office or is domiciled in and is licensed in a reciprocal jurisdiction, as determined by the commissioner pursuant to Section 922.425, and subsequent amendments established or maintained pursuant to Sections 922.1 to 922.7, inclusive, and subsequent reviews, shall be charged to and collected from the requesting reinsurer. If the reinsurer fails to pay the actual costs and expenses promptly when due, then the commissioner may deny the requests, may refuse to allow credit for reinsurance ceded to that reinsurer or group, or may revoke the reinsurer’s accreditation or certification. (Amended by Stats. 2020, Ch. 71, Sec. 4. (AB 2049) Effective January 1, 2021.)
  155. 922.5.

    ## 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. )

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    This section allows a domestic insurer to count certain reinsurance assets or deductions only up to the related liabilities and only when supported by specified security.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. ) ## 922.5. (a) An asset or a deduction from liability for reinsurance ceded by a domestic insurer to an assuming insurer not meeting the requirements of Section 922.4 shall be allowed in an amount not exceeding the liabilities carried by the ceding insurer to the extent of either of the following: (1) The asset or deduction is not greater than the amount of funds held by the ceding insurer under a reinsurance contract with that assuming insurer as security for the payment of obligations thereunder and those funds are held in the United States under the exclusive control of the ceding insurer. (2) The asset or deduction is not greater than the amount of funds held in a trust, satisfactory to the commissioner, on behalf of the ceding insurer under a reinsurance contract with the assuming insurer as security for the payment of obligations thereunder and is held in a qualified United States financial institution, as defined in subdivision (b) of Section 922.7, subject to withdrawal solely by the ceding insurer. The security under this subdivision may be in the form of cash or securities authorized as general investments under Article 3 (commencing with Section 1170) of Chapter 2, or securities listed by the Securities Valuation Office of the NAIC, including those deemed exempt from filing, as defined by the Purposes and Procedures Manual of the National Association of Insurance Commissioners Securities Valuation Office, qualifying as admitted assets under this code and with liquidity meeting the requirements of Section 706.5, and not otherwise disallowed in the commissioner’s discretion. (b) An asset or a deduction from liability for reinsurance ceded by a domestic insurer to an assuming insurer not meeting the requirements of Section 922.4 shall be allowed in an amount not exceeding the liabilities carried by the ceding insurer to the extent that security is provided in the form of letters of credit, satisfactory to the commissioner, which shall be: (1) Clean, irrevocable, unconditional letters of credit, issued or confirmed by qualified United States financial institutions, as defined in subdivision (a) of Section 922.7, effective no later than December 31st in respect of the year for which filing is being made, and in the possession of the ceding insurer on or before the filing date of its annual statement. (2) Letters of credit meeting applicable standards of issuer acceptability as of the dates of their issuance or confirmation and shall, notwithstanding the issuing or confirming institutions’ subsequent failure to meet applicable standards of issuer acceptability, continue to be acceptable as security until their expiration, extension, renewal, modification, or amendment, whichever first occurs. (c) For purposes of this section, the phrase “deemed exempt from filing as defined by the Purposes and Procedures Manual of the National Association of Insurance Commissioners Securities Valuation Office” shall mean all United States government securities, and all other securities or bonds with a rating of SVO 1 or FE 1 listed by the National Association of Insurance Commissioners Securities Valuation Office as exempt. (d) The commissioner may adopt, by regulation pursuant to subdivision (b) of Section 922.85, specific additional requirements relating to or setting forth the valuation of assets or reserve credits, the amount and forms of security supporting reinsurance arrangements described in paragraph (2) of subdivision (b) of Section 922.85, and the circumstances pursuant to which credit will be reduced or eliminated. (Amended by Stats. 2017, Ch. 202, Sec. 3. (AB 938) Effective September 1, 2017.)
  156. 922.6.

    ## 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. )

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    Credit for reinsurance cannot be denied to a foreign ceding insurer when the domestic state regulator recognizes that credit, if the domestic state is NAIC-accredited or has substantially similar solvency requirements.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. ) ## 922.6. Credit for reinsurance shall not be denied a foreign ceding insurer to the extent that credit is recognized by the ceding insurer’s domestic state regulator, provided that the domestic state is accredited by the National Association of Insurance Commissioners (NAIC), or the domestic state regulator has financial solvency requirements substantially similar to the requirements necessary for NAIC accreditation. (Repealed and added by Stats. 2012, Ch. 277, Sec. 10. (SB 1216) Effective January 1, 2013.)
  157. 922.7.

    ## 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. )

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    This section defines when an institution counts as a “qualified United States financial institution.”

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. ) ## 922.7. (a) For purposes of subdivision (b) of Section 922.5, a “qualified United States financial institution” means an institution that complies with all of the following: (1) Is organized or in the case of a United States office of a foreign banking organization, licensed, under the laws of the United States or any state thereof. (2) Is regulated, supervised, and examined by United States federal or state authorities having regulatory authority over banks and trust companies. (3) Has been determined by the commissioner, or, in the discretion of the commissioner, the Securities Valuation Office of the NAIC, to meet such standards of financial condition and standing as are considered necessary and appropriate to regulate the quality of financial institutions whose letters of credit will be acceptable to the commissioner. (b) A “qualified United States financial institution” means, for purposes of those provisions of this law specifying those institutions that are eligible to act as a fiduciary of a trust, an institution that is both: (1) Organized, or in the case of a United States branch or agency office of a foreign banking organization, licensed, under the laws of the United States or any state thereof and has been granted authority to operate with fiduciary powers. (2) Regulated, supervised, and examined by federal or state authorities having regulatory authority over banks and trust companies. (Repealed and added by Stats. 1996, Ch. 840, Sec. 14. Effective January 1, 1997.)
  158. 922.8.

    ## 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. )

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    The commissioner may issue a bulletin on reinsurance allowance rules, must notify the Legislature by January 1, 1998, and must adopt regulations by December 31, 2001 that replace the bulletin.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. ) ## 922.8. (a) The commissioner, after notice, comment period, and a hearing if requested by more than 10 affected insurers, may issue a bulletin setting forth reasonable requirements for the allowance of reinsurance as an asset or deduction from liability consistent with Sections 922.4 to 922.6, inclusive, including the following: (1) Filing requirements for an accredited assuming insurer. (2) Accreditation requirements for an assuming insurer with less than a twenty million dollar ($20,000,000) surplus as regards policyholders. (3) The definition of “liabilities” as used in Sections 922.4 and 922.5. (4) Investment guidelines for trust funds established and maintained pursuant to subdivision (d) of Section 922.4. (5) Definitions and required or permitted conditions for trust funds established and maintained pursuant to Section 922.5. (6) Requirements of letters of credit established and maintained pursuant to Section 922.5. (b) On or before January 1, 1998, the commissioner shall notify the Legislature that the bulletin has been promulgated so that the Legislature is able to ensure the commissioner’s compliance with the requirements of this subdivision. (c) The bulletin authorized by this section shall have the same force and effect, and may be enforced by the commissioner to the same extent and degree, as regulations issued by the commissioner until the time that the commissioner issues additional or amended regulations pursuant to subdivision (d). (d) The commissioner shall adopt regulations implementing the provisions of this law, that shall supersede the bulletin authorized by this section, no later than December 31, 2001. (Amended by Stats. 2012, Ch. 277, Sec. 11. (SB 1216) Effective January 1, 2013.)
  159. 922.85.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. )

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    The commissioner may adopt and update regulations for certain reinsurance matters, and may require ceding insurers to use the Valuation Manual when calculating required security.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. ) ## 922.85. (a) The commissioner may adopt regulations in accordance with the procedures 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 Sections 922.4, 922.41, 922.42, 922.425, 922.43, and 922.5, provided the commissioner may update subparagraph (A) of paragraph (1) of subdivision (h) and subdivision (i) of Section 922.41 to add other nationally recognized statistical rating agencies, or to modify the rating categories, the corresponding financial ratings, or the percentage of security required to conform to changes in these factors adopted by the National Association of Insurance Commissioners (NAIC). (b) (1) The commissioner may adopt regulations applicable to reinsurance arrangements described in paragraph (2). (2) A regulation adopted pursuant to this subdivision may apply only to reinsurance relating to the following: (A) Life insurance policies with guaranteed nonlevel gross premiums or guaranteed nonlevel benefits. (B) Universal life insurance policies with a provision resulting in the ability of a policyholder to keep a policy in force over a secondary guarantee period. (C) Variable annuities with guaranteed death or living benefits. (D) Long-term care insurance policies. (E) Other life and health insurance and annuity products as to which the NAIC adopts model regulatory requirements with respect to credit for reinsurance. (3) A regulation adopted pursuant to subparagraph (A) or (B) of paragraph (2) may apply to any treaty containing the following: (A) Policies issued on or after January 1, 2015. (B) Policies issued prior to January 1, 2015, if risk pertaining to those policies is ceded in connection with the treaty, in whole or in part, on or after January 1, 2015. (4) A regulation adopted pursuant to this subdivision may require the ceding insurer, in calculating the amounts or forms of security required to be held under regulations promulgated under this authority, to use the Valuation Manual adopted pursuant to paragraph (1) of subdivision (b) of Section 10489.96, including all amendments in effect on the date as of which the calculation is made, to the extent applicable. (5) A regulation adopted pursuant to this subdivision shall not apply to cessions to an assuming insurer that satisfies any of the following: (A) The insurer meets the conditions of Section 922.425 in this state or is operating in accordance with provisions substantially equivalent to Section 922.425 in a minimum of five other states. (B) The insurer is certified in this state, or certified in a minimum of five other states. (C) The insurer maintains at least two hundred fifty million dollars ($250,000,000) in capital and surplus when determined in accordance with the NAIC Accounting Practices and Procedures Manual, including all amendments thereto adopted by the NAIC, excluding the impact of any permitted or prescribed practices, and satisfies either of the following: (i) The insurer is licensed in at least 26 states. (ii) The insurer is licensed in at least 10 states, and licensed or accredited in a total of at least 35 states. (6) The authority to adopt regulations pursuant to this subdivision does not limit the commissioner’s general authority to adopt regulations pursuant to subdivision (a). (Amended by Stats. 2020, Ch. 71, Sec. 5. (AB 2049) Effective January 1, 2021.)
  160. 922.9.

    ## 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. )

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    Sections 922.4 and 922.5 apply to cessions on and after January 1, 1997, for reinsurance contracts with an inception, anniversary, or renewal date at least six months after that date.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. ) ## 922.9. Sections 922.4 and 922.5 shall apply to all cessions on and after January 1, 1997, under reinsurance contracts that have had an inception, anniversary, or renewal date not less than six months after that date. (Added by Stats. 1996, Ch. 840, Sec. 17. Effective January 1, 1997.)
  161. 923.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. )

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    The commissioner must require certain insurers to use NAIC statement blanks and instructions, and the statements must follow the NAIC manual unless it conflicts with 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. ) ## 923. The commissioner shall require every insurer which is required to file an annual or quarterly statement to use the statement blanks and instructions thereto for the appropriate year adopted by the National Association of Insurance Commissioners. The statements shall be completed in conformity with the Accounting Practices and Procedures Manual adopted by the National Association of Insurance Commissioners, to the extent that the practices and procedures contained in the manual do not conflict with any other provision of this code. The commissioner may make changes from time to time in the form of the statements and the number and method of filing reports as seem to him or her best adapted to elicit from the insurers a true exhibit of their condition. The commissioner shall notify each insurer of any changes from the National Association of Insurance Commissioners’ statement blanks which the commissioner has determined pursuant to this section to be appropriate. (Amended by Stats. 2004, Ch. 599, Sec. 2. Effective January 1, 2005.)
  162. 923.5.

    ## 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. )

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    Insurers doing business in the state must keep reserves at all times, and those reserves must be computed under commissioner regulations. The commissioner may also set the reporting format for reserve information.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. ) ## 923.5. Each insurer transacting business in this state shall at all times maintain reserves in an amount estimated in the aggregate to provide for the payment of all losses and claims for which the insurer may be liable, and to provide for the expense of adjustment or settlement of losses and claims. The reserves shall be computed in accordance with regulations made from time to time by the commissioner. The promulgation of the regulations by the commissioner, or any changes thereto or amendments thereof, shall be 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. The commissioner shall make the regulations upon reasonable consideration of the ascertained experience and the character of such kinds of business for the purpose of adequately protecting the insured and securing the solvency of the insurer. The commissioner may prescribe the manner and form of reporting pertinent information concerning the reserves provided for in this section. This section shall not apply to life insurance, title insurance, disability insurance, mortgage insurance, or mortgage guaranty insurance. (Amended by Stats. 2010, Ch. 61, Sec. 1. (AB 2002) Effective January 1, 2011.)
  163. 923.6.

    ## 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. )

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    Most admitted property and casualty insurers must file an annual Statement of Actuarial Opinion, and some must also file an Actuarial Opinion Summary or provide it 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. ) ## 923.6. (a) Every admitted property and casualty insurer, unless otherwise exempted by the domiciliary commissioner, shall annually submit the opinion of an Appointed Actuary entitled “Statement of Actuarial Opinion.” This opinion shall be filed in accordance with the appropriate Property and Casualty Annual Statement Instructions of the National Association of Insurance Commissioners (NAIC). (1) For purposes of this section, the term, “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, 119.6, 120, 124, or 124.5. (2) For purposes of this section, the following terms have the same meaning as used in the Property and Casualty Annual Statement Instructions of the NAIC: (A) Actuarial Opinion. (B) Actuarial Opinion Summary. (C) Actuarial Report. (D) Appointed Actuary. (E) Statement of Actuarial Opinion. (F) Property and Casualty Annual Statement Instructions. (3) The commissioner may adopt regulations related to the terms and conditions required by the Property and Casualty Annual Statement Instructions of the NAIC. (b) Every property and casualty insurer domiciled in this state that is required to submit a Statement of Actuarial Opinion shall annually submit an Actuarial Opinion Summary, written by the insurer’s Appointed Actuary. This Actuarial Opinion Summary shall be filed in accordance with the appropriate Property and Casualty Annual Statement Instructions of the NAIC and shall be considered as a document supporting the Actuarial Opinion required in subdivision (a). (c) An admitted insurer not domiciled in this state shall provide the Actuarial Opinion Summary upon request of the commissioner. (d) An Actuarial Report and underlying workpapers as required by the appropriate Property and Casualty Annual Statement Instructions of the NAIC shall be prepared to support each Actuarial Opinion. If an insurer fails to provide either a supporting Actuarial Report or workpapers at the request of the commissioner, or if the commissioner determines that the supporting Actuarial Report or workpapers provided by the insurer are otherwise unacceptable to the commissioner, the commissioner may engage a qualified actuary at the expense of the insurer to review the opinion and the basis for the opinion and prepare the supporting Actuarial Report or workpapers. (e) Notwithstanding Section 7929.000 of the Government Code, subdivision (f), or any other provision of law, the Statement of Actuarial Opinion required by subdivision (a) shall be a public record and open to inspection. (f) (1) Documents, materials, or other information in the possession or control of the commissioner that are considered an Actuarial Report, workpapers, or Actuarial Opinion Summary provided in support of the Statement of Actuarial Opinion, and any other material provided by the insurer to the commissioner in connection with the Actuarial Report, workpapers, or Actuarial Opinion Summary shall be confidential by law and privileged, shall not be made public by the commissioner or any other person and are exempt from the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code), shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any civil action brought by a private party. (2) This subdivision shall not limit the commissioner’s authority to release the documents, materials, and other information described in paragraph (1) to the American Academy of Actuaries’ Actuarial Board for Counseling and Discipline (ABCD), or its successor, so long as those documents, materials, and other information are required for the purpose of professional disciplinary proceedings, and the ABCD establishes procedures satisfactory to the commissioner for preserving the confidentiality of the documents, nor shall this subdivision limit the commissioner’s authority to use those documents, materials, or other information in furtherance of any regulatory or legal action brought as part of the commissioner’s official duties. (3) The commissioner may also exercise, with respect to the documents, materials, or other information described in paragraph (1), all the authority specified in subdivision (b) of Section 735.5, or any successor provision. (Amended by Stats. 2021, Ch. 615, Sec. 299. (AB 474) Effective January 1, 2022. Operative January 1, 2023, pursuant to Sec. 463 of Stats. 2021, Ch. 615.)
  164. 924.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. )

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    The commissioner must charge admitted insurers late filing fees if required statements or stipulations are filed late.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. ) ## 924. The commissioner shall collect a late filing fee of seven hundred five dollars ($705) from any admitted insurer that fails to make and file in the commissioner’s office within the time prescribed by law any statements or stipulations required by this code. After the first month, the commissioner shall also collect a late filing fee of eight hundred forty-nine dollars ($849) for each and every month or fractional part of a month thereafter that the insurer continues to transact the business of insurance until those statements and stipulations are filed. (Amended by Stats. 2017, Ch. 534, Sec. 16. (AB 1699) Effective January 1, 2018.)
  165. 925.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. )

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    An insurer that appears to need immediate regulatory attention must provide supplemental accounting, financial, and actuarial information when the commissioner asks, and at intervals the commissioner sets.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. ) ## 925. Upon request of the commissioner, and at intervals as prescribed by him or her, any insurer that appears to the commissioner to require immediate regulatory attention shall provide to the commissioner supplemental accounting, financial, and actuarial information. The commissioner may request that an insurer select and retain an independent certified public accountant, certified public accountant corporation, an actuary corporation, or an independent actuary satisfactory to the commissioner, if that person has not already been retained by the insurer, whenever the information supplied or likely to be supplied is not satisfactory or acceptable to the commissioner, or, whenever the person who would be responsible for that preparation of that information has previously provided information that was not satisfactory or acceptable to the commissioner. The commissioner may select or retain an independent certified public accountant, a certified public accountant corporation, an actuary corporation, or an independent actuary, if the insurer does not within a reasonable time make the selection as requested by the commissioner. If the information is prepared by an independent certified public accountant or independent actuary, or other independent professional financial corporation or person, the corporation or person shall examine and render an opinion upon that supplemental information. (Amended by Stats. 1990, Ch. 948, Sec. 1.)
  166. 925.1.

    ## 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. )

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    Insurers must make certain accounting and actuarial materials available to the commissioner on request, and insurers must also authorize their professionals in writing to provide required information. Accountants and actuaries must keep the materials for at least five years and provide them to the insurer on reasonable request, unless privilege or self-incrimination applies.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. ) ## 925.1. (a) All supplemental information, work papers and other relevant documents of the independent certified public accountant, or independent actuary, or other independent professional financial person and the insurer relevant to information provided to the commissioner pursuant to Sections 925 to 925.2, inclusive, shall be made available by the insurer for review by the commissioner upon request at the insurer’s office, at the commissioner’s office, or any other reasonable place designated by the commissioner. (b) All supplemental information, relevant work papers and other relevant documents of the certified public accountant or actuary shall be retained for a period of not less than five years from the date of the report. The certified public accountant or the actuary shall make that information available to the insurer upon the reasonable request of the commissioner made to the insurer, except when that information is subject to the right against self-incrimination or other relevant privileges. (c) Every insurer shall authorize, in writing, the independent certified public accountant, independent actuary, or other independent professional financial person retained or engaged by it to provide to the commissioner all information subject to Section 925 to 925.2, inclusive. (Added by Stats. 1986, Ch. 1328, Sec. 2.)
  167. 925.2.

    ## 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. )

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    The commissioner may set what supplemental information must be reported and how it must be formatted, and may also set the subject matter of opinions.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. ) ## 925.2. The commissioner may prescribe the subject matter and form of reporting supplemental information and the subject matter of opinions. (Added by Stats. 1986, Ch. 1328, Sec. 3.)
  168. 925.3.

    ## 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. )

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    Certain supplemental information given to the commissioner must be kept confidential, is exempt from the California Public Records Act, and cannot be compelled by 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. ) ## 925.3. All supplemental information provided or made available to the commissioner pursuant to Sections 925 to 925.2, inclusive, including work papers and other relevant documents of the independent certified public accountants or, independent actuary or other independent professional financial person and the insurer relevant to that information, shall be received in confidence within the meaning of Section 7929.000 of the Government Code and exempt from the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code). Additionally, that information shall not be subject to subpoena or subpoena duces tecum. (Amended by Stats. 2021, Ch. 615, Sec. 300. (AB 474) Effective January 1, 2022. Operative January 1, 2023, pursuant to Sec. 463 of Stats. 2021, Ch. 615.)
  169. 925.4.

    ## 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. )

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    This section says nothing here limits the commissioner’s power to examine insurers, ask about their financial condition, or obtain supplemental information under other code 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 10. Financial Statements of Insurers [900 - 925.4] ( Article 10 enacted by Stats. 1935, Ch. 145. ) ## 925.4. Nothing contained herein shall be deemed in any manner to limit, restrict or abridge the powers of the commissioner to examine insurers, to inquire into their financial condition or to obtain supplemental information in accordance with any other provision of this code. (Added by Stats. 1986, Ch. 1328, Sec. 5.)
  170. 926.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10.1. California Insurance Community Investment [926 - 926.3] ( Article 10.1 added by Stats. 2006, Ch. 456, Sec. 1. )

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    This section creates COIN within the department and says COIN should promote insurer investments that provide social, economic, and environmental benefits.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10.1. California Insurance Community Investment [926 - 926.3] ( Article 10.1 added by Stats. 2006, Ch. 456, Sec. 1. ) ## 926. The Legislature finds and declares all of the following: (a) It is in the interest of all Californians that there is a strong and viable insurance market. (b) It is the policy of this state that insurers should be supportive of investments that promote social, economic, and environmental benefits, and should consider making these investments with an emphasis on using diverse investment managers to the extent possible. (c) This article shall establish the California Organized Investment Network (COIN) within the department. (d) COIN has the responsibility to pursue active measures to encourage insurers to make investments that promote social, economic, and environmental benefits. (e) COIN shall pursue active measures to encourage insurers to make investments, as defined in this article, including, but not limited to, creating and identifying potential investment opportunities, including the development of investment opportunity bulletins and marketing and outreach efforts. This information shall be published on the department’s internet website in investment opportunity bulletins. These opportunity bulletins help finance projects that address the state’s critical needs, particularly in underserved, low-to-moderate-income, and rural communities, as well as environmental needs. (Amended by Stats. 2021, Ch. 390, Sec. 1. (SB 655) Effective January 1, 2022.)
  171. 926.1.

    ## 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 10.1. California Insurance Community Investment [926 - 926.3] ( Article 10.1 added by Stats. 2006, Ch. 456, Sec. 1. )

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    This section defines key terms used in Article 10.1 of the Insurance 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 10.1. California Insurance Community Investment [926 - 926.3] ( Article 10.1 added by Stats. 2006, Ch. 456, Sec. 1. ) ## 926.1. As used in this article, the following terms shall have the following meanings: (a) “Area median income” (AMI) means either of the following: (1) The median family income for the metropolitan statistical area (MSA), if a person or geography is located in an MSA, or for the metropolitan division, if a person or geography is located in an MSA that has been subdivided into metropolitan divisions. (2) The statewide nonmetropolitan median family income, if a person or geography is located outside an MSA. (b) “Community development investment” means an investment where all or a portion of the investment has as its primary purpose community development for, or that directly benefits, California underserved or low-to-moderate-income individuals, families, or communities. “Community development investment” includes, but is not limited to, investments in California in the following: (1) Affordable housing, including multifamily rental and ownership housing, for underserved or low-to-moderate-income individuals or families. (2) Community facilities or community services providers (including providers of education, health, or social services) directly benefiting underserved or low-to-moderate-income individuals, families, or communities. (3) Economic development that demonstrates benefits, including, but not limited to, job creation, retention, or improvement, or provision of needed capital, to underserved or low-to-moderate-income individuals, families, or communities, including urban or rural communities, or businesses or nonprofit community service organizations that serve these communities. (4) Activities that revitalize or stabilize underserved or low-to-moderate-income communities. (5) Investments in or through California Organized Investment Network (COIN)-certified community development financial institutions (CDFIs) and investments made pursuant to the requirements of federal, state, or local community development investment programs or community development investment tax incentive programs, if these investments directly benefit underserved or low-to-moderate-income individuals, families, and communities and are consistent with this article. (6) Community development infrastructure investments. (7) Investments in a commercial property or properties located in underserved or low-to-moderate-income geographical areas and are consistent with this article. (8) Investments in reservation-based communities. “Reservation-based” means an area of land managed by a Native American tribe under the jurisdiction of the federal Bureau of Indian Affairs, provided that the tribe is named on the most current list of “Indian Entities Recognized and Eligible to Receive Services From the Bureau of Indian Affairs,” or successor document, as published in the Federal Register by the Bureau of Indian Affairs. (9) Investments in rural areas. “Rural area” means any open country or any place, town, village, or city that, by itself and taken together with any other places, towns, villages, or cities that it is part of or associated with, has either a population not exceeding 10,000 persons or has a population not exceeding 50,000 persons and is contained within a nonmetropolitan area. “Rural area” also means any open country, place, town, village, or city located within a standard MSA if the population of that area does not exceed 50,000 persons, the area is not part of, or associated with, an urban area, and the area is rural in character. (c) “Community development infrastructure” means California debt, including all debt issued by the State of California or a California state or local government agency, if all or a portion of the debt has as its primary purpose community development for, or that directly benefits, underserved or low-to-moderate-income communities and is consistent with subdivision (b). (d) “Diverse investment managers” means investment management organizations, including corporations, groups, and persons within corporations, partnerships, limited liability corporations, and other special purpose vehicles that are either located in, or actively make and hold investments in, California and whose investment managers are composed of at least 51 percent women, veterans, minorities, or lesbian, gay, bisexual, transgender, or queer persons, or a combination of persons in those groups. (e) “Geography” means a census tract delineated by the United States Bureau of the Census in the most recent decennial census. (f) “Green investments” means investments that emphasize renewable energy projects, economic development, and affordable housing focused on infill sites so as to reduce the degree of automobile dependency and promote the use and reuse of existing urbanized lands supplied with infrastructure for the purpose of accommodating new growth and jobs. “Green investments” also means investments that can help communities grow through new capital investment in the maintenance and rehabilitation of existing infrastructure so that the reuse and reinvention of city centers and existing transportation corridors and community space, including projects offering energy efficiency improvements and renewable energy generation, including, but not limited to, solar and wind power, water and waste management, sustainable agriculture, mixed-use development, affordable housing opportunities, multimodal transportation systems, and transit-oriented development, can advance economic development, jobs, and housing. (g) “Impact investments” means investments that provide a social or environmental benefit to underserved or low-to-moderate-income individuals, families, or communities in California. (h) “High-impact investments” means investments that are innovative, responsive to community needs, not routinely provided by insurers, and provide a minimum of 50 percent social or environmental benefits to underserved or low-to-moderate-income individuals, families, or communities in California. (i) “Insurer” means an admitted insurer as defined in Section 24, including the State Compensation Insurance Fund, or a domestic fraternal benefit society as defined in Section 10990. (j) “Investment” means a lawful equity or debt investment, or loan, or deposit obligation, or other investment or investment transaction allowed by the Insurance Code. (k) “Low-income” means an individual income that is less than 50 percent of the AMI, or a median family income that is less than 50 percent of the AMI in the case of a geographical area. (l) “MSA” means a metropolitan statistical area as defined by the Director of the Office of Management and Budget. (m) “Moderate-income” means an individual income that is at least 50 percent but less than 80 percent of the AMI, or a median family income that is at least 50 percent but less than 80 percent of the AMI in the case of a geographical area. (n) “Nonmetropolitan area” means any area that is not located in an MSA. (Amended by Stats. 2021, Ch. 390, Sec. 2. (SB 655) Effective January 1, 2022.)
  172. 926.3.

    ## 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 10.1. California Insurance Community Investment [926 - 926.3] ( Article 10.1 added by Stats. 2006, Ch. 456, Sec. 1. )

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    Certain admitted insurers with at least $100 million in annual California premium must file a community development policy statement by July 1, 2011, and the commissioner must make those statements publicly accessible online.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10.1. California Insurance Community Investment [926 - 926.3] ( Article 10.1 added by Stats. 2006, Ch. 456, Sec. 1. ) ## 926.3. (a) It is the policy of the State of California that (1) insurers should, where practicable, be supportive of community development investments and community development infrastructure investments, and insurers should be encouraged to invest in prudent community development investments and community development infrastructure investments that benefit California and California’s low- and moderate-income communities; (2) every admitted insurer that writes a substantial amount of insurance in the state should consider community development investments and community development infrastructure investments; and (3) the California Organized Investment Network is a part of the department, and has the responsibility to pursue active measures to encourage community development investing by admitted insurers. (b) Each insurer admitted in California that writes premium in California equal to or in excess of one hundred million dollars ($100,000,000) annually shall develop, and file with the commissioner no later than July 1, 2011, a policy statement on community development investments and community development infrastructure investments that expresses the insurer’s goals for these investments during the current and following calendar year. These filings shall be public information. For purposes of this subdivision, “policy statement” means a statement of principle intended to influence a decision or action. The policy statement may include general goals or specific investment goals, but is not required to contain specific investment goals or thresholds. (c) The commissioner shall establish a link on the department’s Internet Web site that provides public access to the contents of each insurer’s policy statement and the data on community development investments and community development infrastructure investments provided by each insurer pursuant to subdivision (b). (Amended by Stats. 2014, Ch. 384, Sec. 3. (AB 2128) Effective January 1, 2015.)
  173. 927.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10.2. Minority, Women, LGBT, Veteran, and Disabled Veteran Business Enterprises [927 - 927.5] ( Article 10.2 added by Stats. 2019, Ch. 249, Sec. 1. )

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    This section states legislative findings about encouraging insurer diversity, including supplier diversity and board diversity efforts.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10.2. Minority, Women, LGBT, Veteran, and Disabled Veteran Business Enterprises [927 - 927.5] ( Article 10.2 added by Stats. 2019, Ch. 249, Sec. 1. ) ## 927. The Legislature finds and declares all of the following: (a) It is in the state’s interest to encourage competitive business opportunities for all of its people. Insurers are uniquely positioned to build relationships within the communities they serve through the development, inclusion, and utilization of certified minority, women, LGBT, persons with disabilities, veteran, and disabled veteran-owned business enterprises whenever possible. (b) It is in the state’s interest to encourage corporate leadership opportunities for all of its people. Insurers are uniquely positioned to build relationships within the communities they serve through the development of a corporate board that represents the diversity of the state. (c) According to the California Insurance Diversity Survey, in 2021, among at least 1,600 board seats reported by 386 insurance companies, nearly 64 percent of those seats were occupied by Caucasians, and 62 percent of board members identified as men. Meanwhile, less than 1 percent of board members publicly identified as LGBT, 4.1 percent publicly identified as veterans, and less than 1 percent publicly identified as disabled veterans. Moreover, diverse board members from historically underrepresented communities continue to remain disproportionately low. Blacks and African Americans, Asians-Pacific Islanders, Hispanics-Latinos, and Native Americans comprised only 7.8 percent, 4.4 percent, 3.4 percent, and 0 percent, of board seats, respectively. (d) An analysis by KPMG of 2020 proxy statement data from Equilar, Inc. revealed that nearly 23 percent of the directors serving on the boards of publicly held insurance companies in the Russell 3000 Index are women. At more than 35 percent of insurance companies, women comprise less than 10 percent of the board. (e) By requiring each major insurer to report to the Insurance Commissioner, explaining the insurer’s supplier diversity statement, expressing its goals regarding certified minority, women, LGBT, persons with disabilities, veteran, and disabled veteran-owned business enterprises, and detailing the insurer’s efforts and goals regarding board diversity, and by having the commissioner place that information on the department’s internet website, will help facilitate these relationships. (Amended by Stats. 2023, Ch. 204, Sec. 3. (AB 1140) Effective January 1, 2024.)
  174. 927.1.

    ## 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 10.2. Minority, Women, LGBT, Veteran, and Disabled Veteran Business Enterprises [927 - 927.5] ( Article 10.2 added by Stats. 2019, Ch. 249, Sec. 1. )

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    This section defines several types of business enterprises and related terms for the article, including control and 51 percent ownership thresholds.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10.2. Minority, Women, LGBT, Veteran, and Disabled Veteran Business Enterprises [927 - 927.5] ( Article 10.2 added by Stats. 2019, Ch. 249, Sec. 1. ) ## 927.1. For the purposes of this article, the following definitions apply: (a) “Control” means to exercise the power to make policy decisions. (b) “Disabled veteran business enterprise” has the same meaning as defined in subparagraph (A) of paragraph (7) of subdivision (b) of Section 999 of the Military and Veterans Code, or any successor provision. Disabled veteran business enterprise certification eligibility requirements shall be consistent with those imposed by the Department of General Services, and this section applies only to those disabled veteran business enterprises certified by the Department of General Services. (c) “LGBT business enterprise” means a business enterprise that is 51 percent owned, managed, operated, and controlled by one or more lesbian, gay, bisexual, or transgender (LGBT) individuals, has been legally formed in the United States, and exercises independence from any non-LGBT business enterprise. (d) “Minority business enterprise” means a business enterprise, physically located in the United States or its trust territories, that is at least 51 percent owned by a minority group or groups, or, in the case of any publicly owned business, at least 51 percent of the stock of which is owned by one or more minority groups, and whose management and daily business operations are controlled by one or more of those individuals. “Minority” includes African Americans, Hispanic Americans, Native Americans, and Asian Pacific Americans. (e) “Operate” means to be actively involved in the day-to-day management of the enterprise and not to be merely officers or directors. (f) “Person with disabilities” means a person who identifies as having any of the following: (1) A physical or mental impairment that substantially limits one or more major life activities as defined by subdivision (2) of Section 12102 of Title 42 of the United States Code, also known as the federal Americans with Disabilities Act of 1990. (2) A record of such an impairment. (3) Being regarded as having such an impairment as described under subdivision (3) of Section 12102 of the federal Americans with Disabilities Act of 1990. (g) (1) “Persons with disabilities business enterprise” or “Disability-owned business enterprise” or “Disabled-owned business enterprise” means a business enterprise physically located in the United States or its trust territories, that is at least 51 percent owned by a person or persons with a disability or, in the case of a publicly owned business, at least 51 percent of the stock of which is owned by one or more persons with a disability, and whose management and daily business operations are controlled by one or more of those individuals. (2) “Disabled” means an individual who self-identifies as having a disability, as defined in Section 12102 of the federal Americans with Disabilities Act of 1990. (h) “Women business enterprise” means a business enterprise physically located in the United States or its trust territories, that is at least 51 percent owned by a woman or women, or, in the case of any publicly owned business at least 51 percent of the stock of which is owned by one or more women, and whose management and daily business operations are controlled by one or more of those individuals. (i) “Veteran business enterprise” means a business enterprise physically located in the United States or its trust territories that is at least 51 percent owned by one or more veteran groups or, in the case of a publicly owned business, at least 51 percent of the stock of which is owned by one or more veteran groups, and whose management and daily business operations are controlled by one or more of those individuals. (Amended by Stats. 2023, Ch. 204, Sec. 4. (AB 1140) Effective January 1, 2024.)
  175. 927.2.

    ## 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 10.2. Minority, Women, LGBT, Veteran, and Disabled Veteran Business Enterprises [927 - 927.5] ( Article 10.2 added by Stats. 2019, Ch. 249, Sec. 1. )

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    Large admitted insurers must report certain minority-, women-, LGBT-, disabled-, veteran-, and disabled veteran-owned business procurement information to the commissioner on a set schedule.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10.2. Minority, Women, LGBT, Veteran, and Disabled Veteran Business Enterprises [927 - 927.5] ( Article 10.2 added by Stats. 2019, Ch. 249, Sec. 1. ) ## 927.2. (a) (1) Commencing July 1, 2020, and biennially on July 1 of each even-numbered year thereafter, each admitted insurer, with California premiums written of seventy-five million dollars ($75,000,000) or more, shall report to the commissioner on its minority, women, LGBT, persons with disabilities, veteran, and disabled veteran-owned business procurement efforts during the previous two years. (2) The insurer shall provide all of the following: (A) The insurer’s supplier diversity policy statement. (B) The insurer’s outreach and communications to minority, women, LGBT, persons with disabilities, veteran, and disabled veteran business enterprises, including: (i) How the insurer encourages and seeks out minority, women, LGBT, persons with disabilities, veteran, and disabled veteran-owned business enterprises to become potential suppliers. (ii) How the insurer encourages its employees involved in procurement to seek out minority, women, LGBT, persons with disabilities, veteran, and disabled veteran-owned business enterprises to become potential suppliers. (iii) How the insurer conducts outreach and communication to minority, women, LGBT, persons with disabilities, veteran, and disabled veteran business enterprises. (iv) How the insurer supports organizations that promote or certify minority, women, LGBT, persons with disabilities, veteran, and disabled veteran-owned business enterprises. (v) Information regarding appropriate contacts at the insurer for interested business enterprises. (C) Information about which procurements are made from minority, women, LGBT, persons with disabilities, and veteran business enterprises with a headquarters’ address in California, and from disabled veteran business enterprises, as defined in subdivision (b) of Section 927.1, with each category aggregated separately, to the extent that information is readily accessible. An insurer may also include other relevant information. (D) Information about which procurements are made from minority, women, LGBT, persons with disabilities, veteran, and disabled veteran business enterprises with at least a majority of the enterprise’s workforce in California, with each category aggregated separately, to the extent that information is readily accessible. An insurer may also include other relevant information. (E) Information related to total procurement contract dollars awarded, to the extent that information is readily accessible. An insurer may also include other relevant information. (3) An insurer that does not enter into contracts to procure goods or services in California satisfies the requirements of paragraph (2) by filing a statement with the commissioner attesting that it does not enter into procurement contracts in California. (b) This section does not require quotas, set-asides, or preferences in an admitted insurer’s procurement of goods or services, and this section does not apply to insurer producer or licensee contracts. Admitted insurers retain the authority to use business judgment to select the supplier for a particular contract. (c) This section does not preclude an admitted insurer that is a member of an insurance holding company system, as defined in Article 4.7 (commencing with Section 1215) of Chapter 2, from complying with paragraphs (1) and (2) of subdivision (a) through a single filing on behalf of the entire group of affiliated companies. (d) Failure to report the information required by subdivision (a), by the reporting deadline, shall subject the admitted insurer to a civil penalty to be fixed by the commissioner, not to exceed five thousand dollars ($5,000), or if the act or practice was willful, a civil penalty not to exceed ten thousand dollars ($10,000). An insurer may request, and the commissioner may grant, a 30-day extension to report the information if needed due to unintended or unforeseen delays. If the insurer has failed to report the information within 30 days of a written notice by the commissioner that the insurer has failed to report the information, the commissioner may find that the failure to report the information was willful and increase the civil penalty to an amount not to exceed ten thousand dollars ($10,000). The penalty imposed by this section shall be enforced by the commissioner and is appealable by means of any remedy provided by Section 12940, or by Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. This subdivision is the sole means for enforcement of this section. (e) By November 1 of the reporting year, the commissioner shall establish and maintain a link on the department’s internet website that provides public access to the contents of each admitted insurer’s reported information on minority, women, LGBT, persons with disabilities, veteran, and disabled veteran-owned business procurement efforts. The commissioner shall include a statement on the department’s internet website that the information on minority, women, LGBT, persons with disabilities, veteran, and disabled veteran-owned businesses posted pursuant to this subdivision is provided for informational purposes only. (Amended by Stats. 2023, Ch. 204, Sec. 5. (AB 1140) Effective January 1, 2024.)
  176. 927.3.

    ## 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 10.2. Minority, Women, LGBT, Veteran, and Disabled Veteran Business Enterprises [927 - 927.5] ( Article 10.2 added by Stats. 2019, Ch. 249, Sec. 1. )

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    Large admitted insurers must report board diversity information to the commissioner, run a board-member survey with required disclosures and confidentiality protections, and the commissioner must publish only aggregate information.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10.2. Minority, Women, LGBT, Veteran, and Disabled Veteran Business Enterprises [927 - 927.5] ( Article 10.2 added by Stats. 2019, Ch. 249, Sec. 1. ) ## 927.3. (a) (1) Commencing July 1, 2020, and biennially on July 1 of each even-numbered year thereafter, each admitted insurer with California premiums written of seventy-five million dollars ($75,000,000) or more, shall report to the commissioner on its governing board and board diversity efforts during the previous two years. (2) The insurer shall provide all of the following information: (A) The demographic makeup of the insurer’s governing board. (B) The insurer’s goals regarding board diversity, including outreach and communication strategies to diversify its board. (C) A board diversity policy statement or a measurable goal or goals to include at least one diverse board member on the insurer’s board of directors. For purposes of this subparagraph: (i) A “board diversity policy statement” is any language that refers to an insurer’s corporate governance policy or guidelines, with the goal of increasing diversity on the insurer’s board of directors. Board diversity language as part of an insurer’s corporate governance policy describes how the board considers gender, ethnicity, race, age, geographic location, sexual orientation, skills, disability, and experience when identifying director candidates and throughout the nomination process. (ii) A “diverse board member” means an individual who self-identifies as a woman, nonbinary, Black, African American, Hispanic, Latino-Latina, Asian, Pacific Islander, Native American, Native Hawaiian, Alaskan Native, person with disabilities, veteran or disabled veteran, lesbian, gay, bisexual, transgender, or queer. (b) (1) An insurer shall provide each board member with an opportunity to participate in a survey for the purpose of collecting and reporting the information described in subparagraph (A) of paragraph (2) of subdivision (a). (2) The insurer shall distribute a written disclosure to each board member prior to, or concurrently with, the survey. The disclosure shall notify the board member that the board member’s decision to disclose their demographic information is voluntary, that no adverse action may be taken against the board member or the insurer if the board member declines to participate in the survey, and that the aggregate data collected for each demographic category will be reported. (3) The survey shall be completed using a standardized form to be specified by the commissioner. (4) Neither an insurer nor the department shall in any way encourage, incentivize, or attempt to influence the decision of a board member to participate in the survey. (5) An insurer required to conduct the survey shall do both of the following: (A) Collect survey response data from board members in a manner that maintains the anonymity of the responding board member and the confidentiality of the data reported. (B) Transmit the survey response data to the department in a manner that does not associate the survey response data with an individual board member. (c) This section does not require quotas, set-asides, or preferences in regard to an admitted insurer’s governing board. (d) This section does not preclude an admitted insurer that is a member of an insurance holding company system, as defined in Article 4.7 (commencing with Section 1215) of Chapter 2, from complying with subdivisions (a) and (b) through a single filing by the insurance holding company on behalf of an entire group of affiliated companies that identifies the aggregated survey results for each affiliated insurer. (e) By November 1 of the reporting year, the commissioner shall establish and maintain a link on the department’s internet website that provides public access to the information submitted pursuant to this section. The commissioner shall publish the information submitted pursuant to this section in the aggregate, and shall not identify an individual respondent or insurer. The commissioner shall include a statement on the department’s internet website that the information posted pursuant to this subdivision is provided for informational purposes only. (f) The data collected pursuant to this section is confidential and shall not be released by the department or an insurer under any circumstances, except as provided in this section. (Amended by Stats. 2023, Ch. 204, Sec. 6. (AB 1140) Effective January 1, 2024.)
  177. 927.4.

    ## 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 10.2. Minority, Women, LGBT, Veteran, and Disabled Veteran Business Enterprises [927 - 927.5] ( Article 10.2 added by Stats. 2019, Ch. 249, Sec. 1. )

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    The commissioner must establish an Insurance Diversity Task Force, and the task force must have 13 to 15 members and carry out specified advisory, meeting, outreach, and conflict-disclosure duties.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10.2. Minority, Women, LGBT, Veteran, and Disabled Veteran Business Enterprises [927 - 927.5] ( Article 10.2 added by Stats. 2019, Ch. 249, Sec. 1. ) ## 927.4. (a) The commissioner shall establish and appoint an Insurance Diversity Task Force. (b) The task force shall be comprised of at least 13, but not more than 15, members as follows: (1) The commissioner or the commissioner’s designee. (2) Two members who are representatives in the insurance industry, one of whom shall, at the time of appointment, serve as a practitioner in the field of supplier diversity, and one of whom shall, at the time of appointment, have expertise in governing board diversity. (3) Two members who are representatives of a minority business enterprise. (4) Two members who are representatives of a women business enterprise. (5) A member who is a representative of a disabled veteran business enterprise or a veteran business enterprise. (6) A member who is a representative of an LGBT business enterprise. (7) A member who is representative of a persons with disabilities business enterprise. (8) Two members with expertise in the field of supplier diversity. (9) Two members with expertise in the field of governing board diversity. (c) The term of each member shall be for two years. Staggered terms shall be established by drawing lots at the first meeting of the task force so that a simple majority of the members shall initially serve a two-year term, and the remainder shall initially serve a one-year term. (d) The task force shall have all of the following duties: (1) To advise and provide recommendations to the department on the best methods to increase procurement with diverse suppliers and to increase diversity on governing boards within the insurance industry. (2) To meet quarterly, or as deemed necessary by the commissioner, or the commissioner’s designee. (3) Assist the department in promoting and providing outreach to insurance companies that are actively engaged in supplier and governing board diversity issues. (e) The members of the task force shall not receive compensation from the state for their services under this section but may be reimbursed for their actual and necessary expenses incurred in connection with attending a task force meeting. (f) The department shall review and revise, if necessary, the department’s conflicts of interest regulations to ensure that each task force member is required to disclose conflicts of interest to the public. (Amended by Stats. 2023, Ch. 204, Sec. 7. (AB 1140) Effective January 1, 2024.)
  178. 927.5.

    ## 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 10.2. Minority, Women, LGBT, Veteran, and Disabled Veteran Business Enterprises [927 - 927.5] ( Article 10.2 added by Stats. 2019, Ch. 249, Sec. 1. )

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    The commissioner may issue regulations that further this article’s purposes.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10.2. Minority, Women, LGBT, Veteran, and Disabled Veteran Business Enterprises [927 - 927.5] ( Article 10.2 added by Stats. 2019, Ch. 249, Sec. 1. ) ## 927.5. The commissioner may promulgate regulations that further the purposes of this article. (Added by Stats. 2019, Ch. 249, Sec. 1. (SB 534) Effective January 1, 2020.)
  179. 928.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10.3. Single Risk Limitation [928- 928.] ( Article 10.3 added by Stats. 1992, Ch. 614, Sec. 4. )

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    An admitted insurer must not take on a single risk or accept reinsurance on a single risk if the liability above authorized reinsurance credit exceeds 10% of capital and surplus.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 10.3. Single Risk Limitation [928- 928.] ( Article 10.3 added by Stats. 1992, Ch. 614, Sec. 4. ) ## 928. (a) An admitted insurer shall not undertake any single risk or accept reinsurance on any single risk when its liability thereon in excess of the amount reinsured by reinsurance authorized for annual statement credit under this code exceeds 10 percent of its capital and surplus as shown by its last statement on file in the office of the commissioner. (b) This section shall apply to any class or classes of insurance specified in Chapter 1 (commencing with Section 100) of Part 1 of Division 1, except: (1) Life, as defined in Section 101. (2) Title, as defined in Section 104. (3) Surety, as defined in Section 105. (4) Mortgage Guaranty, as defined in Section 119. (5) Financial Guaranty, as defined in Section 124. (Added by Stats. 1992, Ch. 614, Sec. 4. Effective January 1, 1993.)
  180. 929.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10.4. Wildfire Risk Information Reporting [929 - 929.3] ( Article 10.4 added by Stats. 2018, Ch. 616, Sec. 3. )

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    Certain admitted insurers must file wildfire-related residential property experience reports with the commissioner, and the commissioner may set the filing format by bulletin.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10.4. Wildfire Risk Information Reporting [929 - 929.3] ( Article 10.4 added by Stats. 2018, Ch. 616, Sec. 3. ) ## 929. (a) (1) On or before April 1, 2020, and every two years thereafter, an admitted insurer with written California premiums totaling ten million dollars ($10,000,000) or more shall submit a report to the commissioner on its residential property experience data for the previous two years for policies written in California. (2) The premium threshold for reporting shall be increased to twelve million dollars ($12,000,000) for the reports due on April 1, 2026, and shall thereafter be increased every five years by 20 percent of the threshold amount required in the year immediately preceding the increase. (3) Reports filed on April 1, 2020, shall include data from calendar years 2018 and 2019. Subsequent reports shall likewise include data from the two calendar years immediately preceding the year in which the report is due. (b) The commissioner may specify, by bulletin, the manner of submission and format of the report required pursuant to subdivision (a). The report shall include the following information reported by individual policy: (1) Fire- or wildfire-incurred losses, if any, reported by property coverage category and the date of the loss. (2) The public protection class or its equivalent, if utilized by the insurer. (3) The specific numerical or other fire risk score and source of fire risk score, if applicable. (4) Premium. (5) ZIP Code. (c) If the commissioner issues a bulletin pursuant to subdivision (b), the initial bulletin shall be posted to the department’s Internet Web site on or before May 1, 2019. Any updated bulletin shall be posted no less than two months before the date that the insurer’s report in which the changes are required is due. (d) An insurance holding company system, as defined in subdivision (e) of Section 1215, may submit a consolidated report of the information required by this section for all insurers comprising the holding company system. (e) For the purposes of this section, “policy of residential property insurance” has the meaning described in subdivision (a) of Section 10087. (Added by Stats. 2018, Ch. 616, Sec. 3. (SB 824) Effective January 1, 2019.)
  181. 929.1.

    ## 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 10.4. Wildfire Risk Information Reporting [929 - 929.3] ( Article 10.4 added by Stats. 2018, Ch. 616, Sec. 3. )

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    Information submitted to the commissioner under Section 929 is confidential and not publicly disclosable.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10.4. Wildfire Risk Information Reporting [929 - 929.3] ( Article 10.4 added by Stats. 2018, Ch. 616, Sec. 3. ) ## 929.1. Information submitted to the commissioner, as required by Section 929, shall be confidential pursuant to Section 7929.000 of the Government Code and exempt from the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code). Additionally, that information shall not be subject to subpoena or subpoena duces tecum. Testimony by the commissioner, the commissioner’s staff, an employee of the department, or a person to whom the report required by Section 929 was disclosed, regarding the contents of any report submitted pursuant to Section 929, shall be inadmissible as evidence in a civil proceeding. (Amended by Stats. 2021, Ch. 615, Sec. 301. (AB 474) Effective January 1, 2022. Operative January 1, 2023, pursuant to Sec. 463 of Stats. 2021, Ch. 615.)
  182. 929.2.

    ## 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 10.4. Wildfire Risk Information Reporting [929 - 929.3] ( Article 10.4 added by Stats. 2018, Ch. 616, Sec. 3. )

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    The commissioner must post a wildfire risk report on the department’s website and keep it updated every two years, with separate information for each calendar year.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10.4. Wildfire Risk Information Reporting [929 - 929.3] ( Article 10.4 added by Stats. 2018, Ch. 616, Sec. 3. ) ## 929.2. (a) The commissioner shall post to the department’s Internet Web site a report on wildfire risk compiled from the data collected pursuant to Section 929. (b) The report shall be updated every two years to reflect new data submitted by insurers. (c) The report shall separately provide information each calendar year. (Added by Stats. 2018, Ch. 616, Sec. 3. (SB 824) Effective January 1, 2019.)
  183. 929.3.

    ## 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 10.4. Wildfire Risk Information Reporting [929 - 929.3] ( Article 10.4 added by Stats. 2018, Ch. 616, Sec. 3. )

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    An admitted insurer that fails to submit the required report can be fined by the commissioner, with higher penalties if the failure was willful.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10.4. Wildfire Risk Information Reporting [929 - 929.3] ( Article 10.4 added by Stats. 2018, Ch. 616, Sec. 3. ) ## 929.3. (a) Failure to submit a report pursuant to Section 929 shall subject an admitted insurer to a civil penalty to be fixed by the commissioner, not to exceed five thousand dollars ($5,000) or, if the act was willful, a civil penalty not to exceed ten thousand dollars ($10,000). (b) An insurer may request, and the commissioner may grant, a 30-day extension, if needed due to unintended or unforeseen delays, to submit the report. If the insurer fails to submit the report within 30 days of a written notice by the commissioner regarding the failure to submit the report, the commissioner may find that the failure to submit the report was willful and increase the civil penalty to an amount not to exceed ten thousand dollars ($10,000). (c) The penalty imposed by this section shall be enforced by the commissioner and may be appealed by means of a remedy provided by Section 12940, or by Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. This subdivision is the sole means for enforcement of this section. (Added by Stats. 2018, Ch. 616, Sec. 3. (SB 824) Effective January 1, 2019.)
  184. 930.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10.5. National Association of Insurance Commissioners [930 - 934] ( Article 10.5 added by Stats. 1991, Ch. 986, Sec. 1. )

    Verify source ↗

    This article applies to domestic, foreign, and alien insurers doing business in this state.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10.5. National Association of Insurance Commissioners [930 - 934] ( Article 10.5 added by Stats. 1991, Ch. 986, Sec. 1. ) ## 930. The provisions of this article shall apply to all domestic, foreign, and alien insurers doing business in this state. (Added by Stats. 1991, Ch. 986, Sec. 1.)
  185. 931.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10.5. National Association of Insurance Commissioners [930 - 934] ( Article 10.5 added by Stats. 1991, Ch. 986, Sec. 1. )

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    Insurers doing business in the state must file annual and quarterly reports with the National Association of Insurance Commissioners, and include required attachments and formats.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10.5. National Association of Insurance Commissioners [930 - 934] ( Article 10.5 added by Stats. 1991, Ch. 986, Sec. 1. ) ## 931. (a) Each domestic, foreign, and alien insurer doing business in this state shall annually, on or before the first day of March of each year, file with the National Association of Insurance Commissioners a copy of its annual statement convention blank, along with any additional filings as prescribed by the commissioner for the preceding year. The information filed with the National Association of Insurance Commissioners shall be in the same format and scope as that required by the commissioner and shall include the signed jurat page and the actuarial certification. Any amendments and addendums to the annual statement filing subsequently filed with the commissioner shall also be filed with the National Association of Insurance Commissioners. (b) Each year, on or before the following dates, every domestic, foreign, and alien insurer doing business in this state shall make and file with the National Association of Insurance Commissioners, in the number, form, and methods prescribed by the commissioner, a copy of the quarterly statements exhibiting its condition and affairs for the period beginning on January 1 of the current calendar year through the end of each quarter of the current year as described below. These quarterly filings shall cover the period of time beginning January 1 of the current year through and including the last day of the quarter for which the report is being made. The first quarter filing shall be filed on or before May 15th of every year. The second quarter filing shall be filed on or before August 15th of every year. The third quarter filing shall be filed on or before November 15th of every year. If any of these dates fall on a day other than a business day, then the filing is due to the National Association of Insurance Commissioners by the first business day preceding that date. The information filed with the National Association of Insurance Commissioners shall include a jurat page. A copy of any amendments and addendums to the quarterly statement filings subsequently filed with the commissioner shall also be filed with the National Association of Insurance Commissioners. (c) Foreign insurers that are domiciled in a state which has a law substantially similar to subdivision (a) of this section shall be deemed in compliance with this section. (Amended by Stats. 2004, Ch. 599, Sec. 3. Effective January 1, 2005.)
  186. 932.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10.5. National Association of Insurance Commissioners [930 - 934] ( Article 10.5 added by Stats. 1991, Ch. 986, Sec. 1. )

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    Certain NAIC-related people and groups are treated as agents of the commissioner and are protected from civil liability for specified acts unless actual malice is involved.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10.5. National Association of Insurance Commissioners [930 - 934] ( Article 10.5 added by Stats. 1991, Ch. 986, Sec. 1. ) ## 932. In the absence of actual malice, members of the National Association of Insurance Commissioners, their duly authorized committees, subcommittees, and task forces, their delegates, National Association of Insurance Commissioners’ employees, and all others charged with the responsibility of collecting, reviewing, analyzing, and disseminating the information developed from the filing of the annual statement convention blanks shall be acting as agents of the commissioner under the authority of this article and shall not be subject to civil liability for libel, slander, or any other cause of action by virtue of their collection, review, and analysis or dissemination of the data and information collected from the filings required herein. (Added by Stats. 1991, Ch. 986, Sec. 1.)
  187. 933.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10.5. National Association of Insurance Commissioners [930 - 934] ( Article 10.5 added by Stats. 1991, Ch. 986, Sec. 1. )

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    The department must not disclose certain insurer financial analysis ratios and examination synopses submitted by the National Association of Insurance Commissioners’ Insurance Regulatory Information System.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10.5. National Association of Insurance Commissioners [930 - 934] ( Article 10.5 added by Stats. 1991, Ch. 986, Sec. 1. ) ## 933. All financial analysis ratios and examination synopses concerning insurers that are submitted to the department by the National Association of Insurance Commissioners’ Insurance Regulatory Information System are confidential and may not be disclosed by the department. (Added by Stats. 1991, Ch. 986, Sec. 1.)
  188. 934.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10.5. National Association of Insurance Commissioners [930 - 934] ( Article 10.5 added by Stats. 1991, Ch. 986, Sec. 1. )

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    The commissioner may suspend, revoke, or refuse to renew an insurer’s certificate of authority if the insurer fails to file its annual or quarterly statement with the National Association of Insurance Commissioners on time or within an extension granted for good 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 10.5. National Association of Insurance Commissioners [930 - 934] ( Article 10.5 added by Stats. 1991, Ch. 986, Sec. 1. ) ## 934. The commissioner may suspend, revoke, or refuse to renew the certificate of authority of any insurer failing to file its annual or quarterly statement with the National Association of Insurance Commissioners when due or within any extension of time which the commissioner, for good cause, may grant. (Amended by Stats. 2004, Ch. 599, Sec. 4. Effective January 1, 2005.)
  189. 935.1.

    ## 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 10.6. Own Risk and Solvency Assessment [935.1 - 935.11] ( Article 10.6 added by Stats. 2013, Ch. 238, Sec. 1. )

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    This section says insurers domiciled in the state must follow the ORSA requirements unless exempt, and ORSA Summary Reports are confidential and not for public disclosure.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10.6. Own Risk and Solvency Assessment [935.1 - 935.11] ( Article 10.6 added by Stats. 2013, Ch. 238, Sec. 1. ) ## 935.1. (a) The purpose of this article is to provide the requirements for maintaining a risk management framework, completing an Own Risk and Solvency Assessment (ORSA), and provide guidance and instructions for filing an ORSA Summary Report with the commissioner. The requirements of this article shall apply to all insurers domiciled in this state unless exempt pursuant to Section 935.6. (b) The Legislature finds and declares that the ORSA Summary Report will contain confidential and sensitive information related to an insurer’s or insurance group’s identification of risks that are material and relevant to the insurer or insurance group filing the report. This information will include proprietary and trade secret information that has the potential for harm and competitive disadvantage to the insurer or insurance group if the information is made public. It is the intent of the Legislature that the ORSA Summary Report shall be a confidential document filed with the commissioner, that the ORSA Summary Report shall be shared only as stated in this article to assist the commissioner in the performance of his or her duties, and that in no event shall the ORSA Summary Report be subject to public disclosure. (Added by Stats. 2013, Ch. 238, Sec. 1. (AB 584) Effective January 1, 2014. Section operative January 1, 2015, pursuant to Section 935.11.)
  190. 935.10.

    ## 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 10.6. Own Risk and Solvency Assessment [935.1 - 935.11] ( Article 10.6 added by Stats. 2013, Ch. 238, Sec. 1. )

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    If part of this article is invalid, the rest still applies.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10.6. Own Risk and Solvency Assessment [935.1 - 935.11] ( Article 10.6 added by Stats. 2013, Ch. 238, Sec. 1. ) ## 935.10. If any provision of this article, or the application thereof to any person or circumstance, is held invalid, that 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. 2013, Ch. 238, Sec. 1. (AB 584) Effective January 1, 2014. Section operative January 1, 2015, pursuant to Section 935.11.)
  191. 935.11.

    ## 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 10.6. Own Risk and Solvency Assessment [935.1 - 935.11] ( Article 10.6 added by Stats. 2013, Ch. 238, Sec. 1. )

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    This article becomes operative on January 1, 2015.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10.6. Own Risk and Solvency Assessment [935.1 - 935.11] ( Article 10.6 added by Stats. 2013, Ch. 238, Sec. 1. ) ## 935.11. This article shall become operative on January 1, 2015. (Added by Stats. 2013, Ch. 238, Sec. 1. (AB 584) Effective January 1, 2014. Note: This section prescribes a delayed operative date (Jan. 1, 2015) for Article 10.6, commencing with Section 935.1.)
  192. 935.2.

    ## 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 10.6. Own Risk and Solvency Assessment [935.1 - 935.11] ( Article 10.6 added by Stats. 2013, Ch. 238, Sec. 1. )

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    This section defines key ORSA terms, including “insurance group,” “insurer,” “ORSA,” “ORSA Guidance Manual,” and “ORSA Summary Report.”

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10.6. Own Risk and Solvency Assessment [935.1 - 935.11] ( Article 10.6 added by Stats. 2013, Ch. 238, Sec. 1. ) ## 935.2. For purposes of this article, the following definitions apply: (a) For the purpose of conducting an ORSA, the term “insurance group” shall mean those insurers and affiliates included within an insurance holding company system as defined in subdivision (e) of Section 1215. (b) The term “insurer” shall have the same meaning as set forth in subdivision (f) of Section 1215, except that it shall not include agencies, authorities, or instrumentalities of the United States, its possessions and territories, the Commonwealth of Puerto Rico, the District of Columbia, or a state or political subdivision of a state. (c) An “Own Risk and Solvency Assessment” or “ORSA” means a confidential internal assessment that is appropriate to the nature, scale, and complexity of an insurer or insurance group, conducted by that insurer or insurance group, of the material and relevant risks associated with the insurer’s or insurance group’s current business plan and the sufficiency of capital resources to support those risks. (d) The term “ORSA Guidance Manual” means the current version of the Own Risk and Solvency Assessment Guidance Manual developed and adopted by the National Association of Insurance Commissioners (NAIC) and as amended from time to time. A change in the ORSA Guidance Manual shall be effective on the January 1 following the calendar year in which the changes have been adopted by the NAIC. (e) An “ORSA Summary Report” means a confidential high-level summary of an insurer’s or insurance group’s ORSA. (Added by Stats. 2013, Ch. 238, Sec. 1. (AB 584) Effective January 1, 2014. Section operative January 1, 2015, pursuant to Section 935.11.)
  193. 935.3.

    ## 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 10.6. Own Risk and Solvency Assessment [935.1 - 935.11] ( Article 10.6 added by Stats. 2013, Ch. 238, Sec. 1. )

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    An insurer must maintain a risk management framework to identify, assess, monitor, manage, and report its material and relevant risks.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10.6. Own Risk and Solvency Assessment [935.1 - 935.11] ( Article 10.6 added by Stats. 2013, Ch. 238, Sec. 1. ) ## 935.3. An insurer shall maintain a risk management framework to assist the insurer with identifying, assessing, monitoring, managing, and reporting on its material and relevant risks. This requirement may be satisfied if the insurance group of which the insurer is a member maintains a risk management framework applicable to the operations of the insurer. (Added by Stats. 2013, Ch. 238, Sec. 1. (AB 584) Effective January 1, 2014. Section operative January 1, 2015, pursuant to Section 935.11.)
  194. 935.4.

    ## 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 10.6. Own Risk and Solvency Assessment [935.1 - 935.11] ( Article 10.6 added by Stats. 2013, Ch. 238, Sec. 1. )

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    An insurer, or its insurance group member, must conduct an ORSA regularly and at least annually, and also when there are significant changes to risk.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10.6. Own Risk and Solvency Assessment [935.1 - 935.11] ( Article 10.6 added by Stats. 2013, Ch. 238, Sec. 1. ) ## 935.4. Subject to Section 935.6, an insurer, or the insurance group of which the insurer is a member, shall regularly conduct an ORSA consistent with a process comparable to the ORSA Guidance Manual. The ORSA shall be conducted no less than annually but also at any time when there are significant changes to the risk profile of the insurer or the insurance group of which the insurer is a member. (Added by Stats. 2013, Ch. 238, Sec. 1. (AB 584) Effective January 1, 2014. Section operative January 1, 2015, pursuant to Section 935.11.)
  195. 935.5.

    ## 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 10.6. Own Risk and Solvency Assessment [935.1 - 935.11] ( Article 10.6 added by Stats. 2013, Ch. 238, Sec. 1. )

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    An insurer must submit an ORSA Summary Report to the commissioner when requested, at most once a year, and a member of an insurance group only has to do so if the commissioner is the lead state commissioner. The report must be signed and may be satisfied by a comparable recent report in some cases; non-English reports need an English translation.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10.6. Own Risk and Solvency Assessment [935.1 - 935.11] ( Article 10.6 added by Stats. 2013, Ch. 238, Sec. 1. ) ## 935.5. (a) Upon the commissioner’s request, and no more than once each year, an insurer shall submit to the commissioner an ORSA Summary Report or any combination of reports that together contain the information described in the ORSA Guidance Manual, applicable to the insurer or the insurance group of which it is a member. Notwithstanding any request from the commissioner, if the insurer is a member of an insurance group, the insurer shall submit the report or reports required by this subdivision only if the commissioner is the lead state commissioner of the insurance group as determined by the procedures within the Financial Analysis Handbook adopted by the NAIC. (b) The report shall include a signature of the insurer’s or insurance group’s chief risk officer or other executive having responsibility for the oversight of the insurer’s enterprise risk management process, attesting to the best of his or her belief and knowledge that the insurer applies the enterprise risk management process described in the ORSA Summary Report and that a copy of the report has been provided to the insurer’s board of directors or the appropriate committee thereof. (c) An insurer may comply with subdivision (a) by providing the most recent and substantially similar report provided by the insurer, or by another member of an insurance group of which the insurer is a member, to the commissioner of another state, or to a supervisor or regulator of a foreign jurisdiction, provided that the report provides information that is comparable to the information described in the ORSA Guidance Manual. A report in a language other than English shall be accompanied by a translation of that report into the English language. (Added by Stats. 2013, Ch. 238, Sec. 1. (AB 584) Effective January 1, 2014. Section operative January 1, 2015, pursuant to Section 935.11.)
  196. 935.6.

    ## 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 10.6. Own Risk and Solvency Assessment [935.1 - 935.11] ( Article 10.6 added by Stats. 2013, Ch. 238, Sec. 1. )

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    Insurers meeting two premium-threshold tests are exempt from this article, but the commissioner can still require ORSA-related actions in some cases.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10.6. Own Risk and Solvency Assessment [935.1 - 935.11] ( Article 10.6 added by Stats. 2013, Ch. 238, Sec. 1. ) ## 935.6. (a) An insurer shall be exempt from the requirements of this article if both of the following apply: (1) The insurer has annual direct written and unaffiliated assumed premiums, including international direct and assumed premiums, but excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, less than five hundred million dollars ($500,000,000). (2) The insurance group of which the insurer is a member has annual direct written and unaffiliated assumed premiums, including international direct and assumed premiums, but excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, less than one billion dollars ($1,000,000,000). (b) If an insurer qualifies for exemption pursuant to paragraph (1) of subdivision (a), but the insurance group of which the insurer is a member does not qualify for exemption pursuant to paragraph (2) of subdivision (a), then the ORSA Summary Report that may be required pursuant to Section 935.5 shall include every insurer within the insurance group. This requirement may be satisfied by the submission of more than one ORSA Summary Report for any combination of insurers provided any combination of reports includes every insurer within the insurance group. (c) If an insurer does not qualify for exemption pursuant to paragraph (1) of subdivision (a), but the insurance group of which it is a member qualifies for exemption pursuant to paragraph (2) of subdivision (a), the only ORSA Summary Report that may be required pursuant to Section 935.5 shall be the report applicable to that insurer. (d) An insurer that does not qualify for exemption pursuant to subdivision (a) may apply to the commissioner for a waiver from the requirements of this article based upon unique circumstances. In deciding whether to grant the insurer’s request for waiver, the commissioner may consider the type and volume of business written, ownership and organizational structure of the insurer or insurance group, and any other factor the commissioner considers relevant to the insurer or insurance group of which the insurer is a member. If the insurer is part of an insurance group with insurers domiciled in more than one state, the commissioner shall coordinate with the lead state commissioner and with the other domiciliary commissioners in considering whether to grant the insurer’s request for a waiver. (e) Notwithstanding the exemptions stated in this section, the commissioner may do either one or both of the following: (1) The commissioner may require that an insurer maintain a risk management framework, conduct an ORSA, and file an ORSA Summary Report based on unique circumstances, which include, but are not limited to, the type and volume of business written, ownership and organizational structure, federal agency requests, and international supervisor requests. (2) The commissioner may require that an insurer maintain a risk management framework, conduct an ORSA, and file an ORSA Summary Report if the insurer (A) has Risk-Based Capital for a Company Action Level Event as described in Section 739.3, (B) meets one or more of the standards of an insurer that may be determined to be in hazardous financial condition as provided in Article 14.5 (commencing with Section 1065.1), and in regulations, or (C) otherwise exhibits qualities of a troubled insurer as determined by the commissioner. (f) If an insurer that qualifies for an exemption pursuant to subdivision (a) subsequently no longer qualifies for that exemption due to changes in premiums as reflected in the insurer’s most recent annual statement or in the most recent annual statements of the insurers within the insurance group of which the insurer is a member, the insurer shall have one year following the year the threshold in subdivision (a) is exceeded to comply with the requirements of this article. (Added by Stats. 2013, Ch. 238, Sec. 1. (AB 584) Effective January 1, 2014. Section operative January 1, 2015, pursuant to Section 935.11.)
  197. 935.7.

    ## 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 10.6. Own Risk and Solvency Assessment [935.1 - 935.11] ( Article 10.6 added by Stats. 2013, Ch. 238, Sec. 1. )

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    The commissioner must review the ORSA Summary Report and any extra information requests, using procedures similar to those used for multistate or global insurers and insurance groups.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10.6. Own Risk and Solvency Assessment [935.1 - 935.11] ( Article 10.6 added by Stats. 2013, Ch. 238, Sec. 1. ) ## 935.7. (a) The ORSA Summary Report shall be prepared consistent with the ORSA Guidance Manual, subject to the requirements of this section. Documentation and supporting information shall be maintained and made available upon examination or upon request of the commissioner. (b) The commissioner shall review the ORSA Summary Report submitted pursuant to Section 935.5 and any additional requests for information, using procedures similar to those currently used in the analysis and examination of multistate or global insurers and insurance groups. (Added by Stats. 2013, Ch. 238, Sec. 1. (AB 584) Effective January 1, 2014. Section operative January 1, 2015, pursuant to Section 935.11.)
  198. 935.8.

    ## 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 10.6. Own Risk and Solvency Assessment [935.1 - 935.11] ( Article 10.6 added by Stats. 2013, Ch. 238, Sec. 1. )

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    Certain ORSA-related documents held by the insurance commissioner are confidential and generally cannot be publicly disclosed or used in private civil 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 10.6. Own Risk and Solvency Assessment [935.1 - 935.11] ( Article 10.6 added by Stats. 2013, Ch. 238, Sec. 1. ) ## 935.8. (a) Documents, materials, or other information, including the ORSA Summary Report, in the possession of or control of the Department of Insurance that are obtained by, created by, or disclosed to the commissioner or any other person under this article, are recognized by this state as being proprietary and contain trade secrets. These documents, materials, or other information shall be confidential by law and privileged, shall not be subject to disclosure pursuant to the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code), and shall not be subject to subpoena or discovery, or admissible in evidence, in any private civil action. However, the commissioner is authorized to use those documents, materials, or other information in the furtherance of any regulatory or legal action brought as a part of the commissioner’s official duties. The commissioner shall not otherwise make those documents, materials, or other information public without the prior written consent of the insurer. (b) Neither the commissioner nor any other person who received documents, materials, or other ORSA-related information, including the ORSA Summary Report, through examination or otherwise, while acting under the authority of the commissioner, or with whom those documents, materials, or other information are shared pursuant to this article, shall be permitted or required to testify in any private civil action concerning those confidential documents, materials, or information, subject to subdivision (a). (c) In order to assist in the performance of the commissioner’s regulatory duties, the commissioner: (1) May, upon request, share documents, materials, or other ORSA-related information, including the confidential and privileged documents, materials, or information subject to subdivision (a), including proprietary and trade secret documents and materials, with other state, federal, and international financial regulatory agencies, including members of any supervisory college as described in Section 1215.7, with the NAIC, and with any third-party consultants designated by the commissioner, provided that the recipient agrees in writing to maintain the confidentiality and privileged status of the ORSA-related documents, materials, or other information and has verified in writing the legal authority to maintain confidentiality. (2) May receive documents, materials, or other ORSA-related information, including otherwise confidential and privileged documents, materials, or information, including proprietary and trade secret information or documents, from regulatory officials of other foreign or domestic jurisdictions, including members of any supervisory college as described in Section 1215.7, and from the NAIC, and shall maintain as confidential or privileged any documents, materials, or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material, or information. (3) Shall enter into a written agreement with the NAIC or a third-party consultant governing the sharing and the use of information provided pursuant to this article, consistent with this subdivision that shall do all of the following: (A) Specify procedures and protocols regarding the confidentiality and security of information shared with the NAIC or a third-party consultant pursuant to this article, including procedures and protocols for sharing by the NAIC with other state regulators from states in which the insurance group has domiciled insurers. The agreement shall provide that the recipient agrees in writing to maintain the confidentiality and privileged status of the ORSA-related documents, materials, or other information and has verified in writing the legal authority to maintain confidentiality. (B) Specify that ownership of information shared with the NAIC or a third-party consultant pursuant to this article remains with the commissioner and that the NAIC’s or a third-party consultant’s use of the information is subject to the direction of the commissioner. (C) Prohibit the NAIC or third-party consultant from storing the information shared pursuant to this article in a permanent database after the underlying analysis is completed. (D) Require prompt notice to be given to an insurer whose confidential information in the possession of the NAIC or a third-party consultant pursuant to this article when that information is subject to a request or subpoena to the NAIC or a third-party consultant for disclosure or production. (E) Require the NAIC or a third-party consultant to consent to intervention by an insurer in any judicial or administrative action in which the NAIC or a third-party consultant may be required to disclose confidential information about the insurer shared with the NAIC or a third-party consultant pursuant to this article. (F) In the case of an agreement involving a third-party consultant, provide for the insurer’s written consent. (d) The sharing of information and documents by the commissioner pursuant to this article shall not constitute a delegation of regulatory authority or rulemaking, and the commissioner is solely responsible for the administration, execution, and enforcement of the provisions of this article. (e) A waiver of any applicable privilege or claim of confidentiality in the documents, proprietary and trade secret materials, or other ORSA-related information shall not occur as a result of disclosure of the ORSA-related information or documents to the commissioner under this section or as a result of sharing as authorized in this article. (f) Documents, materials, or other information in the possession or control of the NAIC or a third-party consultant pursuant to this article shall be confidential by law and privileged, shall not be subject to disclosure pursuant to the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code), and shall not be subject to subpoena or discovery, or admissible in evidence, in any private civil action. (Amended by Stats. 2021, Ch. 615, Sec. 302. (AB 474) Effective January 1, 2022. Operative January 1, 2023, pursuant to Sec. 463 of Stats. 2021, Ch. 615.)
  199. 935.9.

    ## 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 10.6. Own Risk and Solvency Assessment [935.1 - 935.11] ( Article 10.6 added by Stats. 2013, Ch. 238, Sec. 1. )

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    An insurer that does not timely file the ORSA Summary Report without just cause must pay late filing fees under Section 924.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10.6. Own Risk and Solvency Assessment [935.1 - 935.11] ( Article 10.6 added by Stats. 2013, Ch. 238, Sec. 1. ) ## 935.9. Any insurer failing, without just cause, to timely file the ORSA Summary Report as required in this article shall be subject to the late filing fees set forth in Section 924. The commissioner may reduce the penalty if the insurer demonstrates to the commissioner that the imposition of the penalty would constitute a financial hardship to the insurer. (Added by Stats. 2013, Ch. 238, Sec. 1. (AB 584) Effective January 1, 2014. Section operative January 1, 2015, pursuant to Section 935.11.)
  200. 936.1.

    ## 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 10.8. Corporate Governance Disclosure Act [936.1 - 936.9] ( Article 10.8 added by Stats. 2015, Ch. 213, Sec. 1. )

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    This section says insurers domiciled in the state are subject to the article’s disclosure requirements, and the Insurance Commissioner is to receive a summary of corporate governance information.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 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 10.8. Corporate Governance Disclosure Act [936.1 - 936.9] ( Article 10.8 added by Stats. 2015, Ch. 213, Sec. 1. ) ## 936.1. (a) The purpose of this article is to provide the Insurance Commissioner a summary of an insurer or insurance group’s corporate governance structure, policies, and practices to permit the commissioner to gain and maintain an understanding of the insurer’s corporate governance framework and outline the requirements for completing a corporate governance annual disclosure with the Insurance Commissioner. The requirements of this article shall apply to all insurers domiciled in this state. (b) The Legislature finds and declares that the Corporate Governance Annual Disclosure and related information will contain confidential and sensitive information related to an insurer or insurance group’s internal operations and proprietary and trade secret information that, if made public, could potentially cause the insurer or insurance group competitive harm or disadvantage. (c) This article shall not be construed to prescribe or impose corporate governance standards and internal procedures beyond that which is required under applicable state corporate law. Notwithstanding the foregoing, this article shall not be construed to limit the commissioner’s authority or the rights or obligations of third parties, under Article 4 (commencing with Section 729) relating to the examination of insurers. (Added by Stats. 2015, Ch. 213, Sec. 1. (AB 553) Effective August 17, 2015.)

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