Insurance Code — Part 8 | INS — United States — California law | Esheria

Insurance Code

Part 8 of 23 · provisions 1,401–1,600

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

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

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Provisions of Insurance Code

Showing 200 of 4,461

  1. 11022.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 3. Organization [11010 - 11033] ( Article 3 added by Stats. 1951, Ch. 1193. )

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    An affidavit from a society officer or authorized mailer stating that a notice or document was properly addressed and mailed counts as prima facie evidence that it was furnished to the addressees.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 3. Organization [11010 - 11033] ( Article 3 added by Stats. 1951, Ch. 1193. ) ## 11022. The affidavit of any officer of the society or of any one authorized by it to mail any notice or document, stating facts which show that same has been duly addressed and mailed, shall be prima facie evidence that such notice or document has been furnished the addressees. (Repealed and added by Stats. 1951, Ch. 1193.)
  2. 11023.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 3. Organization [11010 - 11033] ( Article 3 added by Stats. 1951, Ch. 1193. )

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    A society may admit eligible people to benefit membership, and members seeking additional benefits more than six months later must complete another medical exam or declaration of insurability if the society requires it.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 3. Organization [11010 - 11033] ( Article 3 added by Stats. 1951, Ch. 1193. ) ## 11023. A society may admit to benefit membership any person not less than 15 years of age at nearest birthday who has been examined by a legally qualified physician, and whose examination has been supervised and approved in accordance with the laws of the society, or who has made declaration of insurability acceptable to the society in accordance with its established underwriting standards. Any such member who shall apply for additional benefits more than six months after becoming a benefit member shall pass an additional medical examination or make an additional declaration of insurability as required by the society. (Repealed and added by Stats. 1951, Ch. 1193.)
  3. 11024.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 3. Organization [11010 - 11033] ( Article 3 added by Stats. 1951, Ch. 1193. )

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    A person admitted to benefit membership before age 21 is bound by the society’s application, certificate, laws, and rules, and gets the same membership rights and privileges as if they had already reached majority.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 3. Organization [11010 - 11033] ( Article 3 added by Stats. 1951, Ch. 1193. ) ## 11024. Any person admitted to benefit membership in such society prior to attaining the full age of 21 years shall be bound by the terms of the application and certificate and by all the laws and rules of the society, and shall be entitled to all the rights and privileges of membership therein, to the same extent as though the age of majority had been attained at the time of application. (Repealed and added by Stats. 1951, Ch. 1193.)
  4. 11025.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 3. Organization [11010 - 11033] ( Article 3 added by Stats. 1951, Ch. 1193. )

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    A society may accept general or social members, but those members have no voice or vote in managing the society’s insurance affairs.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 3. Organization [11010 - 11033] ( Article 3 added by Stats. 1951, Ch. 1193. ) ## 11025. A society may accept general or social members who shall have no voice or vote in the management of its insurance affairs. (Repealed and added by Stats. 1951, Ch. 1193.)
  5. 11026.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 3. Organization [11010 - 11033] ( Article 3 added by Stats. 1951, Ch. 1193. )

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    A domestic society may amend its governing documents through its supreme legislative or governing body, and may use a referendum if its documents allow it.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 3. Organization [11010 - 11033] ( Article 3 added by Stats. 1951, Ch. 1193. ) ## 11026. A domestic society may amend its articles of incorporation, constitution, or laws, in accordance with the provisions thereof, by action of its supreme legislative or governing body at any regular or special meeting. If the articles of incorporation, constitution, or laws so provide, amendment may be made by referendum. A referendum may be held in accordance with the provisions of the society’s articles of incorporation, constitution, or laws by the vote of the voting members of the society, by the vote of delegates or representatives of voting members or by the vote of local lodges or branches. No amendment submitted for adoption by referendum shall be adopted unless, within six months from the date of the amendment’s submission, a majority of the members of the society have signified their consent to the amendment by one of the methods herein specified. (Amended by Stats. 1995, Ch. 166, Sec. 5. Effective January 1, 1996.)
  6. 11027.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 3. Organization [11010 - 11033] ( Article 3 added by Stats. 1951, Ch. 1193. )

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    A domestic society’s amendment does not take effect unless the commissioner approves it, or fails to disapprove it within 60 days after filing.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 3. Organization [11010 - 11033] ( Article 3 added by Stats. 1951, Ch. 1193. ) ## 11027. No amendment to the articles of incorporation, constitution or laws of any domestic society shall take effect unless approved by the commissioner who shall approve such amendment if he finds that it has been duly adopted and is not inconsistent with any requirement of the laws of this State or with the character, objects and purposes of the society. Unless the commissioner shall disapprove any such amendment within 60 days after the filing of same, such amendment shall be considered approved. The approval or disapproval of the commissioner shall be in writing and mailed to the secretary or corresponding officer of the society at its principal office. In case he disapproves such amendment, the reasons therefor shall be stated in such written notice. (Added by Stats. 1951, Ch. 1193.)
  7. 11028.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 3. Organization [11010 - 11033] ( Article 3 added by Stats. 1951, Ch. 1193. )

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    After the commissioner approves amendments, the society must give all members the amendments or a synopsis within 90 days.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 3. Organization [11010 - 11033] ( Article 3 added by Stats. 1951, Ch. 1193. ) ## 11028. Within 90 days from the approval thereof by the commissioner, all such amendments, or a synopsis thereof, shall be furnished to all members of the society either by being published in the official organ of the society or by being sent by mail. The affidavit of any officer of the society or of anyone authorized by it to mail any amendments or synopsis thereof, stating facts which show that same has been duly addressed and mailed, shall be prima facie evidence that such amendments or synopsis thereof have been furnished the addressee. (Added by Stats. 1951, Ch. 1193.)
  8. 11029.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 3. Organization [11010 - 11033] ( Article 3 added by Stats. 1951, Ch. 1193. )

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    Foreign societies transacting business under this chapter must file certified copies of any amendments or additions to their constitution and laws with the commissioner within 90 days after enactment.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 3. Organization [11010 - 11033] ( Article 3 added by Stats. 1951, Ch. 1193. ) ## 11029. Every foreign society transacting business under this chapter shall file with the commissioner a duly certified copy of all amendments of, or additions to, its constitution and laws within 90 days after the enactment of the same. (Added by Stats. 1951, Ch. 1193.)
  9. 1103.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 17. Loans and Investments [1100 - 1107.1] ( Article 17 enacted by Stats. 1935, Ch. 145. )

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    An insurer harmed by violations of sections 1101, 1102, or 1104 may recover compensatory damages from the responsible officer, director, trustee, or other person.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 17. Loans and Investments [1100 - 1107.1] ( Article 17 enacted by Stats. 1935, Ch. 145. ) ## 1103. Whenever an insurer is injured or made to suffer loss by reason of any violation of the provisions of sections 1101, 1102 or 1104, such insurer may recover from the guilty officer, director, trustee or other person, or any one or more of them jointly or severally damages sufficient to compensate such insurer for such loss. (Amended by Stats. 1937, Ch. 736.)
  10. 11030.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 3. Organization [11010 - 11033] ( Article 3 added by Stats. 1951, Ch. 1193. )

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    Certified printed copies of a domestic or foreign society’s constitution or laws count as prima facie evidence that they were legally adopted.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 3. Organization [11010 - 11033] ( Article 3 added by Stats. 1951, Ch. 1193. ) ## 11030. Printed copies of the constitution or laws of any domestic or foreign society as amended, certified by the secretary or corresponding officer of the society shall be prima facie evidence of the legal adoption thereof. (Added by Stats. 1951, Ch. 1193.)
  11. 11031.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 3. Organization [11010 - 11033] ( Article 3 added by Stats. 1951, Ch. 1193. )

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    A society may create and run certain charitable or benevolent institutions, and may own or lease property for that purpose.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 3. Organization [11010 - 11033] ( Article 3 added by Stats. 1951, Ch. 1193. ) ## 11031. A society may create, maintain and operate hospitals, asylums, homes, sanitariums or other charitable or benevolent institutions for the benefit of its sick, disabled, aged or distressed members and their families and dependents in accordance with the provisions of its laws; and for such purpose it may own, hold or lease personal property or real property located within or without this State, with necessary buildings thereon. Such property shall not be deemed an admitted asset of the society. (Added by Stats. 1951, Ch. 1193.)
  12. 11032.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 3. Organization [11010 - 11033] ( Article 3 added by Stats. 1951, Ch. 1193. )

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    Institutions may charge a reasonable fee or provide maintenance, treatment, and attendance free, but they may not be run for profit.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 3. Organization [11010 - 11033] ( Article 3 added by Stats. 1951, Ch. 1193. ) ## 11032. Maintenance, treatment and proper attendance in any such institution may be furnished free or a reasonable charge may be made therefor, but no such institution shall be operated for profit. Excepting a society relieved of the requirement of maintaining a separation of funds pursuant to the provisions of Section 11120, no part of the cost or expense of creating, maintaining or operating such institution shall be defrayed or paid out of the mortuary, sick or disability funds of a society. The society shall maintain a separate accounting of any disbursements under this section and report them in its annual statement. No society shall own or operate funeral homes or undertaking establishments. (Added by Stats. 1951, Ch. 1193.)
  13. 11033.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 3. Organization [11010 - 11033] ( Article 3 added by Stats. 1951, Ch. 1193. )

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    A society may pay members from certain special funds, but if the payments could count as insurance benefits, it cannot charge separately, issue payment documents, treat the payments as a member right, or advertise them that way.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 3. Organization [11010 - 11033] ( Article 3 added by Stats. 1951, Ch. 1193. ) ## 11033. A society maintaining special funds of the nature set forth in Section 11122 may make payments from such funds to its members compatible with the type thereof; provided that, if such payments are of such a nature that they could constitute benefits within the classes of insurance set forth in Section 11041, the society making such payments may not: (a) Make any separate charge therefor; (b) Issue any certificate, policy or other document promising such payments; (c) Provide in its constitution, by-laws or any other document that such payments may be received by any member of such society as a matter of right; nor (d) Advertise such payments as insurance or as payments to which the member has any right. No such special funds shall be an admitted asset of the society in excess of the amount of the liabilities of such special fund. The society shall maintain a separate accounting of any disbursements under this section and report them in its annual statement. (Added by Stats. 1951, Ch. 1193.)
  14. 1104.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 17. Loans and Investments [1100 - 1107.1] ( Article 17 enacted by Stats. 1935, Ch. 145. )

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    An admitted insurer must not make loans to its officers, directors, trustees, or others who manage its funds, and those persons must not accept such loans, except for policy loans and certain employee premium loans.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 17. Loans and Investments [1100 - 1107.1] ( Article 17 enacted by Stats. 1935, Ch. 145. ) ## 1104. An admitted insurer shall not make any loan, other than a policy loan, to any officer, director, trustee or other person having authority in the management of its funds, nor shall such officer, director, trustee or other person accept any such loan. This section does not prohibit a loan to, or for the benefit of, an employee for the purpose of paying the premiums on a life insurance policy on the life of such employee. (Amended by Stats. 1963, Ch. 1929.)
  15. 1104.1.

    ## 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 17. Loans and Investments [1100 - 1107.1] ( Article 17 enacted by Stats. 1935, Ch. 145. )

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    The commissioner may require a domestic admitted insurer to report its money and securities, where they are deposited, and why any are kept outside the State. If, after notice and hearing, the commissioner finds excess deposits outside the State, the commissioner may order the insurer to move those funds and securities into the State and stop unnecessary transfers out of the State while that transfer is pending.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 17. Loans and Investments [1100 - 1107.1] ( Article 17 enacted by Stats. 1935, Ch. 145. ) ## 1104.1. The commissioner may from time to time require any domestic admitted insurer to report to him, in such detail as he may prescribe, the moneys and securities owned by it, the place where such moneys and securities are deposited and, in the case of moneys and securities deposited outside the State, the reason for maintaining each such deposit outside the State. Whenever the commissioner after hearing following notice, finds that such moneys or securities are maintained on deposit outside the State in excess of legal requirements and of the reasonable needs of the business of such insurer, he may order such insurer to transfer to, and maintain in, this State money and securities to the extent of such excess and to cease, pending such transfer, from unnecessary transfers of moneys and securities from this State to any place outside this State. (Added by Stats. 1947, Ch. 1073.)
  16. 1104.2.

    ## 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 17. Loans and Investments [1100 - 1107.1] ( Article 17 enacted by Stats. 1935, Ch. 145. )

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    Certain large stockholders, directors, and officers of a domestic insurer must file ownership statements with the Insurance 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 17. Loans and Investments [1100 - 1107.1] ( Article 17 enacted by Stats. 1935, Ch. 145. ) ## 1104.2. Every person who is directly or indirectly the beneficial owner of more than 10 percent of any class of stock of a domestic insurer or who is a director or officer of such insurer shall file in the office of the Insurance Commissioner on or before the 31st day of October, 1965, or within 10 days after he becomes such a beneficial owner, director or officer, a statement, in such form as the commissioner may prescribe, of the amount of all stock of such insurer of which he is the beneficial owner, and within 10 days after the close of each calendar month thereafter, if there has been a change in such ownership during such month, shall file in the office of the commissioner a statement, in such form as the commissioner shall prescribe, indicating his ownership at the close of the calendar month and such changes in his ownership as have occurred during such calendar month. (Added by Stats. 1965, Ch. 38.)
  17. 1104.3.

    ## 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 17. Loans and Investments [1100 - 1107.1] ( Article 17 enacted by Stats. 1935, Ch. 145. )

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    Certain short-swing profits from insurer stock trades may be recovered by the 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 17. Loans and Investments [1100 - 1107.1] ( Article 17 enacted by Stats. 1935, Ch. 145. ) ## 1104.3. For the purpose of preventing the unfair use of information which may have been obtained by any beneficial owner of an insurer, or director or officer thereof, described in Section 1104.2, by reason of his relationship to such insurer, any profit realized by him from any purchase and sale, or any sale and purchase, of any stock of such insurer within any period of less than six months, unless such stock was acquired in good faith in connection with a debt previously contracted, shall inure to, and be recoverable by, the insurer, irrespective of the intent of the beneficial owner, director or officer who entered into the transaction of holding the stock purchased or not repurchasing the stock sold for a period exceeding six months. Suit to recover such profit may be instituted at law or in equity in any court of competent jurisdiction by the insurer or by the owner of any stock of the insurer in the name of and on behalf of the insurer if the insurer shall fail or refuse to bring such suit within 60 days after request or shall fail diligently to prosecute the same thereafter; but no such suit shall be brought more than two years after the date such profit was realized. This section shall not be construed to cover any transaction where a beneficial owner was not such both at the time of the purchase and sale, or the sale and purchase, of the stock involved, or any transaction or transactions which the commissioner may by rules and regulations exempt as not within the scope of this section or Section 1104.2. (Amended by Stats. 1967, Ch. 1074.)
  18. 1104.4.

    ## 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 17. Loans and Investments [1100 - 1107.1] ( Article 17 enacted by Stats. 1935, Ch. 145. )

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    Certain insurer beneficial owners, directors, and officers must not sell insurer stock in prohibited circumstances, and they must meet delivery or deposit timing rules after a sale unless they can prove a good-faith inability or undue inconvenience/expense.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 17. Loans and Investments [1100 - 1107.1] ( Article 17 enacted by Stats. 1935, Ch. 145. ) ## 1104.4. It shall be unlawful for any beneficial owner of an insurer, or director or officer thereof, described in Section 1104.2, to, directly or indirectly, sell any stock of such insurer if he or his principal does not own the stock sold, or, if he or his principal owns the stock, he does not deliver it against such sale within 20 days thereafter, or does not within five days after such sale deposit it in the mails or other usual channels of transportation; but no person shall be deemed to have violated this section if he proves that notwithstanding the exercise of good faith he was unable to make such delivery or deposit within such time, or that to do so would cause undue inconvenience or expense. (Added by Stats. 1965, Ch. 38.)
  19. 1104.5.

    ## 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 17. Loans and Investments [1100 - 1107.1] ( Article 17 enacted by Stats. 1935, Ch. 145. )

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    Section 1104.5 exempts certain dealer stock transactions in domestic insurers from Sections 1104.3 and 1104.4, and lets the commissioner set related terms and conditions.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 17. Loans and Investments [1100 - 1107.1] ( Article 17 enacted by Stats. 1935, Ch. 145. ) ## 1104.5. The provisions of Section 1104.3 shall not apply to any purchase and sale, or sale and purchase, and the provisions of Section 1104.4 shall not apply to any sale of stock of a domestic insurer (not then or theretofore held in an investment account), by a dealer in the ordinary course of his business and incidental to the establishment or maintenance by him of a primary or secondary market (other than on an exchange as defined in the Securities Exchange Act of 1934) for such stock. The commissioner may, by such rules and regulations as he deems necessary or appropriate in the public interest, define and prescribe terms and conditions with respect to stock held in an investment account and transactions made in the ordinary course of business and incident to the establishment or maintenance of a primary or secondary market. (Added by Stats. 1965, Ch. 38.)
  20. 1104.6.

    ## 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 17. Loans and Investments [1100 - 1107.1] ( Article 17 enacted by Stats. 1935, Ch. 145. )

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    Sections 1104.2, 1104.3, and 1104.4 do not apply to foreign or domestic arbitrage transactions unless those transactions violate commissioner-adopted 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 17. Loans and Investments [1100 - 1107.1] ( Article 17 enacted by Stats. 1935, Ch. 145. ) ## 1104.6. The provisions of Sections 1104.2, 1104.3, and 1104.4 shall not apply to foreign or domestic arbitrage transactions unless made in contravention of such rules and regulations as the commissioner may adopt in order to carry out the purposes of this article. (Added by Stats. 1965, Ch. 38.)
  21. 1104.7.

    ## 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 17. Loans and Investments [1100 - 1107.1] ( Article 17 enacted by Stats. 1935, Ch. 145. )

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    This section defines “stock” for certain insurance code sections and lets the commissioner classify similar securities as stock by regulation.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 17. Loans and Investments [1100 - 1107.1] ( Article 17 enacted by Stats. 1935, Ch. 145. ) ## 1104.7. The term “stock” as it is used in Sections 1104.2, 1104.3, 1104.4, 1104.5 and 1104.8 means any stock or similar security, or any security, convertible, with or without consideration, into such stock or carrying any warrant or right to subscribe to or purchase such stock, or any such warrant or right, or any other security which the commissioner shall deem to be of similar nature and consider necessary or appropriate, by such rules and regulations as he may prescribe in the public interest or for the protection of investors, to treat as stock. (Added by Stats. 1965, Ch. 38.)
  22. 1104.8.

    ## 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 17. Loans and Investments [1100 - 1107.1] ( Article 17 enacted by Stats. 1935, Ch. 145. )

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    A domestic insurer is exempt from Sections 1104.2, 1104.3, and 1104.4 if its stock is registered or must be registered under Section 12 of the Securities Exchange Act of 1934, or if it has no class of stock held of record by 100 or more persons on the relevant last business day.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 17. Loans and Investments [1100 - 1107.1] ( Article 17 enacted by Stats. 1935, Ch. 145. ) ## 1104.8. The provisions of Sections 1104.2, 1104.3, and 1104.4 shall not apply to a domestic insurer if: (a) Its stock shall be registered, or shall be required to be registered, pursuant to Section 12 of the Securities Exchange Act of 1934, as amended; or if (b) Such domestic insurer shall not have any class of its stock held of record by 100 or more persons on the last business day of the year next preceding the year in which stock of the insurer would be subject to the provisions of Sections 1104.2, 1104.3, and 1104.4 except for the provisions of this subdivision. (Added by Stats. 1965, Ch. 38.)
  23. 1104.9.

    ## 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 17. Loans and Investments [1100 - 1107.1] ( Article 17 enacted by Stats. 1935, Ch. 145. )

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    This section lets certain insurers keep securities and money with approved custodians and depositories, but it sets approval, location, fee, equity, and transfer 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 17. Loans and Investments [1100 - 1107.1] ( Article 17 enacted by Stats. 1935, Ch. 145. ) ## 1104.9. (a) (1) As used in this section, “qualified custodian” means: (A) commercial banks (as defined in Section 105 of the Financial Code), savings and loan associations (as defined in Section 5102 of the Financial Code), and trust companies (other than trust departments of title insurance companies), or any entity approved by the commissioner as a qualified custodian; (B) that is either (i) domiciled and has a principal place of business in this state or (ii) a national banking association with a trust office located in this state; and (C) that either has a net worth of at least one hundred million dollars ($100,000,000) or is able to demonstrate to the satisfaction of the commissioner that it is financially secure. The commissioner may consider, among other factors, evidence of the following in order to determine whether a custodian is financially secure for the purpose of this subdivision: (i) its obligations under an agreement approved by the commissioner pursuant to subdivision (c) are guaranteed by its parent holding company, (ii) its parent holding company has a net worth of at least one hundred million dollars ($100,000,000), or (iii) it is a member of a holding company system with a net worth of at least one hundred million dollars ($100,000,000). (2) (A) As used in this section, “qualified depository” means an entity that is located in this state or a reciprocal state and is (i) a depository that provides for the long-term immobilization of securities or a clearing corporation that is also a depository, and that in either case has been approved by or registered with the United States Securities and Exchange Commission, (ii) a Federal Reserve bank, or (iii) an entity approved by the commissioner as a qualified depository. (B) A “qualified depository” may also include an entity that is located outside the United States, if it is a securities depository and clearing agency, incorporated or organized under the laws of a country other than the United States, (i) that operates a transnational system for securities or equivalent book entries (specifically Euroclear and Cedel, or successors to all or substantially all of their operations), or (ii) that operates a central system for securities or equivalent book entries, but solely for securities issued by, or by entities within, the country in which the securities depository and clearing agency is incorporated or organized. The depository shall meet all qualifying requirements imposed by this section upon Euroclear or Cedel. (3) As used in this section, “qualified subcustodian” means an entity located in this state or a reciprocal state (A) that holds securities of the domestic insurer, and maintains an account through which the securities are held, in this state or a reciprocal state and (B) that has shareholder equity of at least one hundred million dollars ($100,000,000) or is able to demonstrate to the satisfaction of the commissioner that it is financially secure. The qualified subcustodian shall be: (A) a commercial bank, a savings and loan association, or a trust company (other than trust departments of title insurance companies); (B) a subsidiary of a qualified custodian; or (C) any entity approved by the commissioner as a qualified subcustodian. The commissioner may consider, among other factors, evidence of the following in order to determine whether a subcustodian is financially secure for the purpose of this subdivision: (i) its obligations are guaranteed by its parent company, (ii) its parent holding company has shareholder equity of at least one hundred million dollars ($100,000,000), or (iii) it is a member of a holding company system with shareholder equity of at least one hundred million dollars ($100,000,000). A “qualified subcustodian” may also include an entity that is located outside the United States that is used by the domestic insurer for the purpose of obtaining access to a qualified depository located outside the United States. The qualified foreign subcustodian shall be a banking institution or trust company, incorporated or organized under the laws of a country other than the United States, that is regulated by that country’s government or an agency thereof, and that has shareholders’ equity in excess of two hundred million dollars ($200,000,000), whether in United States dollars or the equivalent of United States dollars, as of the close of its most recently completed fiscal year; or a majority-owned direct or indirect subsidiary of a qualified United States bank or bank holding company, if the subsidiary is incorporated or organized under the laws of a country other than the United States and has shareholders’ equity in excess of one hundred million dollars ($100,000,000), whether in United States dollars or the equivalent of United States dollars, as of the close of its most recently completed fiscal year; or is able to demonstrate to the satisfaction of the commissioner that it is financially secure. The commissioner may consider, among other factors, evidence of the following in order to determine whether a qualified foreign subcustodian is financially secure for purposes of this subdivision: (i) its obligations are guaranteed by its parent company, (ii) its parent holding company has shareholder equity of at least two hundred million dollars ($200,000,000), or (iii) it is a member of a holding company system with shareholder equity of at least two hundred million dollars ($200,000,000). (4) As used in this section, “subsidiary” means: (A) an entity all of whose voting securities (other than director qualifying shares, if any) are owned, directly or indirectly, by a qualified custodian; or (B) any affiliated entity approved by the commissioner as a subsidiary of a qualified custodian. For the purpose of this section, an affiliated entity means an entity that (A) controls or is controlled, either directly or indirectly or through one or more intermediaries, by a qualified custodian or (B) is under the common control, directly or indirectly, as or with a qualified custodian. (5) As used in this section, “entity approved by the commissioner as a qualified custodian,” “entity approved by the commissioner as a qualified depository,” “entity approved by the commissioner as a qualified subcustodian,” and “entity approved by the commissioner as a subsidiary of a qualified custodian” mean those entities that meet the conditions or standards established by the commissioner. The commissioner shall charge and collect in advance a one-time fee of two thousand two hundred forty-one dollars ($2,241) to review an application for approval of any entity pursuant to this section. (6) As used in this section, “reciprocal state” has the same meaning as in subdivision (f) of Section 1064.1. (7) As used in this section, “moneys” means cash held incidental to securities transactions occurring in the ordinary course of business with respect to securities held pursuant to the custodial agreements under this section. (8) (A) Except as provided in subparagraph (B), as used in this section, “insurer,” “domestic insurer,” and “domestic admitted insurer” mean any insurer, other than a domestic life insurer that is incorporated or that has its principal place of business in this state. Except as provided in subparagraph (B), no portion of this section applies to domestic life insurers nor shall this section affect the interpretation of any other portion of this code with respect to domestic life insurers nor is it intended to create a precedent for the application of its provisions to those insurers. However, the exclusion of domestic life insurers from this section shall not be construed to diminish the commissioner’s existing authority over those insurers under any other provision of this code. (B) Domestic life insurers that are wholly owned by any insurer other than a domestic life insurer or are part of an insurance holding company system whose other insurer affiliates are not domestic life insurers may elect to be subject to this section by affirmatively stating that election in the statement otherwise required to be filed by that system pursuant to Section 1215.4. (b) Notwithstanding Section 1104.1, a domestic admitted insurer may maintain its securities and moneys in a reciprocal state, subject to the requirements of this section, through a custodian account located in California in or with a qualified custodian, and that qualified custodian may maintain those securities or moneys in a qualified depository or qualified subcustodian, either or both of which may be located in a reciprocal state. In addition, a domestic insurer that has foreign investments or any other investments that require delivery outside of the United States upon sale or maturity that qualify under Section 1240, 1241, or 10506, or any other provision of this code, may maintain those securities or moneys in or with a qualified depository located in a jurisdiction outside the United States. However, the aggregate amount of general account investments so deposited shall not exceed the lesser of 5 percent of the total admitted assets of the insurer or 25 percent of the excess of admitted assets over the sum of paid-up capital, liabilities, and surplus required by Section 700.02. However, unless exempted by the commissioner, not more than 50 percent of that amount of assets that an insurer is authorized to invest pursuant to Section 1241 or 1241.1 may be maintained in any single country in a qualified depository as defined in clause (ii) of paragraph (2) of subdivision (a) and as to life companies not more than 12.5 percent of that amount of assets that an insurer is authorized to invest pursuant to Section 1241 or 1241.1 may be maintained in any single country in a qualified depository as defined in clause (ii) of paragraph (2) of subdivision (a). The percentage or dollar value of admitted assets and paid-up capital and liabilities shall be determined by the insurer’s last preceding annual statement of conditions and affairs made as of the preceding December 31 that has been filed with the commissioner pursuant to law. A broker or agent, as defined in the Federal Securities Exchange Act of 1934 (15 U.S.C. Sec. 78c et seq.), may not serve as a qualified custodian, qualified subcustodian, or qualified depository under this section. However, no otherwise qualified custodian or subcustodian shall be disqualified on account of its activities as a broker or dealer, as so defined, when the activities are incidental to its custodial or other business. (c) Securities shall not be deposited in or with a qualified custodian, qualified depository, or qualified subcustodian except as authorized by an agreement between the insurer and the qualified custodian, if the agreement is satisfactory to and has been approved by the commissioner. The agreement shall require that the securities be held by the qualified custodian for the benefit of the insurer and that the books and records of the qualified custodian shall so designate. The agreement shall further require that beneficial title to the securities remain in the insurer and shall require that the qualified subcustodian and qualified depository be the agents of the qualified custodian. The agreement shall also specifically require that the qualified custodian shall exercise the standard of care of a professional custodian engaged in the banking or trust company industry and having professional expertise in financial and securities processing transactions and custody would observe in these affairs. This section does not affect the burden of proof under applicable law with respect to the assertion of liability in any claim, action, or dispute alleging any breach of, or failure to observe, that standard of care. (d) An agreement between the qualified custodian and the insurer shall not be approved by the commissioner unless the qualified custodian agrees therein to comply with this section. Except when the agreement is submitted in conjunction with an application for an original certificate of authority or variable life and variable annuity qualification, a fee of seven hundred forty-eight dollars ($748) shall be paid to the commissioner at the time of filing the agreement for approval. However, a fee shall not be required if the form of the agreement has been previously submitted for approval and approved by the commissioner as certified by the insurer and qualified custodian submitting the agreement to the commissioner. The agreement shall be deemed approved unless, within 60 days after receipt by the commissioner of that agreement and any required filing fee, the commissioner has disapproved the agreement in writing citing specific reasons for disapproval. (e) Notwithstanding the maintenance of securities with an out-of-state qualified depository or qualified subcustodian pursuant to agreement, if the commissioner has reasonable cause to believe that the domestic insurer (1) is conducting its business and affairs in a manner as to threaten to render it insolvent, or (2) is in a hazardous condition or is conducting its business and affairs in a manner that is hazardous to its policyholders, creditors, or the public, or (3) has committed or is committing or has engaged or is engaging in any act that would constitute grounds for rendering it subject to conservation or liquidation proceedings, or if the commissioner determines that irreparable loss and injury to the property and business of the domestic insurer has occurred or may occur unless the commissioner acts immediately, then the commissioner may, without hearing, order the insurer and the qualified custodian promptly to effect the transfer of the securities back to a qualified custodian, qualified subcustodian, or qualified depository located in this state from any qualified depository or qualified subcustodian located outside of this state (the transfer order). Upon receipt of the transfer order, the qualified custodian shall promptly effect the return of the securities. Notwithstanding the pendency of any hearing or action provided for in subdivision (f), the transfer order shall be complied with by those persons subject to that order. Any challenge to the validity of the transfer order shall be made in accordance with subdivision (f). It is the responsibility of both the insurer and the qualified custodian to oversee that compliance with the transfer order is completed as expeditiously as possible. Upon receipt of a transfer order, there shall be no trading of the securities without specific instructions from the commissioner until the securities are received in this state, except to the extent trading transactions are in process on the day the transfer order is received by the insurer and the failure to complete the trade may result in loss to the insurer’s account. Issuance of a transfer order does not affect the qualified custodian’s liabilities with regard to the securities that are the subject of the order. (f) At the same time the transfer order is served, the commissioner shall issue and also serve upon the insurer a notice of hearing to be held at a time and place fixed therein which shall not be less than 20 nor more than 45 days after the service thereof. Upon request of the insurer and agreement of the department, the hearing may be held within a shorter time but in no event less than 10 days after the service of the notice of hearing. The transfer order and notice of hearing may be served by certified mail, express mail, messenger, telegram, or any other means calculated to give prompt actual notice to (1) the California office of the insurer designated in the agreement, its home office as shown on its most recently filed annual or quarterly statement, or its California agent for service of process; and (2) the California office of the qualified custodian designated in the agreement. If, as a result of the hearing, any of the statements as to conduct, conditions, or grounds for the transfer order are found to be true, or if other conditions or grounds are discovered or become known at the hearing and are found to be true, the commissioner shall affirm the transfer order and may make additional order or orders, pertaining to the transfer order, as may be reasonably necessary. The insurer subject to the transfer order is entitled to judicial review in the state of the commissioner’s order issued as a result of the hearing. Alternatively, at any time prior to the commencement of the hearing on the transfer order, the insurer may waive the hearing and have judicial review in this state of the transfer order by petition for writ of mandate and declaratory relief without first exhausting administrative remedies or procedures. In that event the insurer is not entitled to any extraordinary remedies prior to trial. No person other than the insurer has standing at the hearing by the commissioner or for any judicial review of the transfer order. (Amended by Stats. 2020, Ch. 184, Sec. 5. (SB 1255) Effective January 1, 2021.)
  24. 11040.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 4. Benefits [11040 - 11044] ( Article 4 added by Stats. 1951, Ch. 1193. )

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    Benefits of a society must be paid only from the society’s funds, and the society’s officers and members are not personally liable for them.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 4. Benefits [11040 - 11044] ( Article 4 added by Stats. 1951, Ch. 1193. ) ## 11040. All benefits provided for in the laws and agreements of a society shall be payable only out of its funds in accordance with its laws. The officers and members of the supreme, grand or any subordinate body of a society shall not be individually liable therefor. (Repealed and added by Stats. 1951, Ch. 1193.)
  25. 11041.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 4. Benefits [11040 - 11044] ( Article 4 added by Stats. 1951, Ch. 1193. )

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    A society may issue benefit certificates and pay certain life or disability insurance benefits to members, but it must specify who may receive or be covered by benefits and ensure the member is the applicant or insured for all coverages.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 4. Benefits [11040 - 11044] ( Article 4 added by Stats. 1951, Ch. 1193. ) ## 11041. An admitted society may, by the issuance of certificates, provide for payment to its members of insurance benefits contained within the following classes: (a) All forms of life insurance, as defined in Section 101, except group insurance and funeral insurance as defined in Section 10240. (b) All forms of disability insurance, as defined in Section 106, except group insurance. Except as otherwise provided in this chapter, benefits may be paid in any manner compatible with their nature. Any benefits authorized in this section, or combinations thereof, may be provided in the same or separate certificates. A society shall specify in its laws or rules those persons who may receive benefits or be covered by benefits through the society. For all coverages, the member shall be the applicant or the insured provided that if the member is the applicant, there shall be a bona fide familial or other dependent relationship between the member and the insured or beneficiary. Every society, by its constitution, laws, or rules, may limit the scope of beneficiaries only to the extent required by federal law governing fraternal benefit societies. The society may specify the terms and conditions on which benefit certificates may be assigned. (Amended by Stats. 1995, Ch. 166, Sec. 6. Effective January 1, 1996.)
  26. 11042.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 4. Benefits [11040 - 11044] ( Article 4 added by Stats. 1951, Ch. 1193. )

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    A society may offer benefits for children under 21 and may operate children’s branches, but it cannot require local-lodge membership or initiation for those children.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 4. Benefits [11040 - 11044] ( Article 4 added by Stats. 1951, Ch. 1193. ) ## 11042. A society may provide for benefits on the lives of children under 21 years of age and under the minimum age for adult membership under the laws of the society at time of application therefor, upon the application of some adult person, as its laws or rules may provide, which benefits shall be in accordance with the provisions of Section 11041. A society may, at its option, organize and operate branches for such children. Membership and initiation in local lodges shall not be required of such children, nor shall they have a voice in the management of the society. Children insured under certificates issued pursuant to this section may be transferred to and become members of the adult branch of the society upon attaining the minimum age for adult membership under the laws of the society. If a society maintains a separate juvenile fund, it shall have the right to provide in its laws or rules for the payment to the society’s expense or general fund; provided, that no such society shall transfer to such funds amounts collected for juvenile mortuary benefits and the net accretions thereto. A society shall have full power to provide for the fixing and readjusting, from time to time, of the premiums and the designation and changing of designation of beneficiaries and to provide in all other respects for the regulation, government and control of such certificates and all rights, obligations and liabilities incident thereto and in connection therewith. (Amended by Stats. 1959, Ch. 49.)
  27. 11043.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 4. Benefits [11040 - 11044] ( Article 4 added by Stats. 1951, Ch. 1193. )

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    A society may offer nonforfeiture benefits, cash surrender values, certificate loans, and other options, but for certain certificates it must meet minimum value rules and a capped surrender charge.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 4. Benefits [11040 - 11044] ( Article 4 added by Stats. 1951, Ch. 1193. ) ## 11043. A society may grant nonforfeiture benefits, cash surrender values, certificate loans, and other options as its laws may permit. In the case of certificates issued after September 21, 1952, other than those for which reserves are computed on the Commissioners 1941 Standard Ordinary Mortality Table, the 1941 Standard Industrial Table, the Commissioners 1958 Standard Ordinary Mortality Table, the Commissioners 1980 Standard Ordinary Mortality Table, or any more recent table approved by the commissioner that applies to life insurers, the value of any nonforfeiture benefit granted and the amount of any cash surrender value granted shall not be less than the excess, if any, of (a) over (b) as follows: (a) The reserve under the certificate determined on the basis specified in the certificate; and (b) The sum of any indebtedness to the society on the certificate, including interest due and accrued, and a surrender charge of not more than 21/2 percent of the face amount of the certificate, which, in the case of insurance on the lives of children, shall be the ultimate face amount of the certificate, if death benefits provided therein are graded. However, in the case of certificates issued on a substandard basis or in the case of certificates, the reserves for which are computed upon the American Men Ultimate Table of Mortality, the term of any extended insurance benefit including accompanying pure endowment, if any, may be computed upon the rates of mortality not greater than 130 percent of those shown by the mortality table specified in the certificate for the computation of the reserve. In the case of certificates issued after September 21, 1952, for which reserves are computed on the Commissioners 1941 Standard Ordinary Mortality Table, the 1941 Standard Industrial Table, the Commissioners 1958 Standard Ordinary Mortality Table, the Commissioners 1980 Standard Ordinary Mortality Table, or any more recent table approved by the commissioner that applies to life insurers, the value of any nonforfeiture benefit granted and the amount of any cash surrender value granted shall not be less than the corresponding amount ascertained in accordance with the provisions of Sections 10161, 10162, 10163, 10163.1, 10163.2, 10164, 10164.1, and 10165 applicable to life insurance companies. (Amended by Stats. 1995, Ch. 166, Sec. 7. Effective January 1, 1996.)
  28. 11044.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 4. Benefits [11040 - 11044] ( Article 4 added by Stats. 1951, Ch. 1193. )

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    A beneficiary has no vested interest in certificate proceeds until the certificate is due and payable. The certificate owner may change beneficiaries at any time, unless the owner makes the designation irrevocable in writing. A society may limit beneficiaries only as federal law allows.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 4. Benefits [11040 - 11044] ( Article 4 added by Stats. 1951, Ch. 1193. ) ## 11044. No beneficiary shall have or obtain any vested interest in the proceeds of any certificate until the certificate has become due and payable in conformity with the provisions of the insurance contract. The owner of a certificate shall have the right at all times to change the beneficiary or beneficiaries in accordance with the constitution, laws, or rules of the society, unless the owner waives this right by specifically requesting in writing that the beneficiary designation be irrevocable. Every society, by its constitution, laws, or rules, may limit the scope of beneficiaries only to the extent required by federal law governing fraternal benefit societies. (Amended by Stats. 1995, Ch. 166, Sec. 8. Effective January 1, 1996.)
  29. 1105.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 17. Loans and Investments [1100 - 1107.1] ( Article 17 enacted by Stats. 1935, Ch. 145. )

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    This section says the article does not stop several specified insurance-related transactions, including certain purchases, loans, fees, advances, approved insider transactions, and a limited insurer home-loan/residence transaction.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 17. Loans and Investments [1100 - 1107.1] ( Article 17 enacted by Stats. 1935, Ch. 145. ) ## 1105. This article shall not prevent: (a) The purchase by any person of any asset which the commissioner requires to be sold, at a price approved by the commissioner. (b) The borrowing in accordance with its terms by any person upon a policy of life insurance upon his own life. (c) The payment of a fee to any attorney for legal services rendered to any such insurer. (d) The receipt of advances under agency contracts by agents of life insurers. (e) Any admitted insurer’s officers, directors, trustees or other persons who have authority in the management of the funds of such insurer from entering into any transaction with such insurer if: (1) Such transaction is pursuant to a permit issued by the Insurance Commissioner under authority granted to him by other provisions of this code or is such as requires his approval prior to its consummation under other provisions of this code; (2) The application for any such permit or the request for any such approval sets forth under oath the complete details concerning all such transactions with any such officers, directors, trustees or other persons; and (3) Where the commissioner in his permit or approval specifically finds that the consummation of such transaction will not be unfair, unjust or inequitable to such insurer or to any of its stockholders or policyholders. (f) Any transaction between an insurer and a person having authority in the management of the insurer’s funds (except officers, directors, and trustees), if such insurer is subject to registration and reporting under the Insurance Holding Company System Regulatory Act (Article 4.7 (commencing with Section 1215) of Chapter 2 of this part), or subject to substantially similar registration and reporting requirements under the laws of its domicile. (g) An admitted insurer making a loan for the purchase of a principal residence by, and acquiring, at a price not to exceed the fair market value thereof, the principal residence from, an officer or person having authority in management of the insurer’s funds, nor shall such officer or person be prohibited from accepting such loan or acquisition, in connection with the relocation of the place of employment at the request of the insurer, either during the course of employment or upon initial employment of such officer or person having authority in management of the insurer’s funds. Any loan permitted under this subdivision shall be secured by a first trust deed or first mortgage, shall not exceed 90 percent of the fair market value of the property, shall carry an interest rate no more favorable than that rate given to other employees of such insurer not subject to the limitations of this article and shall be subject to the approval of the insurer’s board of directors or delegated committee thereof. This subdivision shall not apply to directors and trustees of insurers. (Amended by Stats. 1980, Ch. 812, Sec. 1.)
  30. 1106.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 17. Loans and Investments [1100 - 1107.1] ( Article 17 enacted by Stats. 1935, Ch. 145. )

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    Violating certain insurance sections or the commissioner’s order is a misdemeanor. The commissioner must also, after notice and hearing, revoke or refuse to renew a domestic admitted insurer’s certificate of authority if the insurer fails to comply with the order for more than 60 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 17. Loans and Investments [1100 - 1107.1] ( Article 17 enacted by Stats. 1935, Ch. 145. ) ## 1106. Any person violating, or wilfully aiding another in the violation of, Sections 1101, 1101.1, 1102, 1103, 1104 or the commissioner’s order issued pursuant to Section 1104.1 is guilty of a misdemeanor. The commissioner shall, after a hearing upon due notice, revoke, or deny the renewal of, the certificate of authority of a domestic admitted insurer persisting for more than 60 days from and after the commissioner’s order issued pursuant to Section 1104.1 in failure to comply with such order. 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 the powers granted therein. (Amended by Stats. 1951, Ch. 592.)
  31. 11060.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 5. Contract [11060 - 11073] ( Article 5 added by Stats. 1951, Ch. 1193. )

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    A society authorized to do business in the state must issue each benefit member a certificate showing the benefits, and the certificate must say that it is the full agreement between the society and the member.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 5. Contract [11060 - 11073] ( Article 5 added by Stats. 1951, Ch. 1193. ) ## 11060. Every society authorized to do business in this State shall issue to each benefit member a certificate specifying the amount of benefits provided thereby. The certificate, together with any riders or endorsements attached thereto, the charter or articles of incorporation, the constitution and laws of the society, the application for membership, and declaration of insurability, if any, signed by the applicant, and all amendments to each thereof, shall constitute the entire agreement between the society and the member, and the certificate shall so state. A copy of the application for membership and of the declaration of insurability, if any, shall be endorsed upon or attached to the certificate. (Repealed and added by Stats. 1951, Ch. 1193.)
  32. 11061.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 5. Contract [11060 - 11073] ( Article 5 added by Stats. 1951, Ch. 1193. )

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    Statements made by a member are treated as representations, not warranties, unless there is fraud. Any waiver of this rule is void.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 5. Contract [11060 - 11073] ( Article 5 added by Stats. 1951, Ch. 1193. ) ## 11061. All statements purporting to be made by the member shall, in the absence of fraud, be representations and not warranties. Any waiver of this provision shall be void. (Repealed and added by Stats. 1951, Ch. 1193.)
  33. 11062.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 5. Contract [11060 - 11073] ( Article 5 added by Stats. 1951, Ch. 1193. )

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    Later changes to a society’s charter, constitution, or laws bind the member and beneficiaries, but they cannot be used to terminate or reduce benefits on an existing certificate.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 5. Contract [11060 - 11073] ( Article 5 added by Stats. 1951, Ch. 1193. ) ## 11062. Any changes, additions or amendments to the charter or articles of incorporation, constitution or laws duly made or enacted subsequent to the issuance of the certificate, shall bind the member and the beneficiaries, and shall govern and control the agreement in all respects the same as though such changes, additions or amendments had been made prior to and were in force at the time of the application for membership, but no such changes, additions or amendments shall have the effect of terminating or reducing the benefit or benefits payable under any certificate in force at the time such changes, additions or amendments become effective. (Repealed and added by Stats. 1951, Ch. 1193.)
  34. 11063.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 5. Contract [11060 - 11073] ( Article 5 added by Stats. 1951, Ch. 1193. )

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    Certified copies of certain society documents must be accepted as evidence of their terms and conditions.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 5. Contract [11060 - 11073] ( Article 5 added by Stats. 1951, Ch. 1193. ) ## 11063. Copies of any of the documents mentioned in Sections 11060 and 11062, certified by the secretary or corresponding officer of the society, shall be received in evidence of the terms and conditions thereof. (Repealed and added by Stats. 1951, Ch. 1193.)
  35. 11064.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 5. Contract [11060 - 11073] ( Article 5 added by Stats. 1951, Ch. 1193. )

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    A society must state in its certificates what happens if reserves become impaired, including a possible board requirement for the owner to pay a share of the deficiency and interest if payment is not made.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 5. Contract [11060 - 11073] ( Article 5 added by Stats. 1951, Ch. 1193. ) ## 11064. A society shall provide specifically in its certificates that if its reserves become impaired, its board of directors or corresponding body may require that the owner pay to the society the amount of the owner’s equitable proportion of the deficiency as ascertained by its board, and that if the payment be not made it shall stand as an indebtedness against the certificate and draw interest not to exceed the rate specified for certificate loans under the certificate, or if none is specified, 6 percent per annum compounded annually. (Amended by Stats. 1995, Ch. 166, Sec. 9. Effective January 1, 1996.)
  36. 11065.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 5. Contract [11060 - 11073] ( Article 5 added by Stats. 1951, Ch. 1193. )

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    Every society authorized to do business in this State must put in its constitution or laws a rule requiring members to make additional payments or contributions when the society’s board decides that is necessary or proper to carry on the insurance business.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 5. Contract [11060 - 11073] ( Article 5 added by Stats. 1951, Ch. 1193. ) ## 11065. Every society authorized to do business in this State shall provide in its constitution or laws that additional payments or contributions shall be required of members by the action of the board of directors or corresponding body of the society whenever they deem it necessary or proper to effectuate the carrying on of the insurance business of the society. (Repealed and added by Stats. 1951, Ch. 1193.)
  37. 11066.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 5. Contract [11060 - 11073] ( Article 5 added by Stats. 1951, Ch. 1193. )

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    Life insurance benefit certificates must include specified standard provisions, and the commissioner may approve a more favorable form.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 5. Contract [11060 - 11073] ( Article 5 added by Stats. 1951, Ch. 1193. ) ## 11066. After the effective date of the amendments to this section made during the 1995–96 Regular Session of the Legislature, no life insurance benefit certificate may be delivered or issued for delivery in this state unless a copy of the form, the application therefor, and any attached endorsements or riders have been filed with the commissioner in the same manner as policies, contracts, or certificates of life insurance issued by stock or mutual insurers. The certificate shall have a title clearly and correctly describing its form on the face and filing back and shall contain in substance the standard provisions listed below. However, the commissioner may approve any form that in his or her opinion contains provisions relating to any one or more of the following requirements that are more favorable to insured members than the one or ones required here. (a) A provision stating the amount of premiums that are payable under the certificate, and a provision that the certificate holder shall be obligated to pay, as a condition of the continuance in force of the certificate, additional premiums imposed in accordance with the constitution or laws of the society then in force or thereafter lawfully enacted. (b) A provision that the certificate holder is entitled to a grace of not less than a full month (or 30 days at the option of the society) in which the payment of any premium, after the first, may be made, and that during the grace period, the certificate shall continue in full force. However, the certificate may provide that in case a loss occurs during the grace period before the overdue premium is paid, the amount of the overdue premium or premiums may be deducted in any settlement under the certificate. (c) A provision that the certificate holder shall be entitled to have the certificate reinstated at any time within three years from the date of default in payment of premiums, unless the certificate has been completely terminated through the application of a nonforfeiture benefit, upon the production of evidence of insurability and good health satisfactory to the society and the payment of all overdue premiums and any other indebtedness to the society upon the certificate, together with interest on the premiums and indebtedness, if any, at a rate not exceeding 6 percent per annum compounded annually. However, a society may provide for a minimum interest payment of not exceeding ten cents ($0.10) for each month’s premium in arrears at the date of reinstatement, if the premiums do not exceed 12 in number. (d) A provision that, in the event of default in payment of any premium after three full years’ premiums have been paid, or after premiums for a lesser period have been paid if the contract so provides, the society will grant, upon proper request not later than 60 days after the due date of the premium in default, a nonforfeiture benefit on the plan stipulated in the certificate, effective as of the due date, of the value as specified in this chapter. This subdivision does not apply to pure endowment, annuity or reversionary annuity contracts, or term certificates of uniform amount, or renewal thereof, of 15 years or less expiring before age 66, for which uniform premiums are payable during the entire term of the certificate, or term certificates of decreasing amount on which the granting of a nonforfeiture benefit is not required in order to comply with the minimum values specified in this chapter. (e) A provision that one nonforfeiture benefit, as specified in the certificate, in accordance with the requirements of subdivision (d) above, shall become effective automatically unless the member elects another available nonforfeiture benefit or, if society makes available a cash surrender value, the cash surrender value, not later than 60 days after the due date of the premium in default. (f) A statement of the mortality table and rate of interest used in determining all nonforfeiture benefits and cash surrender values available under the certificate. After September 21, 1954, a brief general statement of the method used in calculating the benefits and values available under the certificate on any certificate anniversary beyond the last anniversary for which the benefits and values are consecutively shown in the certificate. The statement shall be accompanied by an explanation of the manner in which the benefits and values are altered by the existence of paid-up additions credited to the certificate or by any indebtedness to the society on the certificate. (g) A table showing in figures every nonforfeiture benefit and cash surrender value available under the certificate for each certificate anniversary either during the first 20 certificate years or during the term of the certificate, whichever is shorter, the benefits and values to be calculated upon the assumption that there are no dividends or paid-up additions credited to the certificate and that there is no indebtedness to the society on account of or secured by the certificate. (h) A provision that the certificate shall be incontestable after it has been in force during the lifetime of the insured for a period of two years from its date of issue except for nonpayment of premiums, risks limited or not assumed, violation of the provisions of the certificate relating to military, aviation, or naval service, or violation of the provisions relating to suspension or expulsion as substantially set forth in the certificate. At the option of the society, supplemental provisions relating to benefits in the event of temporary or permanent disability or hospitalization and provisions that grant additional insurance specifically against death by accident or accidental means, may also be excepted. The certificate shall be incontestable on the ground of suicide after it has been in force during the lifetime of the insured for a period of two years from date of issue. The certificate may provide, as to statements made to procure reinstatement, that the society has the right to contest a reinstated certificate within a period of two years from date of reinstatement with the same exceptions as provided here. (i) A provision that if it shall be found at any time before final settlement under the certificate that the age or sex of the insured (or the age or sex of any other person, if considered in determining the premium) has been misstated, and the discrepancy and the premium payment involved have not been adjusted, the amount payable under the certificate shall be such as the premium would have purchased at the correct age and sex. However, if the correct age was not an insurable age under the society’s charter, constitution, or bylaws, only the premiums paid to the society, less any payments previously made to the member, shall be returned. Alternatively, at the option of the society, the amount payable under the certificate shall be that which the premiums would have purchased at the correct age and sex according to the society’s promulgated rates and any extension thereof based upon actuarial principles. (j) A provision or provisions that recite fully, or that set forth the substance of, all sections of the charter, constitution, laws, rules or regulations of the society, in force at the time of issuance of the certificate, the violation of which will result in the termination of, or in the reduction of, the benefit or benefits payable under the certificate. Any of the foregoing provisions or portions thereof not applicable by reason of the plan of insurance may, to the extent inapplicable, be omitted from the certificate. The word “premiums” as used in this section means premiums, rates, or other required contributions by whatever name known. (Amended by Stats. 1995, Ch. 166, Sec. 10. Effective January 1, 1996.)
  38. 11067.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 5. Contract [11060 - 11073] ( Article 5 added by Stats. 1951, Ch. 1193. )

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    A life insurance benefit certificate may not include certain unfair terms, such as shortening lawsuit deadlines below 18 months, dating the certificate more than 6 months before the application, forfeiting it for certain loan defaults while debt is below loan value, or reducing surrender/withdrawal value for suspension, expulsion, occupation change, or similar breaches.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 5. Contract [11060 - 11073] ( Article 5 added by Stats. 1951, Ch. 1193. ) ## 11067. After September 21, 1952, no life insurance benefit certificate shall be delivered or issued for delivery in this State containing in substance any of the following provisions: (a) Any provision limiting the time within which any action at law or in equity may be commenced to less than 18 months after the cause of action shall accrue. (b) Any provision by which the certificate shall purport to be issued or take effect more than six months before the original application for the certificate was made, except in case of transfer from one form of certificate to another in connection with which the member is to receive credit for any reserve accumulation under the form of certificate from which the transfer is made. (c) Any provision for forfeiture of the certificate for failure to repay any loan thereon or to pay interest on such loan while the total indebtedness, including interest, is less than the loan value of the certificate. (d) Any provision whereby the suspension or expulsion of the member, or change of occupation, or any other violation of the terms and conditions of the contract shall result in the loss or reduction of the cash surrender value or other withdrawal equity, if any, available by the terms of such certificate. (Repealed and added by Stats. 1951, Ch. 1193.)
  39. 11068.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 5. Contract [11060 - 11073] ( Article 5 added by Stats. 1951, Ch. 1193. )

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    A life insurance benefit certificate issued for delivery in this state after September 21, 1954 cannot include a term that shortens the time to sue to less than two years after the cause of action accrues.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 5. Contract [11060 - 11073] ( Article 5 added by Stats. 1951, Ch. 1193. ) ## 11068. After September 21, 1954, no life insurance benefit certificate shall be delivered or issued for delivery in this State containing in substance any provision limiting the time within which any action at law or in equity may be commenced to less than two years after the cause of action shall accrue. (Repealed and added by Stats. 1951, Ch. 1193.)
  40. 11069.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 5. Contract [11060 - 11073] ( Article 5 added by Stats. 1951, Ch. 1193. )

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    A society may not issue disability or hospital/medical/nursing benefit certificates in this state until the form and related application/riders have been filed with and approved by the commissioner.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 5. Contract [11060 - 11073] ( Article 5 added by Stats. 1951, Ch. 1193. ) ## 11069. No domestic, foreign or alien society authorized to do business in this State shall issue or deliver in this State any certificate or other evidence of any contract for temporary or permanent disability benefits as a result of disease or accident, or for hospital, medical or nursing benefits, unless and until the form thereof, together with the form of application and all riders or endorsements for use in connection therewith, shall have been filed with the commissioner and approved by him as conforming to reasonable rules and regulations from time to time made by him and as not inconsistent with any other provisions of law applicable thereto. The commissioner shall, within a reasonable time after the filing of any such form, notify the society filing the same either of his approval or of his disapproval of such form. The commissioner may approve any such form which in his opinion contains provisions on any one or more of the several requirements made by him which are more favorable to the insured members than the one or ones so required. The action of the commissioner in disapproving any such form shall be subject to judicial review. Pursuant to the foregoing provisions, the commissioner shall have power, from time to time, to make, alter and supersede reasonable regulations prescribing the required, optional and prohibited provisions in such contracts, and such regulations shall conform, as far as practicable, to the provisions of this code relating to similar contracts issued by other insurers. Where the commissioner deems inapplicable, either in part or in their entirety, the provisions of this code relating to similar contracts issued by other insurers, he may prescribe the portions or summary thereof of the contract to be printed on the certificate issued to the member. All rules and regulations made, altered or superseded by the commissioner pursuant to the authority granted in this section shall be in accordance with Chapter 4 of Part 1, Division 3, Title 2 of the Government Code. (Amended by Stats. 1953, Ch. 46.)
  41. 1107.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 17. Loans and Investments [1100 - 1107.1] ( Article 17 enacted by Stats. 1935, Ch. 145. )

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    An insurer may apply to the insurance commissioner for approval of certain transaction terms and fairness, and the commissioner can require the application to be in a form with information and documents the commissioner considers appropriate.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 17. Loans and Investments [1100 - 1107.1] ( Article 17 enacted by Stats. 1935, Ch. 145. ) ## 1107. In accordance with either subdivision (e) of Section 1001 or Section 1101.1 of the Corporations Code, an insurer may apply for the insurance commissioner’s approval of the terms and conditions of the covered transactions and the fairness of such terms and conditions to deliver consideration other than securities which shall be in such form, contain such information and be accompanied by such documents as the commissioner deems appropriate or requires. (Added by Stats. 1978, Ch. 795.)
  42. 1107.1.

    ## 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 17. Loans and Investments [1100 - 1107.1] ( Article 17 enacted by Stats. 1935, Ch. 145. )

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    The commissioner must require payment of $374 as a fee for the determination referred to in Section 1107.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 17. Loans and Investments [1100 - 1107.1] ( Article 17 enacted by Stats. 1935, Ch. 145. ) ## 1107.1. The commissioner shall require the payment of three hundred seventy-four dollars ($374), as fee for the determination referred to in Section 1107. (Amended by Stats. 2017, Ch. 534, Sec. 23. (AB 1699) Effective January 1, 2018.)
  43. 11070.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 5. Contract [11060 - 11073] ( Article 5 added by Stats. 1951, Ch. 1193. )

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    After September 21, 1954, a lawsuit on a society-issued certificate or contract must be started within two years after the cause of action accrues.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 5. Contract [11060 - 11073] ( Article 5 added by Stats. 1951, Ch. 1193. ) ## 11070. After September 21, 1954, no action at law or in equity shall be had or maintained on any certificate or contract issued by a society unless commenced within two years after the cause of action shall accrue. (Repealed and added by Stats. 1951, Ch. 1193.)
  44. 11071.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 5. Contract [11060 - 11073] ( Article 5 added by Stats. 1951, Ch. 1193. )

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    A society may include a rule that subordinate bodies, officers, and members cannot waive the society’s laws or constitution.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 5. Contract [11060 - 11073] ( Article 5 added by Stats. 1951, Ch. 1193. ) ## 11071. The constitution and laws of the society may provide that no subordinate body, nor any of its subordinate officers or members shall have the power or authority to waive any of the provisions of the laws and constitution of the society. Such provision shall be binding on the society and every member and beneficiary of a member. (Repealed and added by Stats. 1951, Ch. 1193.)
  45. 11072.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 5. Contract [11060 - 11073] ( Article 5 added by Stats. 1951, Ch. 1193. )

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    A domestic society may cede individual risks by reinsurance, but it may not reinsure substantially all of its insurance in force without the commissioner’s written permission.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 5. Contract [11060 - 11073] ( Article 5 added by Stats. 1951, Ch. 1193. ) ## 11072. A domestic society may, by a reinsurance agreement, cede any individual risk or risks in whole or in part to an insurer having the power to make such reinsurance and authorized to do business in this State, or if not so authorized, one which is approved by the commissioner; but no such society may reinsure substantially all of its insurance in force without the written permission of the commissioner. It may take credit for the reserves on such ceded risks to the extent reinsured, but no credit shall be allowed as an admitted asset or as a deduction from liability, to a ceding society for reinsurance made, ceded, renewed, or otherwise becoming effective after the effective date of this chapter, unless the reinsurance is payable by the assuming insurer on the basis of the liability of the ceding society under the contract or contracts reinsured without diminution because of the insolvency of the ceding society. (Repealed and added by Stats. 1951, Ch. 1193.)
  46. 11073.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 5. Contract [11060 - 11073] ( Article 5 added by Stats. 1951, Ch. 1193. )

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    A society’s contract covering an employee and a dependent spouse must not treat employees less favorably than the covered spouses.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 5. Contract [11060 - 11073] ( Article 5 added by Stats. 1951, Ch. 1193. ) ## 11073. If the contract of a society entered into, amended, or renewed in this state on or after the effective date of this section provides in any manner for coverage for an employee and a covered spouse dependent upon such employee, the contract shall not provide for coverage under conditions less favorable for employees than coverage provided for covered spouses dependent upon the employees. (Added by Stats. 1976, Ch. 59.)
  47. 11090.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 6. Powers of Commissioner [11090 - 11112] ( Article 6 added by Stats. 1951, Ch. 1193. )

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    The commissioner must charge a filing fee for each original certificate of authority, and societies with an indefinite-term certificate must pay an annual fee in advance.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 6. Powers of Commissioner [11090 - 11112] ( Article 6 added by Stats. 1951, Ch. 1193. ) ## 11090. Subject to the annual fee provisions as provided herein, every certificate of authority issued to a fraternal benefit society shall be for an indefinite term and shall expire with the expiration or termination of the corporate existence of the holder thereof unless sooner revoked by the commissioner. The commissioner shall require the payment of seven thousand fifty-five dollars ($7,055), in advance, as a fee for filing an application for each original certificate of authority authorizing any fraternal benefit society to transact insurance in this state. Each society possessing a certificate of authority of indefinite term shall owe and pay an annual fee of four hundred twenty-four dollars ($424), in advance, on account of that certificate until its final expiration or revocation. That fee shall be for annual periods commencing on July 1 of each year, and ending on June 30 of each year, and shall be due on each March 1 and shall be delinquent on and after each April 1. A duly certified copy or duplicate of the certificate of authority shall be prima facie evidence that the holder is a fraternal benefit society within the meaning of this chapter. (Amended by Stats. 2017, Ch. 534, Sec. 66. (AB 1699) Effective January 1, 2018.)
  48. 11091.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 6. Powers of Commissioner [11090 - 11112] ( Article 6 added by Stats. 1951, Ch. 1193. )

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    A foreign or alien society may not do business in the state unless it has a certificate of authority from the commissioner.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 6. Powers of Commissioner [11090 - 11112] ( Article 6 added by Stats. 1951, Ch. 1193. ) ## 11091. No foreign or alien society shall transact business in this State without a certificate of authority issued by the commissioner. Any such society may receive a certificate of authority to transact business in this State upon a showing that its assets are invested in accordance with the provisions of this chapter and filing with the commissioner: (a) A duly certified copy of its charter or articles of incorporation; (b) A copy of its constitution and laws, certified by its secretary or corresponding officer; (c) A power of attorney to the commissioner as prescribed in Section 11104; (d) A statement of its business under oath of its president and secretary or corresponding officers in a form prescribed by the commissioner, duly verified by an examination made by the supervising insurance official of its home state or other state satisfactory to the commissioner; (e) A valuation report prepared and executed in accordance with Section 11133 of this chapter; (f) A certificate from the proper official of its home state, territory, province or country that the society is legally incorporated and licensed to transact business therein; (g) Copies of its certificate forms; (h) Such other information as the commissioner may deem necessary to a proper exhibit of its plan of operation; and (i) Payment of the fee specified in Section 11090. Any foreign or alien society desiring admission to this State shall have the qualifications required of domestic societies organized under this chapter. If the commissioner refuses to issue such license, he shall reduce his refusal to writing, file the same in his office and furnish a copy thereof, together with a statement of his reason therefor, to the secretary or corresponding officer of the society. (Repealed and added by Stats. 1951, Ch. 1193.)
  49. 11092.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 6. Powers of Commissioner [11090 - 11112] ( Article 6 added by Stats. 1951, Ch. 1193. )

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    If the commissioner finds certain problems with a domestic society after an investigation, the commissioner must act under Section 11093.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 6. Powers of Commissioner [11090 - 11112] ( Article 6 added by Stats. 1951, Ch. 1193. ) ## 11092. The commissioner shall act as prescribed in Section 11093 when upon investigation he finds that a domestic society: (a) Has exceeded its power; (b) Has failed to comply with any provision of this chapter; (c) Is not fulfilling its contracts in good faith; (d) Has a membership of less than 400 after an existence of one year; or (e) Is transacting business fraudulently or in a manner hazardous to its members, creditors, the public or the business. (Repealed and added by Stats. 1951, Ch. 1193.)
  50. 11093.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 6. Powers of Commissioner [11090 - 11112] ( Article 6 added by Stats. 1951, Ch. 1193. )

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    If the commissioner finds certain Section 11092 conditions for a domestic society, the commissioner must notify the society and set a show-cause date; the Attorney General may then be asked to act, and the court may order injunction, liquidation, or a receiver after hearing.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 6. Powers of Commissioner [11090 - 11112] ( Article 6 added by Stats. 1951, Ch. 1193. ) ## 11093. (a) If the commissioner finds that any of the conditions set forth in Section 11092 exist in respect to a domestic society, he or she shall, in an order to show cause, notify the society of his or her findings and wherein those conditions exist and shall set a date after a reasonable period of time on which it shall show cause why it should not be enjoined from carrying on any business until the overt act or violation complained of shall have been corrected, or why an action in quo warranto should not be commenced against the society. (b) If on such date the society does not present good and sufficient reason why it should not be so enjoined or why such action should not be commenced, the commissioner may present the facts relating thereto to the Attorney General who shall, if he or she deems the circumstances warrant, commence an action to enjoin the society from transacting business or in quo warranto. (c) The court shall thereupon notify the society of a hearing. If after a full hearing it appears that the society should be so enjoined or liquidated or a receiver appointed, the court shall enter the necessary order. (Amended by Stats. 2011, Ch. 426, Sec. 8. (SB 712) Effective January 1, 2012.)
  51. 11094.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 6. Powers of Commissioner [11090 - 11112] ( Article 6 added by Stats. 1951, Ch. 1193. )

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    If a court orders the society enjoined, the commissioner must suspend the society’s certificate of authority.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 6. Powers of Commissioner [11090 - 11112] ( Article 6 added by Stats. 1951, Ch. 1193. ) ## 11094. If the court orders the society enjoined, the commissioner shall suspend its certificate of authority. Thereafter such society shall have no authority to do business in this State until: (a) The commissioner finds that the overt act or violation complained of has been corrected; (b) The costs of such action, if any, have been paid by the society; (c) The court has dissolved its injunction; and (d) The commissioner has reinstated the certificate of authority. (Repealed and added by Stats. 1951, Ch. 1193.)
  52. 11095.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 6. Powers of Commissioner [11090 - 11112] ( Article 6 added by Stats. 1951, Ch. 1193. )

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    If a court orders liquidation, the society must stop doing business and the receiver must take control of the society’s assets and wind up its affairs.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 6. Powers of Commissioner [11090 - 11112] ( Article 6 added by Stats. 1951, Ch. 1193. ) ## 11095. If the court orders the society liquidated, it shall be enjoined from carrying on any further business, whereupon the receiver of the society shall proceed at once to take possession of the books, papers, money and other assets of the society and, under the direction of the court, proceed forthwith to close the affairs of the society and to distribute its funds to those entitled thereto. (Added by Stats. 1951, Ch. 1193.)
  53. 11096.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 6. Powers of Commissioner [11090 - 11112] ( Article 6 added by Stats. 1951, Ch. 1193. )

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    If a society voluntarily decides to stop doing business, Sections 11093 to 11095 apply.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 6. Powers of Commissioner [11090 - 11112] ( Article 6 added by Stats. 1951, Ch. 1193. ) ## 11096. The provisions of Sections 11093 to 11095 relating to hearing by the commissioner, action by the Attorney General at the request of the commissioner, hearing by the court, injunction and receivership shall be applicable to a society which shall voluntarily determine to discontinue business. (Added by Stats. 1951, Ch. 1193.)
  54. 11097.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 6. Powers of Commissioner [11090 - 11112] ( Article 6 added by Stats. 1951, Ch. 1193. )

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    If the commissioner finds certain problems with a foreign or alien society doing business or seeking to do business in the state, the commissioner must act as directed by Section 11098.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 6. Powers of Commissioner [11090 - 11112] ( Article 6 added by Stats. 1951, Ch. 1193. ) ## 11097. The commissioner shall act as prescribed in Section 11098 when upon investigation he finds that a foreign or alien society transacting or applying to transact business in this State: (a) Has exceeded its powers; (b) Has failed to comply with any provisions of this chapter; (c) Is not fulfilling its contracts in good faith; or (d) Is conducting its business fraudulently or in a manner hazardous to its members or creditors or the public. (Added by Stats. 1951, Ch. 1193.)
  55. 11098.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 6. Powers of Commissioner [11090 - 11112] ( Article 6 added by Stats. 1951, Ch. 1193. )

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    If the commissioner finds certain conditions exist, the commissioner must notify the foreign or alien society, set a show-cause date, and may suspend, refuse, or revoke its certificate of authority if the society does not show good reason.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 6. Powers of Commissioner [11090 - 11112] ( Article 6 added by Stats. 1951, Ch. 1193. ) ## 11098. If the commissioner finds that any of the conditions set forth in Section 11097 exist in respect to a foreign or alien society, he shall, in an order to show cause, notify the society of his findings wherein such conditions exist and shall set a date after a reasonable period of time on which it shall show cause why its certificate of authority should not be suspended, revoked or refused. If on such date the society does not present good and sufficient reason why its authority to do business in this State should not be suspended, revoked or refused, he may suspend or refuse the certificate of authority of the society to do business in this State until satisfactory evidence is furnished to him that such suspension or refusal should be withdrawn or he may revoke the authority of the society to do business in this State. Nothing contained in this section shall be taken or construed as preventing any such society from continuing in good faith all contracts made in this State during the time it was legally authorized to transact business herein. (Added by Stats. 1951, Ch. 1193.)
  56. 11099.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 6. Powers of Commissioner [11090 - 11112] ( Article 6 added by Stats. 1951, Ch. 1193. )

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    Article 14 (starting with Section 1010) applies to any society, unless this chapter provides otherwise.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 6. Powers of Commissioner [11090 - 11112] ( Article 6 added by Stats. 1951, Ch. 1193. ) ## 11099. Article 14 (commencing with Section 1010) of Chapter 1 of Part 2 of Division 1 applies to any society, except as otherwise provided in this chapter. (Amended by Stats. 1982, Ch. 454, Sec. 109.)
  57. 111.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Classes of Insurance [100 - 124.5] ( Chapter 1 enacted by Stats. 1935, Ch. 145. )

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    Boiler and machinery insurance is defined to include coverage against loss of property and liability for damage caused by explosions or accidents involving listed equipment.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Classes of Insurance [100 - 124.5] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## 111. Boiler and machinery insurance includes insurance against loss of property and liability for damage to persons or property from explosion of, or accident to, boilers, tanks, pipes, pressure vessels, engines, wheels, electrical machinery, or apparatus connected therewith or operating thereby. (Enacted by Stats. 1935, Ch. 145.)
  58. 1110.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 18. Multiple Insurer Operations [1110 - 1113] ( Article 18 added by Stats. 1943, Ch. 872. )

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    This section says Article 18 does not apply to certain combination automobile insurance policies, and it does apply to three described types of multiple-insurer arrangements.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 18. Multiple Insurer Operations [1110 - 1113] ( Article 18 added by Stats. 1943, Ch. 872. ) ## 1110. This article does not apply to combination automobile insurance policies in which one insurer issues a policy covering certain classes of insurance on a risk, and another insurer covers certain other classes of insurance on the same risk. This article applies to: (a) The issuance of a policy in which more than one insurer indemnifies the insured severally, jointly, or jointly and severally with other insurers for all or a specified portion of a risk. (b) The issuance of a policy which is subject to an automatic reinsurance agreement under which several insurers participate with the insurer or insurers issuing the policy to the same extent as though they were primary insurers, and the contract is negotiated upon the basis of such reinsurance and the policy makes reference to the fact of such reinsurance. (c) Policies issued pursuant to a plan providing for the allocation among various insurers of risks who have been unable to procure such insurance without resort to the plan. (Added by Stats. 1943, Ch. 872.)
  59. 11100.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 6. Powers of Commissioner [11090 - 11112] ( Article 6 added by Stats. 1951, Ch. 1193. )

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    A qualifying society may appoint agents to represent it.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 6. Powers of Commissioner [11090 - 11112] ( Article 6 added by Stats. 1951, Ch. 1193. ) ## 11100. Every society operating under the provisions of this chapter and issuing a policy or certificate of insurance may appoint agents to represent it. (Added by Stats. 1951, Ch. 1193.)
  60. 11101.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 6. Powers of Commissioner [11090 - 11112] ( Article 6 added by Stats. 1951, Ch. 1193. )

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    Certain agents must be licensed as life agents, and both those agents and the societies are subject to specified insurance code provisions, except as Sections 11102 and 11103 provide otherwise.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 6. Powers of Commissioner [11090 - 11112] ( Article 6 added by Stats. 1951, Ch. 1193. ) ## 11101. Except as otherwise provided in Sections 11102 and 11103, such agents and such societies are subject to Chapter 5 (commencing with Section 1621) of Part 2 of Division 1 and those agents shall be licensed as life agents. Those agents are also subject to Sections 750, 751, and 760.5, and the terms “insurance agent” and “life agent” as used in those sections include the agents of those societies. (Amended by Stats. 1982, Ch. 454, Sec. 110.)
  61. 11102.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 6. Powers of Commissioner [11090 - 11112] ( Article 6 added by Stats. 1951, Ch. 1193. )

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    Certain listed people connected to fraternal benefit societies are exempt from Chapter 5 and do not need a life agent license if they meet the stated conditions.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 6. Powers of Commissioner [11090 - 11112] ( Article 6 added by Stats. 1951, Ch. 1193. ) ## 11102. Chapter 5 (commencing with Section 1621) of Part 2 of Division 1 does not apply to any of the following, nor shall any of the following be required to be licensed as life agents: (a) Any officer of a local lodge of a society, while acting as such, if that officer (1) does not effect insurance, (2) solicits or negotiates only as a part of, and in connection with, the business of a fraternal agent licensed in accordance with the provisions of Section 11101, and (3) is not remunerated on a commission basis. (b) Any member of a society who does not effect insurance and whose solicitation or negotiation is incidental to the securing of new members for the society and whose only remuneration therefor consists of prizes in the form of merchandise or payments of a nominal amount. This subdivision does not exempt from the provisions of Chapter 5 nor from the license requirement of Section 11101 any person remunerated on a regular salary or commission basis or employed either full or part time for the purpose of soliciting or negotiating fraternal benefit insurance. (c) Any person directly employed by a society at the home or a branch office thereof who does not solicit or negotiate fraternal benefit insurance and who receives no commissions but who may, as a part of his or her regular employment, sign policies, certificates, or other evidences of fraternal benefit insurance. (d) Any person whose employment does not include the solicitation, negotiation, or effecting of fraternal benefit insurance contracts and who does not sign policies, certificates, or any other evidences of those contracts. (Amended by Stats. 1982, Ch. 454, Sec. 111.)
  62. 11103.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 6. Powers of Commissioner [11090 - 11112] ( Article 6 added by Stats. 1951, Ch. 1193. )

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    Some fraternal benefit society licensees are exempt from a specified examination requirement, but they must notify the commissioner and may have to qualify by examination later if they switch to full-time sales.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 6. Powers of Commissioner [11090 - 11112] ( Article 6 added by Stats. 1951, Ch. 1193. ) ## 11103. (a) The examination requirements of Article 7 (commencing with Section 1675) of Chapter 5 of Part 2 of Division 1 shall not apply to a license to represent a fraternal benefit society if the individual insurance licensee of a society meets either of the following conditions: (1) Was in the service of a society on March 1, 1945, and licensed to represent a fraternal benefit society on January 1, 1952, and continuously thereafter. (2) Does not devote substantially full time to the sale of life insurance, accident and health or sickness insurance, or both, as provided in Section 1622, and is an individual part-time fraternal licensee, whether that insurance is provided by insurance policies or by fraternal benefit policies or certificates. (b) If an individual that is exempt from the examination requirements described in subdivision (a) and meets the condition described in paragraph (2) of subdivision (a) later intends, after securing a license pursuant to this section, to devote substantially full time to the sale of life insurance, accident and health or sickness insurance, or both, the society shall give notice to the commissioner. (c) (1) Upon receiving notice, the commissioner shall send to the individual part-time fraternal insurance licensee a notice specifying when the examination fee shall be paid and when, not sooner than one month nor later than three months, the licensee shall qualify by examination. Failure to pass the examination or failure to appear pursuant to the commissioner’s notification shall result in a termination 45 days thereafter of all license privileges unless the licensee passes the examination within the 45-day period. The individual part-time fraternal insurance licensee shall not be permitted to retake the examination more than twice within that 45-day period. (2) Following termination pursuant to paragraph (1), the individual may remain licensed as a part-time fraternal insurance licensee until the licensee files a new application for the license and does either of the following: (A) Takes and passes the qualifying examination to become a life insurance agent, accident and health or sickness insurance agent, or both. (B) Demonstrates affirmatively to the commissioner that the individual will no longer devote substantially full time to the sale of life insurance, accident and health or sickness insurance, or both, to retain the individual part-time fraternal insurance license. (Repealed and added by Stats. 2025, Ch. 558, Sec. 23. (AB 487) Effective January 1, 2026.)
  63. 11104.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 6. Powers of Commissioner [11090 - 11112] ( Article 6 added by Stats. 1951, Ch. 1193. )

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    A society authorized to do business in the state must appoint the commissioner as its attorney for service of process and accept service on that attorney as legally equivalent to service on the society.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 6. Powers of Commissioner [11090 - 11112] ( Article 6 added by Stats. 1951, Ch. 1193. ) ## 11104. Every society authorized to do business in this State shall appoint in writing the commissioner and each successor in office to be its true and lawful attorney upon whom all lawful process in any action or proceeding against it shall be served, and shall agree in such writing that any lawful process against it which is served on said attorney shall be of the same legal force and validity as if served upon the society, and that the authority shall continue in force so long as any liability remain outstanding in this State. Copies of such appointment, certified by said commissioner, shall be deemed sufficient evidence thereof and shall be admitted in evidence with the same force and effect as the original thereof might be admitted. (Added by Stats. 1951, Ch. 1193.)
  64. 11105.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 6. Powers of Commissioner [11090 - 11112] ( Article 6 added by Stats. 1951, Ch. 1193. )

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    Service may be made under the method provided in another code article.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 6. Powers of Commissioner [11090 - 11112] ( Article 6 added by Stats. 1951, Ch. 1193. ) ## 11105. Service may be made as provided in Article 1 (commencing with Section 12919) of Chapter 2 of Division 3. (Amended by Stats. 1970, Ch. 949.)
  65. 11106.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 6. Powers of Commissioner [11090 - 11112] ( Article 6 added by Stats. 1951, Ch. 1193. )

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    A court may not entertain certain injunction, dissolution, or receivership applications concerning a domestic society or branch unless the Attorney General makes the application.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 6. Powers of Commissioner [11090 - 11112] ( Article 6 added by Stats. 1951, Ch. 1193. ) ## 11106. An application for injunction against, proceedings for the dissolution of, or the appointment of a receiver for, any domestic society or branch thereof shall not be entertained by any court unless made by the Attorney General. (Added by Stats. 1951, Ch. 1193.)
  66. 11107.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 6. Powers of Commissioner [11090 - 11112] ( Article 6 added by Stats. 1951, Ch. 1193. )

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    Fraternal benefit societies and their related persons are subject to Section 12924.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 6. Powers of Commissioner [11090 - 11112] ( Article 6 added by Stats. 1951, Ch. 1193. ) ## 11107. A fraternal benefit society, its members, employees, agents, delegates, directors, and officers by whatever name known are subject to Section 12924. (Amended by Stats. 1982, Ch. 454, Sec. 113.)
  67. 11108.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 6. Powers of Commissioner [11090 - 11112] ( Article 6 added by Stats. 1951, Ch. 1193. )

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    A domestic society can convert to a mutual life insurance company only if it follows state law requirements and the commissioner approves the conversion plan.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 6. Powers of Commissioner [11090 - 11112] ( Article 6 added by Stats. 1951, Ch. 1193. ) ## 11108. Any domestic society may be converted into and receive a certificate of authority as a mutual life insurance company by compliance with all of the requirements of the laws of this State pertaining to mutual life insurance companies, provided that the plan for such conversion has been approved by the commissioner. Such plan shall be prepared in writing, setting forth in full the terms and conditions thereof. The board of directors, or other executive body charged with the responsibility for the management of the society’s affairs, shall submit such plan to the supreme legislative and governing body of such association or society at any regular or special meeting thereof, by giving a full, true and correct copy of such plan of proposed conversion with the notice of such meeting. Such notice shall be given as provided in the laws of the society for the convocation of such supreme legislative and governing body in regular or special session, as the case may be. The affirmative votes of two-thirds of all members of such supreme legislative and governing body shall be necessary for the approval of such agreement. Such plan shall also have been approved by the vote of the majority of the members who vote at a meeting called for that purpose. Notice of such meeting of members together with a full, true and correct copy of such plan of proposed conversion shall be given by mailing such notice from the head office of the society at least 30 days prior to such meeting in a sealed envelope, postage prepaid, addressed to each member at his last known post-office address. Such members may vote either in person or by mail on ballots furnished by the society. No such conversion shall take effect unless and until approved by the commissioner. The commissioner may give such approval if he finds that the proposed change is in conformity with the requirements of law and is not prejudicial to the certificate holders of the society. Such action in approving or disapproving shall be subject to judicial review. (Added by Stats. 1951, Ch. 1193.)
  68. 11109.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 6. Powers of Commissioner [11090 - 11112] ( Article 6 added by Stats. 1951, Ch. 1193. )

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    When a society converts, its funds, assets, and liabilities become those of the mutual life insurance company, and the commissioner must treat those funds as the company’s for capital-and-surplus testing unless a protected contract right requires segregation.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 6. Powers of Commissioner [11090 - 11112] ( Article 6 added by Stats. 1951, Ch. 1193. ) ## 11109. On such conversion: (a) Except as provided in (b) hereof all funds, assets and liabilities of any nature which theretofore were the funds, assets or liabilities of such society shall become the funds, assets and liabilities of such mutual life insurance company. In determining whether such mutual life insurance company meets the minimum capital and surplus requirements of this code, the commissioner shall consider such funds to be those of such mutual life insurance company. Such conversion shall likewise extinguish the assessment liability, if any, of the members, certificate holders or beneficiaries of such society. (b) If by reason of any contract right in any member, certificate holder or beneficiary which exists on the effective date of this chapter, the transfer of such funds or assets would violate such right then the assets or funds as to which such contract right pertains shall be segregated and held to discharge the liabilities of such mutual life insurance company to the persons entitled thereto. In this case such separate funds shall not be considered by the commissioner in determining if such mutual life insurance company meets minimum capital and surplus requirements, and the assessment liability, if any, of such member, certificate holder or beneficiary is not extinguished. (Added by Stats. 1951, Ch. 1193.)
  69. 1111.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 18. Multiple Insurer Operations [1110 - 1113] ( Article 18 added by Stats. 1943, Ch. 872. )

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    Insurers covered by this article may file a plan and insurer list with the commissioner, who may then issue a permit if the plan is safe for the insuring public.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 18. Multiple Insurer Operations [1110 - 1113] ( Article 18 added by Stats. 1943, Ch. 872. ) ## 1111. Insurers desiring to issue policies to which this article is applicable, and to pay commissions to persons who are licensed as insurance agents, but not as agents for all insurers participating in the risk, and who are not licensed as insurance brokers, may file with the commissioner in such form as he may require, a statement of the plan under which they intend to operate, and a list of the insurers that will operate under the plan. If the commissioner finds that the nature of the plan is not such that the interests of the insuring public will be jeopardized by permitting an agent of one or more of the insurers to act in a transaction with or for all the insurers, or for the particular insurer paying the commission without being licensed as agent for such insurer or as an insurance broker, he may issue a permit authorizing the operation of the plan by or on behalf of the insurers listed in the application, and the payment of commissions pursuant to the plan as approved by the commissioner shall be lawful. (Added by Stats. 1943, Ch. 872.)
  70. 11110.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 6. Powers of Commissioner [11090 - 11112] ( Article 6 added by Stats. 1951, Ch. 1193. )

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    The commissioner may refuse approval of a conversion unless satisfactory evidence is provided on reserves, asset availability, and lawful amendment of inadequate certificates.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 6. Powers of Commissioner [11090 - 11112] ( Article 6 added by Stats. 1951, Ch. 1193. ) ## 11110. In addition to any other ground for disapproving such conversion, the commissioner may refuse to give such approval unless evidence satisfactory to him is submitted that: (a) The reserves on all certificates theretofore issued are sufficient to carry them to maturity either by reason of the amount thereof or by reason of action by such society pursuant to either subsection (c) hereof or Section 11111; (b) The plan of conversion will result in the availability of all funds and assets of the mutual life insurance company to the carrying out of the contracts of insurance whether transacted before or after conversion; and (c) The society has lawfully amended all outstanding certificates on which the member’s contribution was inadequate to carry such certificate to maturity without assessment. Such amendment shall accomplish that purpose by either increasing the amount of contribution or premium, by whatever name known, sufficiently or, at the option of the certificate holder, reducing the amount of his benefits sufficiently. (Repealed and added by Stats. 1951, Ch. 1193.)
  71. 11111.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 6. Powers of Commissioner [11090 - 11112] ( Article 6 added by Stats. 1951, Ch. 1193. )

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    A society may make a special reserve adjustment for the stated purpose, but it may not change the reserve’s basis without the commissioner’s prior written consent.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 6. Powers of Commissioner [11090 - 11112] ( Article 6 added by Stats. 1951, Ch. 1193. ) ## 11111. Any society may comply with subsection (a) of Section 11110 by deducting from its surplus an amount which, when added to the reserves on certificates theretofore issued, shall be sufficient to carry such certificates to maturity and establish and maintain after its conversion into a mutual life insurance company a special reserve in such an amount. The basis of such special reserve shall not be altered without the prior written consent of the commissioner. The commissioner shall give such consent only when he finds that such alteration will not impair nor imperil the purpose for which such special reserve is established. Any impairment of such reserve shall, to the extent thereof, be deemed a deficiency of required reserves and shall render the mutual life insurance company insolvent. No part of such special reserve shall be deemed to be a part of the capital paid in or of the surplus of the mutual life insurance company. (Repealed and added by Stats. 1951, Ch. 1193.)
  72. 11112.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 6. Powers of Commissioner [11090 - 11112] ( Article 6 added by Stats. 1951, Ch. 1193. )

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    Commissioner decisions and findings under this chapter may be reviewed in a proper court proceeding in a court of competent jurisdiction in this State.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 6. Powers of Commissioner [11090 - 11112] ( Article 6 added by Stats. 1951, Ch. 1193. ) ## 11112. All decisions and findings of the commissioner made under the provisions of this chapter shall be subject to review by proper proceedings in any court of competent jurisdiction in this State. (Repealed and added by Stats. 1951, Ch. 1193.)
  73. 1112.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 18. Multiple Insurer Operations [1110 - 1113] ( Article 18 added by Stats. 1943, Ch. 872. )

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    Written notice of a change in the plan must be given to the commissioner within 10 days after an insurer withdraws or additional insurers join; otherwise the permit expires on day 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 18. Multiple Insurer Operations [1110 - 1113] ( Article 18 added by Stats. 1943, Ch. 872. ) ## 1112. Within 10 days after the withdrawal of an insurer from the plan or from the time additional insurers participate in the plan, notice of the change shall be given the commissioner in writing, and unless such notice is so given, the permit theretofore issued by the commissioner shall expire on the tenth day after such change. Unless the permit expires as provided in the preceding sentence, it shall remain in force continuously unless the commissioner after hearing finds that the insurers have deviated materially from the plan, and that it is against public interest to continue its operation. (Added by Stats. 1943, Ch. 872.)
  74. 11120.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. )

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    A qualifying society may collect member contributions if it has assets equal to policy reserves and credits; societies not operating under this section must comply with Section 11121.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. ) ## 11120. When a society, or a class or section thereof, has assets equal to the reserves and credits on its policies, it may collect periodical or other contributions from the members of the society, class or section which, with interest accretions, will be sufficient to accomplish all the following: (a) Pay the claims arising from its policies. (b) Pay for the expense of management of the society. (c) Maintain a fund sufficient to meet its accrued liabilities. (d) Maintain assets equal to the reserves and credits. Societies not operating pursuant to this section shall comply with Section 11121. (Repealed and added by Stats. 1951, Ch. 1193.)
  75. 11121.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. )

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    Unless it operates under Section 11120, a society must collect member contributions separately for mortuary or disability funds and for expense or management funds, and it must not use mortuary/disability fund money or its interest for expense purposes.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. ) ## 11121. Unless it operates under Section 11120, a society, or class or section thereof, shall collect from its members both stated contributions expressly segregated for the mortuary or disability funds and stated contributions expressly segregated for the expense or management funds. Both of such contributions may be included in the member’s periodical payment to the society. The society shall not use the money in the mortuary or disability funds nor the interest accretions thereon for expense purposes. (Repealed and added by Stats. 1951, Ch. 1193.)
  76. 11122.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. )

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    A society may create and use special funds for permitted purposes under its own laws.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. ) ## 11122. Any society may create, maintain, invest, disburse and apply any special fund or funds necessary to carry out any purpose permitted by the laws of the society. The funds may include hospital and help, sanitaria, home, thrift, pension for the society’s employees, patriotic, educational and relief funds, in accordance with the society’s laws. (Amended by Stats. 1995, Ch. 166, Sec. 11. Effective January 1, 1996.)
  77. 11122.1.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. )

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    A society may create separate accounts and issue variable contracts if its supreme legislative or governing body authorizes it and the society complies with applicable law.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. ) ## 11122.1. A society may, if authorized by a resolution of its supreme legislative or governing body, establish and operate one or more separate accounts and issue contracts on a variable basis to persons as specified in Section 11041, subject to compliance with the applicable laws. To the extent a society finds it necessary to comply with federal or state law, or regulations issued under state or federal law, a society may do the following: (a) Adopt special procedures for conducting the business of the separate account. (b) Provide special voting and other rights for a person with a beneficial interest in the special account, including, but not limited to, rights and procedures relating to investment policy, investment advisory services, selecting certified public accountants, and selecting a committee to manage the account. (c) Issue contracts on a variable basis that are exempted from the requirements of Sections 11062, 11064, and 11065. (Added by Stats. 1995, Ch. 166, Sec. 12. Effective January 1, 1996.)
  78. 11123.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. )

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    A fraternal benefit society may own real estate and buildings, receive gifts and bequests, and be named as a trust beneficiary in policies for those purposes.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. ) ## 11123. Any such society may own real estate and buildings within or without the state of its incorporation, for any purposes for which it may use funds. It may receive gifts and bequests for such purposes and may be named in policies as beneficiary in trust for such purposes. (Repealed and added by Stats. 1951, Ch. 1193.)
  79. 11124.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. )

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    Unless the members’ contracts say otherwise, the society’s funds must be held, invested, and disbursed for the society’s benefit, and members and beneficiaries have no individual rights in those funds or their apportionment.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. ) ## 11124. Unless otherwise provided in the contracts of the members, such funds shall be held, invested, and disbursed for the use and benefit of the society, and no member or beneficiary shall have or acquire individual rights therein or become entitled to any apportionment thereof. (Added by Stats. 1951, Ch. 1193.)
  80. 11125.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. )

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    A domestic society may invest its funds only in securities allowed by state law for certain life-insurer assets, and those securities must be valued using the same methods applied to similar securities held by those insurers.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. ) ## 11125. Every domestic society shall invest its funds only in securities permitted by the laws of this State for the investment of the assets of life insurers issuing nonassessable policies on a reserve basis. Such securities shall be valued according to the methods used in valuing similar securities held by such insurers. (Added by Stats. 1951, Ch. 1193.)
  81. 11126.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. )

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    An admitted foreign society must invest its funds under the same restrictions as domestic societies or under the laws of its state of incorporation, and it may deposit securities under any state’s laws.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. ) ## 11126. An admitted foreign society shall invest its funds either under the same restrictions as domestic societies or in accordance with the laws of the state in which it is incorporated. Any admitted foreign society may deposit securities in accordance with the laws of any state. (Added by Stats. 1951, Ch. 1193.)
  82. 11127.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. )

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    An admitted foreign society must keep prescribed assets with a trustee in the United States at all times for the benefit and security of its U.S. policyholders and creditors.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. ) ## 11127. An admitted foreign society organized under the laws of any jurisdiction other than a state of the United States shall at all times maintain with a trustee in the United States, in trust for the benefit and security of all its policyholders and creditors in the United States, assets as prescribed in Section 11128. Such assets are designated “trusteed assets.” (Added by Stats. 1951, Ch. 1193.)
  83. 11128.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. )

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    This section requires the value of certain trusteed assets to equal a specified sum, and allows the society to keep those assets above that value.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. ) ## 11128. The value of the trusteed assets referred to in Section 11127 shall be equal to the sum of all of the following: (a) All of the indebtedness of that society in the United States having a fixed maturity. (b) The percentage, specified in subdivision (c), of that part of the tabular reserve which is applicable to its United States business in force. (c) If the valuation report prescribed by Section 11133 indicates that the degree of actuarial solvency of the society is 100 percent or greater, the percentage prescribed in subdivision (b) is 100 percent. Otherwise the percentage prescribed in subdivision (b) is that percentage, less than 100 percent, which is indicated in the valuation report to be the degree of that society’s actuarial solvency. The society may maintain those trusteed assets in excess of the value herein prescribed. (Amended by Stats. 1982, Ch. 454, Sec. 114.)
  84. 11129.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. )

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    For the society described in Section 11127, Sections 1596 to 1598 apply, along with the matters set out in Sections 11127 and 11128.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. ) ## 11129. The provisions of Sections 1596 to 1598, inclusive, shall apply to such society specified in Section 11127 and to the matters set forth in Sections 11127 and 11128. (Added by Stats. 1951, Ch. 1193.)
  85. 1113.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 18. Multiple Insurer Operations [1110 - 1113] ( Article 18 added by Stats. 1943, Ch. 872. )

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    The commissioner must charge and collect a $107 fee for filing an application for a permit under 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 18. Multiple Insurer Operations [1110 - 1113] ( Article 18 added by Stats. 1943, Ch. 872. ) ## 1113. For filing application for a permit issued pursuant to this article, the commissioner shall charge and collect the sum of one hundred seven dollars ($107). (Amended by Stats. 2017, Ch. 534, Sec. 24. (AB 1699) Effective January 1, 2018.)
  86. 11130.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. )

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    The commissioner may require certain societies to file a statement about how much their U.S. policyholders and creditors are protected by trusteed assets in the United States.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. ) ## 11130. The commissioner may require any society specified in Section 11127 to file with him annually and at such other times as he may determine, and in such form as he may prescribe, a statement showing the extent to which such society’s policyholders and creditors in the United States are protected by trusteed assets in the United States. (Added by Stats. 1951, Ch. 1193.)
  87. 11131.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. )

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    Societies transacting business in the state must file an annual sworn statement with the commissioner by March 1, unless the commissioner extends the time for cause shown.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. ) ## 11131. Every society transacting business in this state shall annually, on or before the first day of March, unless for cause shown such time has been extended by the commissioner, file with the commissioner, in such form as he may require, a statement under oath of its president, secretary or treasurer, or corresponding officers, of its affairs, financial condition and operations during the calendar year ending on the thirty-first day of December last preceding. Such statement shall contain items showing the reserve liabilities on all outstanding certificates classified according to the various mortality standards and interest assumptions for such certificates. The commissioner is authorized and empowered to address any additional inquiries to any such society in relation to its doings or condition, or any other matter connected with its transaction relative to the business contemplated by this chapter, and such officers of such society, as the commissioner may require, shall promptly reply in writing, and under oath, if so required to all such inquiries. (Amended by Stats. 1981, Ch. 1131, Sec. 17. Operative July 1, 1982, by Sec. 29 of Ch. 1131.)
  88. 11132.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. )

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    The society must provide each benefit member a synopsis of its annual statement and valuation report by June 1 each year, either by mailing it or by publishing it in the society’s official paper and mailing that issue.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. ) ## 11132. A synopsis of its annual statement and valuation report providing an explanation of the facts concerning the condition of the society thereby disclosed shall be printed and mailed to each benefit member of the society not later than June 1st of each year, or, in lieu thereof, such synopsis may be published in the society’s official paper and the issue containing same mailed to each benefit member of the society. (Added by Stats. 1951, Ch. 1193.)
  89. 11133.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. )

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    Each society must file an annual certificate valuation with the commissioner by March 1, unless the commissioner extends the time for up to two months for cause shown.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. ) ## 11133. In addition to the annual report required by Section 11131, each society shall annually, on or before the first day of March, file with the commissioner a valuation of its certificates in force on December 31st last preceding: Provided, the commissioner may, in his discretion for cause shown, extend the time for filing such valuation for not more than two calendar months. Such report of valuation shall show, as reserve liabilities, the difference between the present mid-year value of the promised benefits provided in the certificates of such society in force and the present mid-year value of the future net rates as the same are in practice actually collected, not including therein any value for the right to make extra assessments and not including any amount by which the present mid-year value of future net contributions exceeds the present mid-year value of promised benefits on individual certificates. At the option of any society, in lieu of the above, the valuation may show the net tabular value which, in the case of monthly contributions, may be the means of the terminal reserve values for the end of the preceding and of the current certificate years. Such net tabular value as to certificates issued prior to the effective date of this chapter shall be determined in accordance with the provisions of law applicable thereto as of the date of issuance thereof and as to certificates issued on or after said date shall be not less than the reserves determined according to the commissioners’ reserve valuation method as hereinafter defined. If the rate or payment (by whatever name known) charged is less than the tabular net rate according to the basis of the valuation used, an additional reserve equal to the present value of the deficiency in such rates shall be set up and maintained as a liability. (Added by Stats. 1951, Ch. 1193.)
  90. 11134.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. )

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    This section sets how reserves must be calculated for certain insurance and related benefit certificates and contracts.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. ) ## 11134. Except as otherwise provided in Section 10489.6, reserves according to the commissioners’ reserve valuation method, for the life insurance and endowment benefits of certificates providing for a uniform amount of insurance and requiring the payment of uniform rates shall be the excess, if any, of the present value, at the date of valuation, of such future guaranteed benefits provided for by such certificates, over the then present value of any future modified net rates therefor. The modified net rates for any such certificate shall be such uniform percentage of the respective contract payment for such benefits that the present value, at the date of issue of the certificate, of all such modified net rates shall be equal to the sum of the then present value of such benefits provided for by the certificate and the excess of (a) over (b), as follows: (a) A net level annual payment equal to the present value at the date of issue, of such benefits provided for after the first certificate year, divided by the present value, at the date of issue, of an annuity of one per annum payable on the first and each subsequent anniversary of such certificate on which a payment falls due; provided, however, that such net level annual payment shall not exceed the net level annual payment on the 19-year payment whole life plan for insurance of the same amount at an age one year higher than the age at issue of such certificate. (b) A net one-year term payment for such benefits provided for in the first certificate year. Provided that for any certificate issued on or after January 1, 1986, for which the contract premium in the first policy year exceeds that of the second year and for which no comparable additional benefit is provided in the first year for such excess and which provides an endowment benefit or a cash surrender value or a combination thereof in an amount greater than such excess premium, the reserve according to the commissioners reserve valuation method as of any policy anniversary occurring on or before the assumed ending date defined herein as the first policy anniversary on which the sum of any endowment benefit and any cash surrender value then available is greater than such excess premium shall be the greater of the reserve as of such policy anniversary calculated as described in the preceding paragraph and the reserve as of such policy anniversary calculated as described in that paragraph, but with (i) the value defined in subdivision (a) of that paragraph being reduced by 15 percent of the amount of such excess first year premium, (ii) all present values of benefits and premiums being determined without reference to premiums or benefits provided for by the policy after the assumed ending date, (iii) the policy being assumed to mature on such date as an endowment, and (iv) the cash surrender value provided on such date being considered as an endowment benefit. In making the above comparison the mortality and interest bases stated in Sections 11136 and 11136.1 shall be used. Reserves according to the commissioners’ reserve valuation method for (1) life insurance certificates providing for a varying amount of insurance or requiring the payment of varying rates, (2) group annuity and pure endowment contracts purchased under a retirement plan or plan of deferred compensation, established or maintained by an employer (including a partnership or sole proprietorship) or by an employee organization, or by both, other than a plan providing individual retirement accounts or individual retirement annuities under Section 408 of the Internal Revenue Code, as now or hereafter amended, (3) disability and accidental death benefits in all certificates and contracts, and (4) all other benefits, except life insurance and endowment benefits in life insurance certificates, shall be calculated by a method consistent with the principles of the first paragraph of this section, except that any extra premiums charged because of impairments or special hazards shall be disregarded in the determination of modified net premiums. (Amended by Stats. 1982, Ch. 940, Sec. 7. Effective September 13, 1982.)
  91. 11135.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. )

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    The society must treat the present value of certain deferred payments as a liability and compute it using its assumed mortality and interest basis.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. ) ## 11135. The present value of deferred payments due under incurred claims or matured certificates shall be deemed a liability of the society and shall be computed upon the mortality and interest basis assumed by the society for such valuation. (Added by Stats. 1951, Ch. 1193.)
  92. 11136.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. )

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    This section sets minimum valuation standards for certain fraternal benefit society certificates and lets the commissioner approve other standards or require more reserves in some cases.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. ) ## 11136. Except as otherwise provided in Section 10489.4, such valuation shall be certified by a competent actuary or, at the expense of the society, verified by the actuary of the insurance supervisory official of the state of domicile of the society, and the legal minimum standard of valuation shall be as follows: (a) All benefits promised by certificates issued prior to September 22, 1952, and the rates therefor shall be valued in accordance with the provisions of law applicable thereto as of the date of issuance, but not lower than the standards and interest assumptions used in the calculation of rates for such benefits. (b) The minimum standard for the valuation of all certificates issued after September 21, 1952, and prior to January 1, 1972, shall be 3 percent per annum interest; in the case of certificates issued on and after January 1, 1972, and prior to January 1, 1980, the minimum standard for the valuation of all such certificates shall be 4 percent per annum interest; and in the case of certificates issued on and after January 1, 1980, the minimum standard for the valuation of all single premium certificates shall be 51/2 percent per annum interest and for the valuation of all other such certificates shall be 41/2 percent per annum interest, and the following tables: (1) For all ordinary certificates of life insurance issued on the standard basis, excluding any disability and accidental death benefits in such certificates—the American Men Ultimate Table of Mortality, with Bowerman’s or Davis’ Extension thereof, or, at the option of the society, the Commissioners 1941 Standard Ordinary Mortality Table or the Commissioners 1958 Standard Ordinary Mortality Table, using actual age of the insured for male risks and an age not more than six years younger than the actual age of the insured for female risks, and for such policies issued on or after the operative date of Section 10163.2 (i) the Commissioners 1980 Standard Ordinary Mortality Table, or (ii) at the election of the company for any one or more specified plans of life insurance, the Commissioners 1980 Standard Ordinary Mortality Table with Ten-Year Select Mortality Factors, or (iii) any ordinary mortality table, adopted after 1980 by the National Association of Insurance Commissioners, or its successor, that is approved by regulation promulgated or bulletin issued by the commissioner for use in determining the minimum standard of valuation for such policies. (2) For all industrial life insurance certificates issued on the standard basis, excluding any disability and accidental death benefits in such certificates—the 1941 Standard Industrial Mortality Table, for such certificates issued prior to the operative date of Section 10163.2, and for such policies issued on or after such operative date, the Commissioners 1961 Standard Industrial Mortality Table or any industrial mortality table, adopted after 1980 by the National Association of Insurance Commissioners, or its successor, that is approved by regulation promulgated or bulletin issued by the commissioner for use in determining the minimum standard of valuation for such policies. (3) For annuity and pure endowment certificates, excluding any disability and accidental death benefits in such certificates—the 1937 Standard Annuity Mortality Table, or the Annuity Mortality Table for 1949 Ultimate, or the Individual Annuity Mortality Table for 1971, or any individual annuity mortality table, adopted after 1980 by the National Association of Insurance Commissioners, or its successor, that is approved by regulation promulgated or bulletin issued by the commissioner for use in determining the minimum standard of valuation for such contracts, or any modification of any of these tables approved by the commissioner. (4) For disability benefits in or supplementary to ordinary certificates—Hunter’s Disability Table or the Class 3 Disability Table (1926), modified to conform to the contractual waiting period, or the tables of Period 2 disablement rates and the 1930 to 1950 termination rates of the 1952 Disability Study of the Society of Actuaries with due regard to the type of benefit, or the 1964 Commissioners Disability Table, or any tables of disablement rates and termination rates, adopted after 1980 by the National Association of Insurance Commissioners, or its successor, that are approved by regulation promulgated or bulletin issued by the commissioner for use in determining the minimum standard of valuation for such policies. Any such table shall, for active lives, be combined with a mortality table permitted for calculating the reserves for life insurance certificates. (5) For accidental death benefits in or supplementary to certificates—The Inter-Company Double Indemnity Mortality Table or the 1959 Accidental Death Benefits Table, or any accidental death benefits table, adopted after 1980 by the National Association of Insurance Commissioners, or its successor, that is approved by regulation promulgated or bulletin issued by the commissioner for use in determining the minimum standard of valuation for such policies. Any such table shall be combined with a mortality table permitted for calculating the reserves for life insurance certificates. (6) For temporary accident and health benefits in or supplementary to certificates—Class 3 Disability Table (1926) with Conference Modifications or the 1964 Commissioners Disability Table, or any tables of disablement rates and termination rates, adopted after 1980 by the National Association of Insurance Commissioners, or its successor, that are approved by regulation promulgated or bulletin issued by the commissioner for use in determining the minimum standard of valuation for such policies. (7) For life insurance issued upon the substandard basis and other special benefits—such tables as may be approved by the commissioner. (c) The commissioner may, in his discretion, accept other standards for valuation if he finds that the reserves produced thereby will not be less in the aggregate than reserves computed in accordance with the minimum valuation standard prescribed. Whenever the mortality experience under the certificates valued on the same mortality table is in excess of the expected mortality according to such table for a period of three consecutive years, the commissioner may require additional reserves when in his judgment deemed necessary on account of such certificates. (d) Notwithstanding the provisions of subdivisions (a) and (b), any society, with the consent of the insurance supervisory official of the state of domicile of the society, and under such conditions, if any, which he may impose, may establish and maintain reserves on its certificates in excess of the reserves required thereunder, but the contractual rights of any insured member shall not be affected thereby. (Amended by Stats. 2009, Ch. 234, Sec. 12. (AB 299) Effective January 1, 2010.)
  93. 11137.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. )

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    If a society’s admitted assets are below required reserves plus accrued liabilities, the commissioner must calculate the deficiency and issue a written requisition to fix it within 30 days to 6 months, with possible extension beyond six months.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. ) ## 11137. Whenever the commissioner finds from any financial statement or valuation report made to him or her by any society authorized to do business in this state or from a filed report on examination of any such society that the admitted assets of the society are less than the sum of its required reserves and accrued liabilities, the commissioner shall determine the amount of that deficiency and shall issue a written requisition to the society to remove, repair, or make good that deficiency within such period as he or she shall designate, not less than 30 days nor more than six months from the service of the requisition, except that if the commissioner believes the interests of the certificate holders of such society will best be served by extending the period of time beyond six months, he or she may do so for such period or periods of time as he or she in his or her discretion deems best. The commissioner may also by official order prohibit the society, while that deficiency exists, from issuing any new contracts of insurance in this state, and in case of a domestic society, from issuing any new contracts in this state or elsewhere. If the society fails or is unable to make good the deficiency within the time specified in the order, the commissioner shall proceed against the society under the provisions of Article 14 (commencing with Section 1010) of Chapter 1 of Part 2 of Division 1 on the ground that its further transaction of business will be hazardous to its certificate holders, its creditors, or the public. In the case of a foreign society the commissioner may also, or in lieu of that proceeding, revoke its certificate of authority to do business in this state or refuse to issue a renewal certificate of authority. (Amended by Stats. 1995, Ch. 166, Sec. 13. Effective January 1, 1996.)
  94. 11138.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. )

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    The commissioner may examine a domestic society’s affairs, books, papers, and documents, and the society must pay the examination and valuation expenses.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. ) ## 11138. The commissioner, or any person he may appoint, shall have the power of visitation and examination into the affairs of any domestic society. He may employ assistants for the purpose of such examination, and he, or any person he may appoint, shall have free access to all the books, papers and documents that relate to the business of the society. The minutes of the proceedings of the supreme governing or legislative body and of the board of directors or corresponding body of a society shall be in the English language. In making any such examination the commissioner may summon and qualify as witnesses under oath and examine its officers, agents and employees or other persons in relation to the affairs, transactions and condition of the society. The report of the commissioner or in his discretion a summary thereof, and such recommendations or statements of the commissioner as may accompany such report, shall be read at the first meeting of the board of directors or corresponding body of the society following the receipt thereof, and if directed so to do by the commissioner shall also be read at the first meeting of the supreme legislative or governing body of the society following the receipt thereof. The expense of each examination and of each valuation, including compensation and actual expense of examiners, shall be paid by the society examined or whose certificates are valued, upon statements furnished by the commissioner. (Amended by Stats. 1980, Ch. 209, Sec. 5.)
  95. 11139.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. )

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    The commissioner generally may not adopt or file a report of examination as an official document unless notice is given and a demanded hearing is held. The commissioner may also direct the society to take corrective steps, and may use adopted reports as evidence in proceedings.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. ) ## 11139. No report of examination shall be adopted by the commissioner or filed by him as an official document except after a notice is given and a hearing held thereon, if demanded, in accordance with the provisions of Section 11141. The commissioner in his determination made upon the basis of his findings from the record of such hearing may direct the society to comply with such recommendations or take such other corrective steps as may be contained therein. In any action or proceeding in the name of the commissioner or instituted in his behalf against the society, such report, if adopted by the commissioner and filed as an official document shall be admissible in evidence and shall be prima facie evidence of the facts stated therein. Nothing herein contained shall preclude the commissioner from instituting any proceeding under Section 11137 of this chapter at any time or from using as proof in such proceeding any report of examination or part thereof, whether or not such report has been adopted and filed. (Added by Stats. 1951, Ch. 1193.)
  96. 11140.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. )

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    The insurance commissioner may examine foreign societies seeking to do business in the state, appoint others to do so, and require the society to pay examiners’ compensation and expenses.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. ) ## 11140. The commissioner, or any person whom he may appoint, may examine any foreign society, transacting or applying for admission to transact business in this State. He may employ assistants and he, or any person he may appoint, shall have free access to all books, papers and documents that relate to the business of the society. He may summon, qualify as witnesses under oath and examine any persons in relation to the affairs, transactions and condition of the society. He may in his discretion accept, in lieu of such examination, the examination of the insurance department of the state, territory, district, province or country where such society is organized. The compensation and actual expenses of the examiners making any examination or general or special valuation shall be paid by the society examined or by the society whose certificates obligations have been valued, upon statements furnished by the commissioner. (Repealed and added by Stats. 1951, Ch. 1193.)
  97. 11141.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. )

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    The commissioner may not make public certain financial statements, reports, or findings about a society until the society has been served a copy and given a reasonable chance to respond.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. ) ## 11141. Pending, during or after an examination or investigation of a society, either domestic or foreign, the commissioner shall make public no financial statement, report or finding, nor shall he permit to become public any financial statement, report or finding affecting the status, standing or rights of any society, until a copy thereof shall have been served upon the society at its principal office and the society shall have been afforded a reasonable opportunity to answer any such financial statement, report or finding, and to make such showing in connection therewith as it may desire. (Repealed and added by Stats. 1951, Ch. 1193.)
  98. 11142.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. )

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    A person must not circulate false, misleading, or incomplete insurance-related statements or comparisons covered by this section.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. ) ## 11142. No person shall cause or permit to be made, issued or circulated in any form: (a) Any misrepresentation or false or misleading statement concerning the terms, benefits or advantages of any fraternal insurance contract now issued or to be issued in this State; or the financial condition of any society or the legal reserve system upon which it operates; or any other matter concerning any society; (b) Any false or misleading estimate or statement concerning the dividends or shares of surplus paid or to be paid by any society on any insurance contract; or (c) Any incomplete comparison of an insurance contract of one society with an insurance contract of another society or insurer for the purpose of inducing the lapse, forfeiture or surrender of any insurance contract. (Repealed and added by Stats. 1951, Ch. 1193.)
  99. 11143.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. )

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    A comparison of insurance contracts must include detailed comparisons of gross rates, rates after any dividend or other reduction, cash value increases, and the benefits provided over the possible duration of each contract.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. ) ## 11143. A comparison of insurance contracts is incomplete if it does not compare in detail: (a) The gross rates, and the gross rates less any dividend or other reduction allowed at the date of the comparison; (b) Any increase in cash values, and all the benefit provided by each contract for the possible duration thereof as determined by the life expectancy of the insured. (Repealed and added by Stats. 1951, Ch. 1193.)
  100. 11144.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. )

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    A comparison of insurance contracts is incomplete if it leaves out specified benefits, premium differences, or limiting terms.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. ) ## 11144. A comparison of insurance contracts is incomplete if it omits from consideration: (a) Any benefit or value provided in the contract, (b) Any differences as to amount or period of premiums or payments, (c) Any differences in limitations or conditions or provisions which directly or indirectly affect the benefits. (Repealed and added by Stats. 1951, Ch. 1193.)
  101. 11145.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. )

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    When judging whether a comparison or statement is incomplete or misleading, the insured is presumed not to know the contents of the contract involved.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. ) ## 11145. In any determination of the incompleteness or misleading character of any comparison or statement, it shall be presumed that the insured had no knowledge of any of the contents of the contract involved. (Repealed and added by Stats. 1951, Ch. 1193.)
  102. 11146.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. )

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    A person who violates Sections 11142 to 11145, or knowingly takes compensation or a commission from that violation, can be fined, jailed, or both.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 7. Financial Matters [11120 - 11146] ( Article 7 added by Stats. 1951, Ch. 1193. ) ## 11146. Any person who violates any provision of Sections 11142 to 11145 or knowingly receives any compensation or commission by or in consequence of such violation, shall upon conviction be punished by a fine not exceeding one thousand dollars ($1,000), or by imprisonment in the county jail for not more than six months, or by both fine and imprisonment. (Amended by Stats. 1983, Ch. 1092, Sec. 183. Effective September 27, 1983. Operative January 1, 1984, by Sec. 427 of Ch. 1092.)
  103. 11160.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 8. Violations and Penalties [11160 - 11165] ( Article 8 added by Stats. 1951, Ch. 1193. )

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    Compensation may not be paid to employees, officers, or any person for helping, negotiating, or promoting a merger, consolidation, or reinsurance, unless the contract or an approved expense statement fully discloses it.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 8. Violations and Penalties [11160 - 11165] ( Article 8 added by Stats. 1951, Ch. 1193. ) ## 11160. Compensation shall not be paid to any employee or officer by whatever name known of either of the parties to any contract of merger, consolidation or reinsurance for directly or indirectly aiding in effecting such contract. Except as fully expressed in such contract or itemized statement of expenses approved by the supervising insurance authorities, compensation for negotiating, aiding or promoting such a consolidation, merger or reinsurance shall not be paid to any person. (Repealed and added by Stats. 1951, Ch. 1193.)
  104. 11161.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 8. Violations and Penalties [11160 - 11165] ( Article 8 added by Stats. 1951, Ch. 1193. )

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    A person who violates Section 11160 commits a felony and may be fined up to $10,000, imprisoned, or both.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 8. Violations and Penalties [11160 - 11165] ( Article 8 added by Stats. 1951, Ch. 1193. ) ## 11161. Any person violating Section 11160 is guilty of a felony and punishable by a fine not exceeding ten thousand dollars ($10,000) or imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code, or both. (Amended by Stats. 2011, Ch. 15, Sec. 214. (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.)
  105. 11162.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 8. Violations and Penalties [11160 - 11165] ( Article 8 added by Stats. 1951, Ch. 1193. )

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    Officers, directors, agents, and employees of a fraternal benefit society must not borrow society funds, act as endorser or surety on the society’s loans to others, or be an obligor for money borrowed or loaned by the society.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 8. Violations and Penalties [11160 - 11165] ( Article 8 added by Stats. 1951, Ch. 1193. ) ## 11162. It is a felony, punishable by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code, for any officer, director, agent or employee of any fraternal benefit society to, directly or indirectly, for himself or as partner or agent of others: (a) Borrow any of the funds of such society. (b) Become endorser or surety for loans by the society to others. (c) In any manner be obligor for moneys borrowed or loaned by such society. (Amended by Stats. 2011, Ch. 15, Sec. 215. (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.)
  106. 11163.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 8. Violations and Penalties [11160 - 11165] ( Article 8 added by Stats. 1951, Ch. 1193. )

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    Certain officers, trustees, agents, or employees of a fraternal benefit society must not take anything of value in connection with procuring a loan from the society’s trust or other funds.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 8. Violations and Penalties [11160 - 11165] ( Article 8 added by Stats. 1951, Ch. 1193. ) ## 11163. It is a felony, punishable by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code, for any officer, trustee, agent or employee of a fraternal benefit society to ask, receive, or consent or agree to receive anything of value for procuring or endeavoring to procure a loan to any person from the trust funds of, or funds belonging to, a fraternal benefit society. (Amended by Stats. 2011, Ch. 15, Sec. 216. (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.)
  107. 11164.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 8. Violations and Penalties [11160 - 11165] ( Article 8 added by Stats. 1951, Ch. 1193. )

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    A person who is not authorized under Section 11013 must not solicit or help procure membership in a nonadmitted fraternal benefit society.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 8. Violations and Penalties [11160 - 11165] ( Article 8 added by Stats. 1951, Ch. 1193. ) ## 11164. Any person not authorized pursuant to Section 11013 who solicits membership for, or in any manner assists in procuring membership in, any nonadmitted fraternal benefit society is guilty of a misdemeanor and punishable by fine not less than one hundred dollars ($100) nor more than four hundred dollars ($400). (Amended by Stats. 1983, Ch. 1092, Sec. 185. Effective September 27, 1983. Operative January 1, 1984, by Sec. 427 of Ch. 1092.)
  108. 11165.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 8. Violations and Penalties [11160 - 11165] ( Article 8 added by Stats. 1951, Ch. 1193. )

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    A person who knowingly or willfully makes a false or fraudulent statement in a membership application or to get money or benefits from a fraternal benefit society commits a misdemeanor.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 8. Violations and Penalties [11160 - 11165] ( Article 8 added by Stats. 1951, Ch. 1193. ) ## 11165. Any person who knowingly or willfully makes any false or fraudulent statement or representation in or with reference to any application for membership, or for the purpose of obtaining money or benefit from any fraternal benefit society is guilty of a misdemeanor and punishable by fine not less than one hundred dollars ($100) nor exceeding one thousand dollars ($1,000), or imprisonment in the county jail not less than 30 days nor exceeding one year, or both. (Amended by Stats. 1983, Ch. 1092, Sec. 186. Effective September 27, 1983. Operative January 1, 1984, by Sec. 427 of Ch. 1092.)
  109. 112.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Classes of Insurance [100 - 124.5] ( Chapter 1 enacted by Stats. 1935, Ch. 145. )

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    This section says what counts as burglary insurance.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Classes of Insurance [100 - 124.5] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## 112. Burglary insurance includes: (a) Insurance against loss by burglary or theft or both. (b) Insurance against loss of, or destruction of, or damage to, any of the following property, resulting from any cause, when such insurance includes loss thereof by burglary or theft, or both, and excludes coverage of property while in the custody of, or possession of, or being transported by, any carrier for hire or in the mail: Moneys, stamps, coins, bullion, securities, notes, drafts, acceptances or instruments of like kind or character, accounts, books, maps, manuscripts, indexes and other valuable papers, documents and records incidental to the business or profession or activity in which the insured is engaged. (c) Insurance by means of an all-risk policy of the type commonly known as the “Personal Property Floater” against any and all kinds of loss of or damage to, or loss of use of, any personal property other than merchandise. (Amended by Stats. 1947, Ch. 630.)
  110. 113.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Classes of Insurance [100 - 124.5] ( Chapter 1 enacted by Stats. 1935, Ch. 145. )

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    Credit insurance is defined here, and insurance cannot be written as credit insurance if it is financial guaranty insurance under Section 12100.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Classes of Insurance [100 - 124.5] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## 113. Credit insurance includes insurance of persons engaged in business against loss by reason of extending credit to those dealing with them, and insurance against loss from the failure of persons to meet existing or contemplated obligations to the insured. However, no insurance may be written as credit insurance if it falls within the definition of financial guaranty insurance as set forth in Section 12100. (Amended by Stats. 1990, Ch. 1032, Sec. 2.)
  111. 114.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Classes of Insurance [100 - 124.5] ( Chapter 1 enacted by Stats. 1935, Ch. 145. )

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    Sprinkler insurance is defined to include certain water-damage losses connected to sprinklers, pumps, other fire-extinguishing equipment, or water pipes.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Classes of Insurance [100 - 124.5] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## 114. Sprinkler insurance includes insurance against loss through damage by water to goods or premises arising from the breakage or leakage of sprinklers, pumps, or other apparatus placed for extinguishing fires, or loss arising from the breakage or leakage of water pipes, or through accidental injury to such sprinklers, pumps, or other apparatus. (Enacted by Stats. 1935, Ch. 145.)
  112. 1140.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Incorporated Insurers [1140 - 1260] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General [1140 - 1142] ( Heading of Article 1 amended by Stats. 1945, Ch. 27. )

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    Incorporated insurers must follow the general corporation law like other corporations, unless this code says otherwise.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Incorporated Insurers [1140 - 1260] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General [1140 - 1142] ( Heading of Article 1 amended by Stats. 1945, Ch. 27. ) ## 1140. Except as otherwise provided in this code, incorporated insurers are subject to the provisions of the general corporation law in like manner with other corporations. (Enacted by Stats. 1935, Ch. 145.)
  113. 1140.1.

    ## 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 2. Incorporated Insurers [1140 - 1260] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General [1140 - 1142] ( Heading of Article 1 amended by Stats. 1945, Ch. 27. )

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    This section lets a domestic incorporated life insurer organize under the Nonprofit Mutual Benefit Corporation Law, and lets an existing one convert with the commissioner’s prior consent and a $7,000 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 2. Incorporated Insurers [1140 - 1260] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General [1140 - 1142] ( Heading of Article 1 amended by Stats. 1945, Ch. 27. ) ## 1140.1. (a) A domestic incorporated life insurer may be organized under the Nonprofit Mutual Benefit Corporation Law. With the prior consent of the commissioner, an existing domestic incorporated life insurer organized under the general corporation law may be converted to a domestic incorporated life insurer under the Nonprofit Mutual Benefit Corporation Law pursuant to Section 911 of the Corporations Code. The consent shall be obtained by filing an application accompanied by any information that the commissioner may require, and by submitting a filing fee of seven thousand dollars ($7,000). (b) Except as otherwise provided in this code, a domestic incorporated life insurer organized under the Nonprofit Mutual Benefit Corporation Law shall be subject to that law in the same manner as other corporations organized under that law. In the case of a conflict between the Insurance Code and the Nonprofit Mutual Benefit Corporation Law, the provisions of the Insurance Code shall prevail. (c) A life insurer organized under the Nonprofit Mutual Benefit Corporation Law shall have the same powers held by, and shall be subject to all provisions of this code applicable to, a domestic incorporated stock life insurer, except for Section 1140. An insurer so organized shall have a surplus (in lieu of paid-in capital and surplus) at least equal to the sum of the paid-in capital and surplus required of a stock insurer admitted for the same classes. In addition, an insurer so organized shall be subject to the same premium tax obligations as a stock insurer. (d) Officers, directors, and other managers of domestic life insurers organized under the Nonprofit Mutual Benefit Corporation Law shall not be entitled to any rights, preferences, or privileges that are not allowed for the officers, directors, or managers of an insurer of the same class organized under the general corporation law. (e) For a life insurer organized under the Nonprofit Mutual Benefit Corporation Law, all references in this code to “shareholders” shall be interpreted to mean “members,” and all references to “shares,” “stocks,” or “securities” shall mean “memberships,” as defined in the Nonprofit Mutual Benefit Corporation Law. (f) The issuance of memberships to policyholders that are not natural persons shall be subject to the provisions of Article 8 (commencing with Section 820) of Chapter 1 of Part 2 of Division 1. A domestic incorporated life insurer organized under the Nonprofit Mutual Benefit Corporation Law shall have at least one member. The redemption of memberships, other than for policyholders that are not natural persons, shall be subject to the same rules as those applicable to the payment of dividends by a domestic incorporated stock life insurer. (Added by Stats. 2004, Ch. 376, Sec. 1. Effective January 1, 2005.)
  114. 1140.5.

    ## 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 2. Incorporated Insurers [1140 - 1260] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General [1140 - 1142] ( Heading of Article 1 amended by Stats. 1945, Ch. 27. )

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    Certain proxy-related documents for domestic insurers must be filed with the commissioner, a $136 fee paid, and the documents cannot be used for at least 10 days unless the commissioner shortens the 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 2. Incorporated Insurers [1140 - 1260] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General [1140 - 1142] ( Heading of Article 1 amended by Stats. 1945, Ch. 27. ) ## 1140.5. (a) Notwithstanding any other law, a copy of every form of proxy or written consent or authorization for use at any meeting or proceeding of shareholders or stockholders of any domestic insurer to evidence authority to cast the vote of any shareholder or stockholder, or to record the consent or the authorization of any shareholder or stockholder to any action of the insurer, and a copy of every solicitation, announcement, or advertisement used to obtain, or to influence any shareholder or stockholder to sign, any proxy, or written consent or authorization shall be filed with the commissioner, accompanied by a filing fee of one hundred thirty-six dollars ($136), by the person intending to use, issue, publish, or circulate the document. This document shall not be used, issued, published, or circulated before a period of 10 days following the date of its filing, or any shorter period that may be designated by the commissioner, has elapsed. Within the 10-day or a shorter period, the commissioner may disapprove of any document filed with him or her pursuant to this section, stating his or her reasons therefor in writing, in which case, the document shall not be used, issued, published, or circulated. (b) Any person who fails to make the filing required by this section and who thereafter uses any document required to be filed, uses the document before it has been filed with the commissioner for the period required, or uses the document after receiving written notice that the document has been disapproved by the commissioner is guilty of a misdemeanor. It shall be unlawful to use any proxy or consent obtained in violation of this section. The superior court of the State of California in and for the county in which is located the principal place of business of the insurer shall have jurisdiction to enforce this section and the regulations promulgated pursuant to this section, and to grant appropriate relief upon the verified petition of the commissioner, the domestic insurer, or any of its shareholders or stockholders. (c) The purposes of this section are: to ensure that the shareholders, stockholders, or other persons entitled to vote or give written consents or authorizations are provided with adequate and accurate information regarding the affairs of the insurers in which they have interests, the interests of those soliciting proxies or written consents or authorizations and of those upon whose behalf the solicitations are made, and the matters as to which proxies, written consents, or authorizations are solicited; and to prevent fraud or deception in connection with proxies, proxy statements, or other proxy solicitations. The commissioner may make rules and regulations in furtherance of the purposes of this section. These rules and regulations may differ as to different classes and types of insurers. (d) This section shall not apply to any domestic insurer having fewer than 100 shareholders or stockholders and shall not apply to any domestic insurer if 95 percent or more of its stock is owned or controlled by a parent or an affiliated insurer and the remaining shares of stock are owned by fewer than 500 shareholders or stockholders. Any domestic insurer that files with the federal Securities and Exchange Commission forms of proxies, consents, and authorizations complying with the requirements of the federal Securities Exchange Act of 1934 (15 U.S.C. Sec. 78a et seq.) and the amendments thereto and the applicable regulations thereunder, is exempt from this section. (Amended by Stats. 2017, Ch. 534, Sec. 25. (AB 1699) Effective January 1, 2018.)
  115. 11400.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10A. Firemen's, Policemen's,or Peace Officers’ Benefit and Relief Associations [11400 - 11407] ( Chapter 10A added by Stats. 1935, Ch. 161. )

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    Certain firemen’s, policemen’s, and peace officers’ benefit and relief associations are subject to this chapter, unless ERISA preempts it; an association operating strictly under this chapter is generally not subject to other insurance laws or code provisions unless those laws expressly say otherwise.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10A. Firemen's, Policemen's,or Peace Officers’ Benefit and Relief Associations [11400 - 11407] ( Chapter 10A added by Stats. 1935, Ch. 161. ) ## 11400. Firemen's, policemen’s or peace officers’ benefit and relief associations now existing, or that may be formed hereafter for the purpose of aiding their members or dependents of their members in case of sickness, accident, distress, or death, shall be subject to this chapter, to the extent not preempted by the federal Employee Retirement Income Security Act of 1974 (ERISA). An association that operates strictly in accordance with this chapter shall not be subject to any other provision of this code or to any law of this state relating to insurance, whether now existing or hereafter enacted, except when expressly designated in that law. (Amended by Stats. 2020, Ch. 365, Sec. 1. (SB 1192) Effective January 1, 2021.)
  116. 11401.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10A. Firemen's, Policemen's,or Peace Officers’ Benefit and Relief Associations [11400 - 11407] ( Chapter 10A added by Stats. 1935, Ch. 161. )

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    An association may not operate or do business in the state without a certificate of authority, must renew it after certain changes, and may need to reapply if it is revoked.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10A. Firemen's, Policemen's,or Peace Officers’ Benefit and Relief Associations [11400 - 11407] ( Chapter 10A added by Stats. 1935, Ch. 161. ) ## 11401. (a) An association shall not operate or do business in this state without a certificate of authority. The commissioner shall issue a certificate of authority to any association unless the commissioner determines, after examination, that it does not comply with the provisions of this chapter. The filing fee for the application for the certificate of authority shall be one thousand four hundred ten dollars ($1,410). (b) An association shall renew its certificate of authority within 30 days after a change in name or address or before a merger. (c) (1) The commissioner may revoke the certificate of authority for an association that failed to renew its certificate of authority in compliance with subdivision (b), after giving reasonable written notice mailed to the last address of the association registered with the department. (2) The commissioner may revoke the certificate of authority for an association that has a dissolved, suspended, or otherwise inactive status according to the records of the Secretary of State, after giving reasonable written notice mailed to the last address of the association registered with the department. (3) To obtain a reissue of a certificate of authority revoked pursuant to this subdivision, an association shall apply to the commissioner pursuant to subdivision (a). (Amended by Stats. 2024, Ch. 444, Sec. 6. (SB 577) Effective January 1, 2025.)
  117. 11401.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10A. Firemen's, Policemen's,or Peace Officers’ Benefit and Relief Associations [11400 - 11407] ( Chapter 10A added by Stats. 1935, Ch. 161. )

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    Certain associations must file a qualified actuary opinion with the commissioner about reserves and related actuarial items, follow update deadlines, and include supporting memoranda; some associations are exempt.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10A. Firemen's, Policemen's,or Peace Officers’ Benefit and Relief Associations [11400 - 11407] ( Chapter 10A added by Stats. 1935, Ch. 161. ) ## 11401.5. (a) (1) Each association that holds a certificate of authority pursuant to this chapter and that issues long-term disability or long-term care policies or contracts shall submit to the commissioner the opinion of a qualified actuary as to whether the reserves and related actuarial items that support the policies or contracts issued pursuant to this chapter, including policies and contracts issued by entities established by these associations that provide benefits described in this chapter, are expected to be adequate to satisfy contractual provisions, are based on reasonable assumptions, and are based on actuarial standards of practice published by the American Academy of Actuaries and the Actuarial Standards Board. An association that holds a certificate of authority pursuant to this chapter shall file its opinion no later than July 1, 2021, and that opinion shall have been completed no earlier than December 31, 2019. Thereafter, an association shall submit a new actuary opinion to the commissioner within no more than four years from the date of its last opinion on file with the commissioner. (2) An association is considered to have issued a long-term care or disability policy or contract if it self-funds all or part of the resulting obligation. An association that markets long-term policies or contracts issued by an insurer that is admitted by the department to offer insurance products in the state is exempt from this reporting requirement. (3) An association seeking a certificate of authority pursuant to this chapter shall file an opinion, to the extent feasible, that establishes that it would have adequate resources to provide benefits described in this chapter as required to satisfy its proposed contractual obligations. (b) The opinion required by subdivision (a) shall include supporting memoranda from the same qualified actuary as to whether the reserves and related actuarial items held in support of the policies and contracts, when considered in light of the assets held by the association with respect to the reserves and related actuarial items, including, but not limited to, the investment earnings on the assets and the considerations anticipated to be received and retained under the policies and contracts, shall make adequate provision for the association’s obligations under the policies and contracts, including, but not limited to, the benefits and any administrative and operating expenses associated with the policies and contracts. (c) The opinion required by subdivision (a) shall be governed by the following provisions: (1) It shall include supporting memoranda consistent with actuarial standards of practice published by the American Academy of Actuaries and the Actuarial Standards Board. (2) If the association fails to provide an opinion and supporting memoranda to the commissioner that meets the requirements of this section, the commissioner shall notify the association of the deficiencies in the filing, and shall make a specific request that identifies the issues that should be addressed in an amended filing. The requests shall be consistent with actuarial standards of practice published by the American Academy of Actuaries and the Actuarial Standards Board. (d) Documents, materials, or other information, including the opinion with supporting memoranda, submitted pursuant to this section that are in the possession or control of the Department of Insurance and that are obtained by, created by, or disclosed to the commissioner or any other person pursuant to this section, are recognized by this state as being proprietary and to contain trade secrets. Those documents, materials, or other information shall be confidential by law and privileged, shall not be subject to disclosure by the commissioner 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 from the commissioner or admissible into evidence, in a private civil action if obtained from the commissioner. The commissioner shall not otherwise make those documents, materials, or other information public without the prior written consent of the association. (Amended by Stats. 2021, Ch. 615, Sec. 313. (AB 474) Effective January 1, 2022. Operative January 1, 2023, pursuant to Sec. 463 of Stats. 2021, Ch. 615.)
  118. 11401.6.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10A. Firemen's, Policemen's,or Peace Officers’ Benefit and Relief Associations [11400 - 11407] ( Chapter 10A added by Stats. 1935, Ch. 161. )

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    An association that self-funds some or all benefits must put the required notice, or commissioner-approved alternative wording, into certain contracts and coverage certificates, in capital letters and at least 12-point type.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10A. Firemen's, Policemen's,or Peace Officers’ Benefit and Relief Associations [11400 - 11407] ( Chapter 10A added by Stats. 1935, Ch. 161. ) ## 11401.6. An association that self-funds all or part of the benefits provided under this chapter shall include the following language, or other language approved by the commissioner, in all contracts that are not regulated by the department, and in certificates evidencing coverage under those contracts, in capital letters and in a minimum of 12-point type: “ALL OR A PORTION OF THE BENEFITS PROVIDED BY THIS CONTRACT ARE NOT SUBJECT TO REGULATION BY THE CALIFORNIA DEPARTMENT OF INSURANCE, AND THE CONTRACT IS NOT GUARANTEED BY THE CALIFORNIA LIFE AND HEALTH INSURANCE GUARANTEE ASSOCIATION.” (Added by Stats. 2020, Ch. 365, Sec. 3. (SB 1192) Effective January 1, 2021.)
  119. 11401.7.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10A. Firemen's, Policemen's,or Peace Officers’ Benefit and Relief Associations [11400 - 11407] ( Chapter 10A added by Stats. 1935, Ch. 161. )

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    Covered associations must provide certain benefit documents to a member who asks in writing, within 30 days.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10A. Firemen's, Policemen's,or Peace Officers’ Benefit and Relief Associations [11400 - 11407] ( Chapter 10A added by Stats. 1935, Ch. 161. ) ## 11401.7. Each association that holds a certificate of authority pursuant to this chapter and that issues long-term disability or long-term care policies or contracts shall, upon written request from a member, make available to that member the contract for benefits, certificate evidencing coverage thereunder, or other plan document that describes the benefits being provided to that member, within 30 days of the request. (Added by Stats. 2020, Ch. 365, Sec. 4. (SB 1192) Effective January 1, 2021.)
  120. 11402.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10A. Firemen's, Policemen's,or Peace Officers’ Benefit and Relief Associations [11400 - 11407] ( Chapter 10A added by Stats. 1935, Ch. 161. )

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    An association may be incorporated or unincorporated, but if it is incorporated it cannot issue, or be authorized to issue, shares of stock.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10A. Firemen's, Policemen's,or Peace Officers’ Benefit and Relief Associations [11400 - 11407] ( Chapter 10A added by Stats. 1935, Ch. 161. ) ## 11402. Such association may be incorporated or unincorporated, but if incorporated it shall neither issue nor be authorized to issue shares of stock. (Added by Stats. 1935, Ch. 161.)
  121. 11403.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10A. Firemen's, Policemen's,or Peace Officers’ Benefit and Relief Associations [11400 - 11407] ( Chapter 10A added by Stats. 1935, Ch. 161. )

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    This section says the association’s membership may include only the listed categories of public-safety and emergency personnel, plus people who qualified under those categories when they joined.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10A. Firemen's, Policemen's,or Peace Officers’ Benefit and Relief Associations [11400 - 11407] ( Chapter 10A added by Stats. 1935, Ch. 161. ) ## 11403. The membership of such association shall consist solely of the following or any combination thereof: (a) Members of police departments of municipal or public corporations or districts. (b) Members of fire departments of municipal or public corporations or districts. (c) Peace or law enforcement officers who are regular and salaried officers or employees of the state or of a single county or other political subdivision or public or municipal corporation. (d) Persons who are emergency medical services personnel and employed by a fire department of a city, county, or district. (e) Persons who at the time of becoming members of such association were qualified pursuant to subdivisions (a), (b), (c), or (d) of this section. (Amended by Stats. 1986, Ch. 467, Sec. 1.)
  122. 11404.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10A. Firemen's, Policemen's,or Peace Officers’ Benefit and Relief Associations [11400 - 11407] ( Chapter 10A added by Stats. 1935, Ch. 161. )

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    An association may not pay or promise any consideration to solicit or procure members or membership applications.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10A. Firemen's, Policemen's,or Peace Officers’ Benefit and Relief Associations [11400 - 11407] ( Chapter 10A added by Stats. 1935, Ch. 161. ) ## 11404. Such association shall not pay, promise or agree to pay, either directly or indirectly, any consideration of any nature for the solicitation or procuring of members or applications for membership. (Added by Stats. 1935, Ch. 161.)
  123. 11405.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10A. Firemen's, Policemen's,or Peace Officers’ Benefit and Relief Associations [11400 - 11407] ( Chapter 10A added by Stats. 1935, Ch. 161. )

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    The association’s trustees, directors, or governing body must be elected by the membership.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10A. Firemen's, Policemen's,or Peace Officers’ Benefit and Relief Associations [11400 - 11407] ( Chapter 10A added by Stats. 1935, Ch. 161. ) ## 11405. The trustees, directors or governing body of such association, by whatever name their office is known or designated, shall be elected by the membership of the association. (Added by Stats. 1935, Ch. 161.)
  124. 11406.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10A. Firemen's, Policemen's,or Peace Officers’ Benefit and Relief Associations [11400 - 11407] ( Chapter 10A added by Stats. 1935, Ch. 161. )

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    An association may not pay member-contributed money or property out as benefits to anyone except its members, their dependents, or written-nominee beneficiaries.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10A. Firemen's, Policemen's,or Peace Officers’ Benefit and Relief Associations [11400 - 11407] ( Chapter 10A added by Stats. 1935, Ch. 161. ) ## 11406. Moneys or property directly or indirectly contributed to such association by its members shall not be paid out as benefits to any persons other than its members, their dependents, or beneficiaries nominated in writing by them. (Added by Stats. 1935, Ch. 161.)
  125. 11407.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10A. Firemen's, Policemen's,or Peace Officers’ Benefit and Relief Associations [11400 - 11407] ( Chapter 10A added by Stats. 1935, Ch. 161. )

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    The association must be funded mainly by member contributions and donations.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10A. Firemen's, Policemen's,or Peace Officers’ Benefit and Relief Associations [11400 - 11407] ( Chapter 10A added by Stats. 1935, Ch. 161. ) ## 11407. Such association shall be supported mainly by contributions from its members, whether in the form of fees, dues, assessments, or otherwise, and by donations made to it from time to time. (Added by Stats. 1935, Ch. 161.)
  126. 1141.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Incorporated Insurers [1140 - 1260] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General [1140 - 1142] ( Heading of Article 1 amended by Stats. 1945, Ch. 27. )

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    Certain insurer directors, trustees, officers, agents, and related exchange personnel are not personally liable for covered tax- and charge-related payments or decisions, unless the underlying statute or ordinance had already been judicially invalidated.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Incorporated Insurers [1140 - 1260] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General [1140 - 1142] ( Heading of Article 1 amended by Stats. 1945, Ch. 27. ) ## 1141. No director, trustee, officer or agent of any insurer shall be subject to personal liability by reason of any payment or any determination not to contest or seek recovery of any payment made subsequent to June 4, 1944, or hereafter made, by or on behalf of such insurer on account of any tax, license, fee, deposit or other charge paid pursuant to the terms of any statute, law or ordinance of this or any other State, county, city or taxing authority, unless prior to such payment or determination such statute, law or ordinance shall have been judicially rendered invalid by action of the State court having final appellate jurisdiction in the premises or by action of the Supreme Court of the United States. This section is applicable not only to directors, trustees, officers and agents of insurers generally but also to reciprocal or interinsurance exchanges, members of their subscribers’ boards, their attorneys in fact and any director, trustee, officer and agent thereof. (Added by Stats. 1945, Ch. 27.)
  127. 1142.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Incorporated Insurers [1140 - 1260] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General [1140 - 1142] ( Heading of Article 1 amended by Stats. 1945, Ch. 27. )

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    The commissioner may allow an insurer, by written order, to acquire or keep an otherwise impermissible asset when hardship, financial embarrassment, or other good cause is shown.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Incorporated Insurers [1140 - 1260] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General [1140 - 1142] ( Heading of Article 1 amended by Stats. 1945, Ch. 27. ) ## 1142. In situations of hardship, financial embarrassment or where other good cause is shown the commissioner may, in his discretion, by written order, permit an insurer to acquire by gift, devise, bequest or other transfer an asset, or a part thereof, not otherwise permissible, or retain an asset, however obtained. Such order, or any amendments thereto, shall specify the asset and the mode of acquisition or retention which is to be permitted and shall specify such reasonable time as the commissioner may determine in his discretion for the retention, or further retention of such asset. At the end of such time or earlier if he determines circumstances warrant such action the commissioner may invoke the procedure of Section 1202 for the purpose of requiring the insurer to dispose of the asset, or a part thereof, so acquired or held. This section shall not apply to any asset of an insurer which: (1) Has been held for 25 years or more, and (2) Consists entirely of corporate securities, and (3) The value does not exceed more than one-tenth of 1 percent of the total assets of the insurer. The insurer may retain such an asset. (Added by Stats. 1965, Ch. 1547.)
  128. 11420.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 11. Change by Assessment Plan Insurer to Reserve Plan [11420 - 11490] ( Chapter 11 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Authorization and Effect [11420 - 11422] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    A domestic insurer writing life insurance on the assessment plan may convert itself into an incorporated life insurer on a reserve basis.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 11. Change by Assessment Plan Insurer to Reserve Plan [11420 - 11490] ( Chapter 11 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Authorization and Effect [11420 - 11422] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 11420. Any domestic insurer providing life insurance upon the assessment plan may transform itself into an incorporated life insurer issuing policies on a reserve basis with such name as its directors or trustees determine. If incorporated, such insurer may make the transformation by amendment of its articles and by-laws, either by a majority vote of its directors or trustees or in any other lawful manner. If unincorporated it may make the transformation by incorporating. (Enacted by Stats. 1935, Ch. 145.)
  129. 11421.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 11. Change by Assessment Plan Insurer to Reserve Plan [11420 - 11490] ( Chapter 11 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Authorization and Effect [11420 - 11422] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    After transforming and getting a certificate of authority from the commissioner, the insurer may take on the obligations and benefits of an incorporated insurer on a reserve basis.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 11. Change by Assessment Plan Insurer to Reserve Plan [11420 - 11490] ( Chapter 11 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Authorization and Effect [11420 - 11422] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 11421. After completing such transformation and procuring from the commissioner a certificate of authority to transact business in this State as an incorporated insurer issuing policies on a reserve basis, it may incur the obligations and enjoy the benefits of such insurer. (Enacted by Stats. 1935, Ch. 145.)
  130. 11422.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 11. Change by Assessment Plan Insurer to Reserve Plan [11420 - 11490] ( Chapter 11 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Authorization and Effect [11420 - 11422] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    A transformed insurer is treated as a continuation of the original insurer.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 11. Change by Assessment Plan Insurer to Reserve Plan [11420 - 11490] ( Chapter 11 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Authorization and Effect [11420 - 11422] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 11422. The transformed insurer is a continuation of the original insurer. Its officers elected before or during the transformation serve through their respective terms as provided in the articles and by-laws under which they were elected. Their successors shall be elected and serve as the law and its articles and by-laws provide after the transformation. Such transformation shall not affect existing suits, rights or contracts. (Enacted by Stats. 1935, Ch. 145.)
  131. 11440.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 11. Change by Assessment Plan Insurer to Reserve Plan [11420 - 11490] ( Chapter 11 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Capital Adjustments [11440 - 11443] ( Article 2 enacted by Stats. 1935, Ch. 145. )

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    A reorganized insurer must hold paid-in capital in stock shares separate from Section 11441 assets, and at least $200,000 of that capital must be paid up before it issues reserve-plan policies.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 11. Change by Assessment Plan Insurer to Reserve Plan [11420 - 11490] ( Chapter 11 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Capital Adjustments [11440 - 11443] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 11440. Any insurer so reorganized shall have assets representing a paid-in capital represented by shares of stock apart from any assets described in Section 11441. At least two hundred thousand dollars ($200,000) of that capital shall be paid up before the insurer issues any policies on the reserve plan. (Amended by Stats. 1982, Ch. 454, Sec. 115.)
  132. 11441.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 11. Change by Assessment Plan Insurer to Reserve Plan [11420 - 11490] ( Chapter 11 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Capital Adjustments [11440 - 11443] ( Article 2 enacted by Stats. 1935, Ch. 145. )

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    An insurer changing from an assessment plan to a reserve plan must use the relevant assets only for the benefit of the policyholders, and it may not count those assets as paid-in capital under section 11440.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 11. Change by Assessment Plan Insurer to Reserve Plan [11420 - 11490] ( Chapter 11 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Capital Adjustments [11440 - 11443] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 11441. All assets belonging before transformation to any such insurer or arising or accruing from policies issued upon the assessment plan, shall be used only for the benefit of the holders of such policies. Such assets shall not be used or considered as any part of the paid in capital provided for by section 11440. (Enacted by Stats. 1935, Ch. 145.)
  133. 11442.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 11. Change by Assessment Plan Insurer to Reserve Plan [11420 - 11490] ( Chapter 11 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Capital Adjustments [11440 - 11443] ( Article 2 enacted by Stats. 1935, Ch. 145. )

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    If the insurer’s assessment-plan assets and expected contributions are less than the value of benefits and matured liabilities, the insurer must set aside and keep a fund for section 11443.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 11. Change by Assessment Plan Insurer to Reserve Plan [11420 - 11490] ( Chapter 11 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Capital Adjustments [11440 - 11443] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 11442. If, at or after the time of the transformation, it appears, either from the last preceding annual report by such insurer to the commissioner, or from an investigation made by the commissioner, that the present value of the contributions to be received from the holders of policies on the assessment plan, together with all assets owned by the insurer that have been accumulated from assessments paid by members on that plan, are not equal to the present value of the benefits, including all matured liabilities, to be derived by members under the assessment plan, the insurer shall set aside and maintain a fund for the purpose set forth in section 11443. Such fund together with the present value of contributions and assets, shall equal the present value of such benefits. (Enacted by Stats. 1935, Ch. 145.)
  134. 11443.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 11. Change by Assessment Plan Insurer to Reserve Plan [11420 - 11490] ( Chapter 11 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Capital Adjustments [11440 - 11443] ( Article 2 enacted by Stats. 1935, Ch. 145. )

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    The Section 11442 fund must be used to pay matured liabilities under the assessment plan when other applicable assets are exhausted.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 11. Change by Assessment Plan Insurer to Reserve Plan [11420 - 11490] ( Chapter 11 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Capital Adjustments [11440 - 11443] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 11443. The fund required by Section 11442 shall be used for the payment of matured liabilities arising under the assessment plan when other assets applicable thereto are exhausted. It may be derived from the excess over two hundred thousand dollars ($200,000) of the paid-in capital of the insurer. It need be maintained only during the existence of conditions set forth in Section 11442. (Amended by Stats. 1982, Ch. 454, Sec. 116.)
  135. 11460.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 11. Change by Assessment Plan Insurer to Reserve Plan [11420 - 11490] ( Chapter 11 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Transfer of Insurance [11460- 11460.] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    Eligible members may transfer their insurance from the assessment plan to the nonassessable reserve basis, with no change in amount and no medical examination.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 11. Change by Assessment Plan Insurer to Reserve Plan [11420 - 11490] ( Chapter 11 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Transfer of Insurance [11460- 11460.] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 11460. Members of the insurer who are in good standing prior to the transformation may thereafter transfer their insurance, without change of amount and without medical examination, from the assessment plan to the nonassessable reserve basis at the reserve rates. The interest and the assets of the insurer credited to the person so transferring shall become a part of the assets of the insurer on the reserve basis. (Enacted by Stats. 1935, Ch. 145.)
  136. 11470.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 11. Change by Assessment Plan Insurer to Reserve Plan [11420 - 11490] ( Chapter 11 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Powers of Insurer After Transformation [11470 - 11472] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    After a transformation, the insurer must exercise the rights and powers and perform the duties that law gives or imposes on insurers writing the same classes of insurance.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 11. Change by Assessment Plan Insurer to Reserve Plan [11420 - 11490] ( Chapter 11 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Powers of Insurer After Transformation [11470 - 11472] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 11470. The insurer, after such transformation, shall exercise all the rights and powers and perform all the duties conferred or imposed by law upon insurers writing the classes of insurance written by it. (Enacted by Stats. 1935, Ch. 145.)
  137. 11471.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 11. Change by Assessment Plan Insurer to Reserve Plan [11420 - 11490] ( Chapter 11 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Powers of Insurer After Transformation [11470 - 11472] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    The insurer must exercise its rights and powers and perform its duties to protect rights and contracts that existed before reorganization.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 11. Change by Assessment Plan Insurer to Reserve Plan [11420 - 11490] ( Chapter 11 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Powers of Insurer After Transformation [11470 - 11472] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 11471. Such insurer shall exercise all the rights and powers and perform all the duties necessary to protect rights and contracts existing prior to reorganization. (Enacted by Stats. 1935, Ch. 145.)
  138. 11472.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 11. Change by Assessment Plan Insurer to Reserve Plan [11420 - 11490] ( Chapter 11 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Powers of Insurer After Transformation [11470 - 11472] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    The commissioner must exercise the powers and duties that apply to domestic insurers of the same class, and must issue a certificate of authority if the insurer meets the stated solvency and compliance conditions.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 11. Change by Assessment Plan Insurer to Reserve Plan [11420 - 11490] ( Chapter 11 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Powers of Insurer After Transformation [11470 - 11472] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 11472. The commissioner shall exercise the powers and discharge the duties, concerning any such insurer, that are applicable to domestic insurers issuing policies of the same class. He or she shall issue a certificate of authority to transact the proper classes of insurance in this state to any such insurer which is solvent as to its reserve basis policies under Article 13 (commencing with Section 980) of Chapter 1 of Part 2 of Division 1, and has fully complied with the laws of this state. (Amended by Stats. 1982, Ch. 454, Sec. 117.)
  139. 11490.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 11. Change by Assessment Plan Insurer to Reserve Plan [11420 - 11490] ( Chapter 11 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Valuation of Policies [11490- 11490.] ( Article 5 enacted by Stats. 1935, Ch. 145. )

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    A life insurer that has transformed its business under this chapter must value assessment policies and nonassessable reserve basis policies using specified valuation standards.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 11. Change by Assessment Plan Insurer to Reserve Plan [11420 - 11490] ( Chapter 11 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Valuation of Policies [11490- 11490.] ( Article 5 enacted by Stats. 1935, Ch. 145. ) ## 11490. Any life insurer which has transformed its business pursuant to this chapter shall value its assessment policies according to the standard of valuation which would be used in the absence of the transformation, and shall value its nonassessable reserve basis policies according to the standard of valuation set forth in Article 3 (commencing with Section 10478) of Chapter 5. The various kinds of insurance written shall be governed by the provisions of this code applicable thereto. (Amended by Stats. 1982, Ch. 454, Sec. 118.)
  140. 115.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Classes of Insurance [100 - 124.5] ( Chapter 1 enacted by Stats. 1935, Ch. 145. )

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    This section defines team and vehicle insurance as coverage for damage or legal liability for damage to property caused by using certain teams or vehicles, and for theft of all or part of the vehicle.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Classes of Insurance [100 - 124.5] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## 115. Team and vehicle insurance includes insurance against loss through damage or legal liability for damage, to property caused by the use of teams or vehicles other than ships, boats, or railroad rolling stock, whether by accident or collision or by explosion of engine, tank, boiler, pipe, or tire of the vehicle, and insurance against theft of the whole or part of such vehicle. (Enacted by Stats. 1935, Ch. 145.)
  141. 1152.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Incorporated Insurers [1140 - 1260] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Restrictions on Activities [1152 - 1155] ( Article 2 enacted by Stats. 1935, Ch. 145. )

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    Domestic incorporated stock insurers may pay dividends only from earned surplus, and they may not declare dividends from unrealized asset appreciation or certain asset exchanges unless the surplus has been realized or the assets are currently cash realizable.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Incorporated Insurers [1140 - 1260] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Restrictions on Activities [1152 - 1155] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 1152. (a) Domestic incorporated stock insurers, except those governed by Sections 10530, 12373, and 12640.06, shall be governed by the provisions of this section and, if the insurer is subject to registration pursuant to Sections 1215.4 and 1215.5, as to payment or distribution of dividends to stockholders. Such insurers may make dividends only from earned surplus. (b) No dividends shall be declared out of earned surplus derived from the mere net appreciation in the value of assets not yet realized, nor shall any dividends be declared from any part of such earned surplus derived from an exchange of assets, unless and until such earned surplus have been realized or unless the assets received are currently realizable in cash. (c) An insurer may declare and distribute a dividend otherwise prohibited by this section if (1) following payment of the dividend the insurer’s surplus as regards policyholders is (A) reasonable in relation to its outstanding liabilities and (B) adequate to its financial needs as prescribed in Section 1215.5, and (2) the commissioner has given approval for the dividend prior to payment. (d) For purposes of this section, “earned surplus” means unassigned funds, as required to be reported on the insurer’s annual statement. (Amended by Stats. 1993, Ch. 974, Sec. 1.8. Effective January 1, 1994.)
  142. 11520.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 12. Grants and Annuities Societies [11520 - 11524] ( Chapter 12 enacted by Stats. 1935, Ch. 145. )

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    Certain listed organizations and persons may receive property transfers if they agree to pay an annuity and first obtain a certificate of authority from the commissioner.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 12. Grants and Annuities Societies [11520 - 11524] ( Chapter 12 enacted by Stats. 1935, Ch. 145. ) ## 11520. The following organizations and persons may receive transfers of property, conditioned upon their agreement to pay an annuity to the transferor or the transferor’s nominee, after obtaining from the commissioner a certificate of authority so to do: (a) Any charitable, religious, benevolent or educational organization, pecuniary profit not being its object or purpose, after being in active operation for at least 10 years; provided, nevertheless, that 10 years of active operation shall not be required in case of: (1) A nonprofit corporation organized and controlled by a hospital licensed by the State Department of Health Services as a general acute care hospital pursuant to Chapter 2 (commencing with Section 1250) of Division 2 of the Health and Safety Code; and (2) An incorporated educational institution offering courses of instruction beyond high school, organized pursuant to Section 94757 of the Education Code, and which is, and for at least one year has been, qualified pursuant to Chapter 7 (commencing with Section 94700) of Part 59 of the Education Code to issue diplomas or degrees as defined in Sections 94724 and 94726 of that code; (b) Every organization or person maintaining homes for the aged for pecuniary profit. This section applies to organizations subject to and operating under Chapter 10 (commencing with Section 1770) of Division 2 of the Health and Safety Code. (c) This section shall become operative on January 1, 1997. (Repealed (in Sec. 292) and added by Stats. 1995, Ch. 758, Sec. 292.5. Effective January 1, 1996. Section operative January 1, 1997, by its own provisions.)
  143. 11520.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 12. Grants and Annuities Societies [11520 - 11524] ( Chapter 12 enacted by Stats. 1935, Ch. 145. )

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    A person may not do the chapter’s business in this state without first getting a certificate of authority from the commissioner.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 12. Grants and Annuities Societies [11520 - 11524] ( Chapter 12 enacted by Stats. 1935, Ch. 145. ) ## 11520.5. A person shall not transact in this state the business described in this chapter without first procuring a certificate of authority from the commissioner for that purpose. Application for that certificate shall be made on a form prescribed by the commissioner accompanied by a filing fee of four thousand two hundred thirty-three dollars ($4,233). The certificate shall not be granted until the applicant conforms to the requirements of this chapter and the laws of this state prerequisite to its issue. After the issuance, the holder shall continue to comply with the requirements of this chapter and the laws of this state. When a hearing is held under this section the proceedings shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, and the commissioner shall have all of the powers granted therein. Subject to the annual fee provisions herein, every certificate of authority issued or held under this chapter shall be for an indefinite term and, unless sooner revoked by the commissioner, shall terminate upon occurrence of any of the following: (a) Upon the holder’s ceasing to exist as a separate entity. (b) Upon the winding up or dissolution, or expiration or forfeiture of the corporate existence of a corporate holder thereof. (c) Upon winding up or dissolution of a holder not a corporation. (d) In any event upon surrender by the holder of its certificate of authority and cancellation of the same by the commissioner. The commissioner shall not cancel a surrendered certificate of authority until he or she is satisfied by examination, or otherwise, that the former holder has discharged its annuity liabilities to residents of this state or satisfactorily reinsured the same. Notwithstanding the preceding provisions for a certificate of authority of indefinite term, each holder of a certificate of authority under this chapter shall owe and pay in advance to the commissioner an annual fee of one hundred thirty-six dollars ($136), on account of a certificate of authority until its final termination or revocation. The fee shall be for annual periods commencing on July 1 of each year and ending on June 30 of each year and shall be due on each March 1 and shall be delinquent on and after each April 1. Each holder of a certificate of authority shall also be subject to the payment in advance of the following fees, as appropriate: (1) Two hundred eighty-three dollars ($283) for each amended certificate of authority caused by a change of the name of the holder. (2) Two hundred twelve dollars ($212) for the services and expenses of the commissioner in connection with the filing of amended articles by a holder. (3) Eight hundred forty-nine dollars ($849) for all services and expenses of the commissioner in connection with the withdrawal of a holder of a certificate of authority under this chapter. (e) Upon the receipt of a notice of filing of a petition by or against a certificate holder under the United States Bankruptcy Code for bankruptcy or reorganization, the commissioner shall cease imposing, billing, or collecting the annual fees due under this chapter and this section to the certificate holder. (f) Upon notice of the suspension of the corporate status of the certificate holder for a period of 12 months by the Secretary of State, the commissioner shall terminate the certificate of authority and shall deem the certificate to be terminated. (Amended by Stats. 2017, Ch. 534, Sec. 68. (AB 1699) Effective January 1, 2018.)
  144. 11520.6.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 12. Grants and Annuities Societies [11520 - 11524] ( Chapter 12 enacted by Stats. 1935, Ch. 145. )

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    Before issuing a certificate of authority for a grants and annuities society, the commissioner must review the applicant’s qualifications and must issue the certificate unless the applicant is materially deficient on one or more listed subjects.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 12. Grants and Annuities Societies [11520 - 11524] ( Chapter 12 enacted by Stats. 1935, Ch. 145. ) ## 11520.6. (a) Before granting a certificate of authority or amended certificate of authority as a grants and annuities society to any applicant, the commissioner shall consider the qualifications of the applicant with respect to the following subjects: (1) Minimum net worth and working capital. (2) Lawfulness and quality of investments. (3) Financial stability. (4) Reinsurance agreements. (5) Competency, character, and integrity of management. (6) Ownership and control. (7) Fairness and honesty of methods of doing business. (8) Risk to the public. (b) Upon consideration of all relevant qualifications, the commissioner shall issue a certificate of authority to an applicant, unless the commissioner finds that the applicant is materially deficient with respect to one or more of the subjects set forth in subdivision (a). (Added by Stats. 1993, Ch. 225, Sec. 1. Effective January 1, 1994.)
  145. 11521.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 12. Grants and Annuities Societies [11520 - 11524] ( Chapter 12 enacted by Stats. 1935, Ch. 145. )

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    The commissioner must require a certificate holder to keep a reserve fund for outstanding annuity contracts, and may revoke the certificate if the fund is not maintained.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 12. Grants and Annuities Societies [11520 - 11524] ( Chapter 12 enacted by Stats. 1935, Ch. 145. ) ## 11521. Upon granting to such organization or person a certificate of authority to receive such transfers, the commissioner shall require it to establish and maintain a reserve fund adequate to meet the future payments under its outstanding annuity contracts and in any event not less than an amount computed as follows: (a) In the case of annuities payable under agreements made prior to January 1, 1950, in accordance with the standard of valuation based upon McClintock’s table of mortality among annuitants, with interest assumption at 31/2 percent per annum. (b) In the case of annuities payable under agreements made on and after January 1, 1950, in accordance with the standard of valuation based upon the 1937 Standard Annuity Table, with interest assumption at 21/2 percent per annum, or other table of mortality derived from recent annuity experience, with interest assumption not higher than is currently yielded on safe securities, as may be prescribed by the commissioner. For any failure on its part to establish and maintain such reserve fund, the commissioner shall revoke its certificate of authority. (Amended by Stats. 1949, Ch. 338.)
  146. 11521.1.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 12. Grants and Annuities Societies [11520 - 11524] ( Chapter 12 enacted by Stats. 1935, Ch. 145. )

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    Certain annuities-related funds must be kept in a separate trust and kept apart from other assets.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 12. Grants and Annuities Societies [11520 - 11524] ( Chapter 12 enacted by Stats. 1935, Ch. 145. ) ## 11521.1. (a) The funds and other property, together with interest and dividends thereon and proceeds therefrom, conditioned upon issuance of the certificate holder’s contracts to pay annuities, shall be maintained under a separate trust agreement for reserves held for the benefit of California annuitants and shall be held legally and physically segregated from the other assets of the certificate holder. The amendments to this subdivision enacted during the 1993 portion of the 1993–94 Regular Session shall apply to any organization that is issued a new certificate of authority on or after January 1, 1994. Any grants and annuities society that holds a certificate of authority on January 1, 1994, and that is not in compliance with this subdivision as of that date, shall comply with these amendments by January 1, 1998. (b) Nothing in subdivision (a) shall prevent the certificate holder from withdrawing from time to time, pursuant to an appropriate resolution of its board of trustees, that amount or amounts as are determined, in a manner which is satisfactory to the commissioner, to be excess over and above its reserve required to be maintained under the provisions of Section 11521. (c) If the grants and annuities society will manage and direct investment of the reserve funds required under Section 11521, the California reserves may be held under a declaration of trust stating that the grants and annuities society will hold the funds in trust and invest funds or property held in trust in accordance with the requirements of this code. If a bank will manage or direct the investment of the California reserves fund, a trust agreement shall be executed with that institution that will act as a trustee. (Amended by Stats. 1993, Ch. 225, Sec. 2. Effective January 1, 1994.)
  147. 11521.2.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 12. Grants and Annuities Societies [11520 - 11524] ( Chapter 12 enacted by Stats. 1935, Ch. 145. )

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    Annuity reserves must be invested in the investments listed by law, with limited exceptions for certain securities and investment companies, and other investments require the commissioner’s written consent.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 12. Grants and Annuities Societies [11520 - 11524] ( Chapter 12 enacted by Stats. 1935, Ch. 145. ) ## 11521.2. (a) The reserve required by the table of commensurate values for each annuity contract issued must be invested in investments specified in Sections 1170 through 1182 except that a certificate holder may invest in investment companies registered under the federal Investment Company Act of 1940, and in securities, including interests in those investment companies, listed and traded on the New York Stock Exchange, the American Stock Exchange or regional stock exchanges or the National Market System of the Nasdaq Stock Market or successors to such exchanges or market having the same qualifications, to the extent of the lesser of net worth (assets over liabilities and reserves) of the certificate holder or 50 percent of these general investments. This section does not permit investment in options or commodity exchanges. (b) The certificate holder may invest in other investments as permitted by and subject to the written consent of the commissioner. (Amended by Stats. 2005, Ch. 253, Sec. 2. Effective September 22, 2005.)
  148. 11521.3.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 12. Grants and Annuities Societies [11520 - 11524] ( Chapter 12 enacted by Stats. 1935, Ch. 145. )

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    Applicants and certificate holders must file accurate and complete financial statements with the commissioner, with one filing required before admission and another due 120 days after fiscal year-end for most certificate holders.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 12. Grants and Annuities Societies [11520 - 11524] ( Chapter 12 enacted by Stats. 1935, Ch. 145. ) ## 11521.3. (a) Prior to admission each applicant shall file with the commissioner an accurate and complete financial statement consisting of a balance sheet and income and expense statement, showing the current condition of the applicant and sworn to by the officer of the applicant having the responsibility for preparing the statement. (b) If the applicant is already transacting a grants and annuities business in another state, an accurate and complete financial statement showing the condition of the present grants and annuities business, sworn to by the officer having the responsibility for preparing the statement, shall be submitted. (c) One hundred and twenty days after the end of their fiscal year, every certificate holder, except a certificate holder that also holds a certificate of authority pursuant to Article 3 (commencing with Section 699) of Chapter 1 of Part 2 of Division 1, shall make and file with the commissioner an accurate and complete financial statement, consisting of a balance sheet and income and expense statement, showing the current condition of the certificate holder’s grants and annuities operation on a form prescribed by the commissioner. (Amended by Stats. 2005, Ch. 173, Sec. 1. Effective January 1, 2006.)
  149. 11521.4.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 12. Grants and Annuities Societies [11520 - 11524] ( Chapter 12 enacted by Stats. 1935, Ch. 145. )

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    The commissioner may, after a hearing, order disposal of investments made in violation of this chapter.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 12. Grants and Annuities Societies [11520 - 11524] ( Chapter 12 enacted by Stats. 1935, Ch. 145. ) ## 11521.4. The commissioner may, in his discretion and after hearing, require the disposal of any investment made in violation of the provisions of this chapter; pending disposal pursuant to such order, no value shall be allowed for such investment in any financial statement or report required to be filed with the commissioner and purporting to show the financial condition of the owner thereof for the purpose of determining whether such owner is solvent or insolvent. (Added by Stats. 1978, Ch. 795.)
  150. 11521.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 12. Grants and Annuities Societies [11520 - 11524] ( Chapter 12 enacted by Stats. 1935, Ch. 145. )

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    The commissioner may adopt reasonable rules and regulations to carry out this chapter, and may also amend or repeal those rules and regulations.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 12. Grants and Annuities Societies [11520 - 11524] ( Chapter 12 enacted by Stats. 1935, Ch. 145. ) ## 11521.5. The commissioner may adopt reasonable rules and regulations as may be necessary to carry out the provisions of this chapter pursuant to the provisions of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. Pursuant to these provisions, the commissioner may also amend or repeal the rules and regulations. (Amended by Stats. 1982, Ch. 454, Sec. 119.)
  151. 11521.6.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 12. Grants and Annuities Societies [11520 - 11524] ( Chapter 12 enacted by Stats. 1935, Ch. 145. )

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    Some grants and annuities certificate holders are exempt from specified sections, but holders covered by this section must clearly and conspicuously display the required disclosure in all agreements issued under the chapter.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 12. Grants and Annuities Societies [11520 - 11524] ( Chapter 12 enacted by Stats. 1935, Ch. 145. ) ## 11521.6. Nothing contained in Section 11521, 11521.1, 11521.2, 11521.4, 11523.6, or paragraph (6) of subdivision (a) of Section 11523 shall apply to any grants and annuities certificate holder that also holds a certificate of authority pursuant to Article 3 (commencing with Section 699) of Chapter 1 of Part 2 of Division 1. A grants and annuities certificate holder subject to this section shall display clearly and conspicuously, and in the type specified, the disclosure required by paragraph (7) of subdivision (a) of Section 11523 in all agreements issued under this chapter. (Amended by Stats. 2006, Ch. 740, Sec. 11. Effective January 1, 2007.)
  152. 11522.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 12. Grants and Annuities Societies [11520 - 11524] ( Chapter 12 enacted by Stats. 1935, Ch. 145. )

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    Organizations or persons with a certificate of authority to receive transfers must file agreement information with the commissioner and pay filing fees.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 12. Grants and Annuities Societies [11520 - 11524] ( Chapter 12 enacted by Stats. 1935, Ch. 145. ) ## 11522. Every organization or person holding a certificate of authority to receive transfers under this chapter shall make and file with the commissioner information regarding each agreement entered into between the permit or certificate holder and the transferor. The information requested by the commissioner shall be provided in the number, form, and format, at the intervals, and by the methods prescribed by the commissioner. The organization or person shall pay a basic fee to the commissioner for the filing of the requested information. The basic fee as provided in this section shall be established by rules and regulations adopted by the commissioner pursuant to Section 11521.5 for information filed by the organization or person where information is filed regarding up to 10 agreements within any calendar quarter. Thereafter, within each calendar quarter, the fee for information filed regarding each agreement shall be as follows: 50 percent of the basic fee for information filed regarding 11 to 20 agreements filed; 20 percent of the basic fee for information filed regarding 21 to 30 agreements filed; 10 percent of the basic fee for information filed regarding 31 to 40 agreements filed; and 5 percent of the basic filing fee for information filed regarding 41 or more agreements. The fees as provided herein shall be paid with the filing of the information regarding the agreements by the organization or person. (Amended by Stats. 2005, Ch. 253, Sec. 3. Effective September 22, 2005. Operative January 1, 2006, by Sec. 5 of Ch. 253.)
  153. 11523.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 12. Grants and Annuities Societies [11520 - 11524] ( Chapter 12 enacted by Stats. 1935, Ch. 145. )

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    An annuity agreement must list specified details, and certificate holders must certify annually to the commissioner that covered agreements include all required information.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 12. Grants and Annuities Societies [11520 - 11524] ( Chapter 12 enacted by Stats. 1935, Ch. 145. ) ## 11523. (a) The annuity agreement shall show each of the following: (1) The value of the property transferred. (2) The amount of annuity agreed to be paid to the transferor or his nominee. (3) The manner in which, and the intervals at which, the annuity is to be paid. (4) The age, in years, at or nearest the date of the agreement, of the person during whose life the annuity is to be paid. (5) The effective date of the agreement. (6) The signature of each donor. (7) The following clause, in at least 12-point boldface type, located on the same page as and in the immediate proximity of the donor signature line: “Annuities are subject to regulation by the State of California. Payments under this agreement, however, are not protected or otherwise guaranteed by any government agency or the California Life and Health Insurance Guarantee Association. (b) Every organization or person holding a certificate of authority to receive transfers under this chapter shall annually certify to the commissioner that all agreements entered into during the time period covered by the certification show all of the information set forth in subdivision (a). The certification shall be in the number, form, and format, by the method, and at the time prescribed by the commissioner. The commissioner may from time to time as he or she deems necessary require that a copy of each agreement be submitted to the department. (Amended by Stats. 2005, Ch. 253, Sec. 4. Effective September 22, 2005. Operative January 1, 2006, by Sec. 5 of Ch. 253.)
  154. 11523.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 12. Grants and Annuities Societies [11520 - 11524] ( Chapter 12 enacted by Stats. 1935, Ch. 145. )

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    A certificate holder may reinsure all liability on an annuity agreement with an admitted insurer for a single premium, and may count that reinsurance toward reserve fund requirements if it follows the stated conditions.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 12. Grants and Annuities Societies [11520 - 11524] ( Chapter 12 enacted by Stats. 1935, Ch. 145. ) ## 11523.5. Any person holding a certificate of authority under this chapter may reinsure its total liability under an annuity agreement (as defined in Section 11523) with an admitted insurer for a single premium. In such event, such certificate holder may take credit for such reinsurance in reduction of the amount of the reserve fund it is required to maintain under the provisions of Section 11521, subject to the following conditions: (a) Such certificate holder shall file with the commissioner a copy of the reinsurance contract specifying which annuity agreement previously filed pursuant to Section 11522 is thereby reinsured. (b) Such certificate holder shall enter into a written agreement with the annuitant and the reinsurer agreeing that if it should for any reason be unable to continue the making of the annuity payments required by its annuity agreement, the annuitant shall receive payments directly from the reinsurer and that such reinsurer shall be credited with all such direct payments in the accounts between it and such reinsurer. (c) Any commission granted by the reinsurer on the reinsurance shall be payable only to the certificate holder which shall pay no commission directly or on account of such reinsurance. (Added by Stats. 1969, Ch. 516.)
  155. 11523.6.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 12. Grants and Annuities Societies [11520 - 11524] ( Chapter 12 enacted by Stats. 1935, Ch. 145. )

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    A grants and annuities society covered by this chapter may not transact, or be authorized to transact, variable annuity business in this state.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 12. Grants and Annuities Societies [11520 - 11524] ( Chapter 12 enacted by Stats. 1935, Ch. 145. ) ## 11523.6. No grants and annuities society applying for admission to this state, or transacting in this state, the business described in this chapter shall transact or be authorized to transact a variable annuity business as described in Section 10506. (Added by Stats. 1980, Ch. 200, Sec. 1.)
  156. 11524.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 12. Grants and Annuities Societies [11520 - 11524] ( Chapter 12 enacted by Stats. 1935, Ch. 145. )

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    This section generally exempts the organization or person from other insurance laws, except for the listed sections and chapter-specific rules.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 12. Grants and Annuities Societies [11520 - 11524] ( Chapter 12 enacted by Stats. 1935, Ch. 145. ) ## 11524. Except as prescribed in this chapter, such organization or person shall be otherwise exempt from the provisions of this code and other insurance laws of this state, except the provisions of Sections 730 to 736, inclusive, Sections 790 to 790.10, inclusive, Section 1011, Sections 1012 to 1044, and Sections 1056.5 to 1061. The cost and expense of examining such organization or person shall be paid as prescribed in Section 736. (Amended by Stats. 1980, Ch. 209, Sec. 6.)
  157. 11525.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 13. Voluntary Mutualization of Incorporated Life and Life and Disability Insurers Having a Capital Stock and Issuing Nonassessable Policies on a Reserve Basis [11525 - 11533] ( Chapter 13 added by Stats. 1935, Ch. 530. ) ## ARTICLE 1. Authority and Requirements to Mutualize [11525 - 11528] ( Article 1 added by Stats. 1935, Ch. 530. )

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    A qualifying domestic life or life-and-disability insurer may convert itself into a mutual insurer and may use a plan to acquire its outstanding shares for the benefit of policyholders.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 13. Voluntary Mutualization of Incorporated Life and Life and Disability Insurers Having a Capital Stock and Issuing Nonassessable Policies on a Reserve Basis [11525 - 11533] ( Chapter 13 added by Stats. 1935, Ch. 530. ) ## ARTICLE 1. Authority and Requirements to Mutualize [11525 - 11528] ( Article 1 added by Stats. 1935, Ch. 530. ) ## 11525. A solvent domestic incorporated insurer having a paid-in capital represented by outstanding shares of capital stock and issuing, on a reserve basis, nonassessable policies of life insurance or of both life and disability insurance, may convert itself into an incorporated mutual life insurer, or life and disability insurer, issuing nonassessable policies on a reserve basis. To that end it may provide and carry out a plan for the acquisition of the outstanding shares of its capital stock for the benefit of its policyholders, or any class or classes of its policyholders, by complying with the requirements of this chapter. (Amended by Stats. 1937, Ch. 735.)
  158. 11526.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 13. Voluntary Mutualization of Incorporated Life and Life and Disability Insurers Having a Capital Stock and Issuing Nonassessable Policies on a Reserve Basis [11525 - 11533] ( Chapter 13 added by Stats. 1935, Ch. 530. ) ## ARTICLE 1. Authority and Requirements to Mutualize [11525 - 11528] ( Article 1 added by Stats. 1935, Ch. 530. )

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    A mutualization plan must be approved by directors, shareholders, the Insurance Commissioner, and the relevant policyholders, and then filed with the commissioner.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 13. Voluntary Mutualization of Incorporated Life and Life and Disability Insurers Having a Capital Stock and Issuing Nonassessable Policies on a Reserve Basis [11525 - 11533] ( Chapter 13 added by Stats. 1935, Ch. 530. ) ## ARTICLE 1. Authority and Requirements to Mutualize [11525 - 11528] ( Article 1 added by Stats. 1935, Ch. 530. ) ## 11526. Such plan shall include appropriate proceedings for amending the insurer’s articles of incorporation to give effect to the acquisition, by said insurer, for the benefit of its policyholders or any class or classes thereof, of the outstanding shares of its capital stock and the conversion of the insurer from a stock corporation into a nonstock corporation for the benefit of its members. The members of such nonstock corporation shall be the policyholders from time to time of the class or classes for whose benefit the stock of the insurer was acquired, and the policyholders of such other class or classes as may be specified in such corporation’s articles of incorporation as they may be amended from time to time. Such plan shall be: (a) Adopted by a vote of a majority of the directors. (b) Approved by the vote of the holders of at least a majority of the outstanding shares at a special meeting of shareholders called for that purpose, or by the written consent of such shareholders. (c) Submitted to the commissioner and approved by him in writing. (d) Approved by a majority vote of all the policyholders of the class or classes for whose benefit the stock is to be acquired voting at an election by the policyholders called for that purpose, subject to the provisions of Section 11528. The terms “policyholder” and “policyholders” as used in this chapter shall be deemed to mean the person or persons insured under an individual policy of life insurance, or of disability insurance, or of any combination of life and disability insurance. They shall also include the person or persons to whom any annuity or pure endowment is presently or prospectively payable by the terms of an individual annuity or pure endowment contract, except where the policy or contract declares some other person to be the owner or holder thereof, in which case such other person shall be deemed the policyholder. In any case where such policy or contract names two or more persons as joint insureds, payees, owners or holders thereof, the persons so named shall be deemed collectively to be but one policyholder for the purpose of this chapter. In any case where a policy or contract shall have been assigned by assignment absolute on its face to an assignee other than the insurer, and such assignment shall have been filed at the principal office of the insurer at least 30 days prior to the date of any election or meeting referred to in this chapter, then such assignee shall be deemed at such election or meeting to be the policyholder. For the purpose of this chapter the terms “policyholder” and “policyholders” include the employer to whom, or a president, secretary or other executive officer of any corporation or association to which a master group policy has been issued, but exclude the holders of certificates or policies issued under or in connection with a master group policy. Beneficiaries under unmatured contracts shall not as such be deemed to be policyholders. (e) Filed in the office of the Insurance Commissioner after having been approved as provided in subdivisions (b), (c) and (d) of this section. (Amended by Stats. 1969, Ch. 49.)
  159. 11527.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 13. Voluntary Mutualization of Incorporated Life and Life and Disability Insurers Having a Capital Stock and Issuing Nonassessable Policies on a Reserve Basis [11525 - 11533] ( Chapter 13 added by Stats. 1935, Ch. 530. ) ## ARTICLE 1. Authority and Requirements to Mutualize [11525 - 11528] ( Article 1 added by Stats. 1935, Ch. 530. )

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    The commissioner must examine the submitted plan and may not approve it unless the protected interests and fairness conditions are satisfied.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 13. Voluntary Mutualization of Incorporated Life and Life and Disability Insurers Having a Capital Stock and Issuing Nonassessable Policies on a Reserve Basis [11525 - 11533] ( Chapter 13 added by Stats. 1935, Ch. 530. ) ## ARTICLE 1. Authority and Requirements to Mutualize [11525 - 11528] ( Article 1 added by Stats. 1935, Ch. 530. ) ## 11527. The commissioner shall examine the plan submitted under subdivision (c) of Section 11526. The commissioner shall not approve the plan unless in the commissioner’s opinion the rights and interests of the insurer, its policyholders, and shareholders are protected and the commissioner is satisfied that the plan will be fair and equitable in its operation. (Amended by Stats. 1983, Ch. 142, Sec. 93.)
  160. 11528.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 13. Voluntary Mutualization of Incorporated Life and Life and Disability Insurers Having a Capital Stock and Issuing Nonassessable Policies on a Reserve Basis [11525 - 11533] ( Chapter 13 added by Stats. 1935, Ch. 530. ) ## ARTICLE 1. Authority and Requirements to Mutualize [11525 - 11528] ( Article 1 added by Stats. 1935, Ch. 530. )

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    This section sets the procedure for calling, noticing, and conducting the election, and assigns voting, inspector, quorum, and expense rules.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 13. Voluntary Mutualization of Incorporated Life and Life and Disability Insurers Having a Capital Stock and Issuing Nonassessable Policies on a Reserve Basis [11525 - 11533] ( Chapter 13 added by Stats. 1935, Ch. 530. ) ## ARTICLE 1. Authority and Requirements to Mutualize [11525 - 11528] ( Article 1 added by Stats. 1935, Ch. 530. ) ## 11528. The election prescribed by subdivision (d) of Section 11526, shall be called by the board of directors or the president and every policyholder of the class or classes for whose benefit the stock is to be acquired, whose insurance shall have been in force for at least one year prior to the election shall have one vote, regardless of the number of policies or amount of insurance the policyholder holds, and regardless of whether the policies are policies of life insurance or policies of disability insurance. Notice of the election shall be given to policyholders entitled to vote by mail from the principal office of the insurer at least 30 days prior to the date set for the election, in a sealed envelope, postage prepaid, addressed to the policyholder at that person’s last known address. Voting shall be by one of the following methods: (a) At a meeting of those policyholders, held pursuant to the notice, by ballot in person or by proxy. (b) If not by the method described in subdivision (a), then by mail pursuant to a procedure and on forms to be prescribed by the plan. The election shall be conducted under the direction and supervision of three impartial and disinterested inspectors appointed by the insurer and approved by the commissioner. In case any person appointed as inspector fails to appear at the meeting or fails or refuses to act at the election, the vacancy, if occurring in advance of the convening of the meeting or in advance of the opening of the mail vote, may be filled in the manner prescribed for the appointment of inspectors and, if occurring at the meeting or during the canvass of the mail vote, may be filled by the person acting as chairperson of the meeting or designated for that purpose in the plan. The decision, act, or certificate of a majority of the inspectors shall be effective in all respects as the decision, act, or certificate of all. The inspectors of election shall determine the number of policyholders, the voting power of each, the policyholders represented at the meeting or voting by mail, the existence of a quorum, and the authenticity, validity, and effect of proxies. They shall receive votes, hear and determine all challenges and questions in any way arising in connection with the right to vote, count and tabulate all votes, determine the result, and do such other acts as are proper to conduct the vote with fairness to all policyholders. The inspectors of election shall, before commencing performance of their duties, subscribe to and file with the insurer and with the commissioner an oath that they, and each of them, will perform their duties impartially, in good faith, to the best of their ability and as expeditiously as is practicable. On the request of the insurer, the commissioner, a policyholder or his or her proxy, the inspectors shall make a report in writing of any challenge or question or matter determined by them and execute a certificate of any fact found by them. They shall also certify the result of the vote to the insurer and to the commissioner. Any report or certificate made by them shall be prima facie evidence of facts stated therein. All necessary expenses incurred in connection with the election shall be paid by the insurer. For the purpose of this section, a quorum shall consist of 5 percent of the policyholders of the insurer entitled to vote at the election. (Amended by Stats. 1983, Ch. 142, Sec. 94.)
  161. 11529.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 13. Voluntary Mutualization of Incorporated Life and Life and Disability Insurers Having a Capital Stock and Issuing Nonassessable Policies on a Reserve Basis [11525 - 11533] ( Chapter 13 added by Stats. 1935, Ch. 530. ) ## ARTICLE 2. Execution of Plan [11529 - 11533] ( Article 2 added by Stats. 1935, Ch. 530. )

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    An insurer carrying out a mutualization plan may buy its own shares, but those shares must generally be held in trust for policyholders and managed by approved trustees until the stock is fully acquired or the trust ends.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 13. Voluntary Mutualization of Incorporated Life and Life and Disability Insurers Having a Capital Stock and Issuing Nonassessable Policies on a Reserve Basis [11525 - 11533] ( Chapter 13 added by Stats. 1935, Ch. 530. ) ## ARTICLE 2. Execution of Plan [11529 - 11533] ( Article 2 added by Stats. 1935, Ch. 530. ) ## 11529. In carrying out any such plan, the insurer may acquire any shares of its own stock by gift, bequest or purchase. Any shares so acquired shall, unless as a result of such acquisition all of the shares of the insurer shall have been acquired, be acquired in trust for the policyholders of the class or classes for whose benefit the plan provides that the stock of the insurer shall be acquired as hereinafter provided. Such shares shall be assigned and transferred on the books of such insurer to three or more trustees appointed by the insurer and approved by the commissioner under a trust agreement approved by the commissioner. Such trustees shall hold such stock in trust until all of the outstanding shares of capital stock of such insurer have been acquired, but for not longer than 30 years with such extensions of not more than five years each as may be granted by the commissioner. Such extensions may be granted by the commissioner if the plan so provides and if in his opinion the plan of acquisition of all of such stock can be completed within a reasonable period. Such trustees shall vote such stock at all corporate meetings at which stockholders have the right to vote. When all of the outstanding shares of capital stock of such insurer have been acquired, all said shares shall be canceled, the certificate of amendment of the insurer’s articles of incorporation giving effect thereto shall be filed in accordance with the provisions of Chapter 9 (commencing with Section 1300) of Division 1 of Title 1, of the Corporations Code, and the insurer shall become a nonstock corporation for the profit of its members and such trust shall thereupon terminate. Thereafter such corporation shall be conducted for the mutual benefit, ratably, of its policyholders of the class or classes for whose benefit the stock was acquired and shall have power to issue nonassessable policies on a reserve basis subject to all provisions of law applicable to incorporated life insurers or life and disability insurers, as the case may be, issuing nonassessable policies on a reserve basis. Policies so issued may be upon the basis of full or partial participation therein as agreed between the insurer and the insured. Upon the termination of any such voting trusts, either in accordance with its terms or as hereinabove provided, such plan of mutualization shall terminate, unless theretofore completed. Upon such termination, unless the plan of mutualization provides for the disposition of the shares acquired by the insurer under such plan or for the disposition of the proceeds thereof, the shares held by such trustees shall be disposed of in accordance with an order of the superior court of the county in which is located the principal office of such insurer, made upon a verified application of the commissioner. (Amended by Stats. 1978, Ch. 349.)
  162. 11529.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 13. Voluntary Mutualization of Incorporated Life and Life and Disability Insurers Having a Capital Stock and Issuing Nonassessable Policies on a Reserve Basis [11525 - 11533] ( Chapter 13 added by Stats. 1935, Ch. 530. ) ## ARTICLE 2. Execution of Plan [11529 - 11533] ( Article 2 added by Stats. 1935, Ch. 530. )

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    A mutualization plan may create a voting trust, but the trust agreement and trustees need the commissioner’s approval.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 13. Voluntary Mutualization of Incorporated Life and Life and Disability Insurers Having a Capital Stock and Issuing Nonassessable Policies on a Reserve Basis [11525 - 11533] ( Chapter 13 added by Stats. 1935, Ch. 530. ) ## ARTICLE 2. Execution of Plan [11529 - 11533] ( Article 2 added by Stats. 1935, Ch. 530. ) ## 11529.5. Any such plan of mutualization may provide for the creation of a voting trust under a trust agreement for the holding and voting by three or more trustees of any portion or all of the shares of the insurer not acquired upon the adoption of such plan. The voting trustees shall be named in accordance with such plan or, if no provision is made therein for the naming of such trustees, then by the insurer. The voting trust agreement and voting trustees shall be subject to the approval of the commissioner. Any or all of the trustees under such voting trust agreement may be the same person or persons as any or all of the trustees referred to in Section 11529. Such voting trust agreement shall provide that in the event of acquisition by the insurer of any of the shares of stock held thereunder in accordance with the provisions of the plan, such shares so acquired together with the voting rights thereof shall be transferred by the trustees named under the provisions of this section to the trustees named under the provisions of Section 11529. Any voting trust agreement created pursuant to the provisions of this section may be made irrevocable for not longer than thirty (30) years and thereafter until the termination of the trust provided for in Section 11529. The trust created pursuant to the provisions of this section shall terminate in any event upon termination of the trust provided for in Section 11529. Upon the termination of the trust created pursuant to the provision of this section, any shares held in such trust shall revert to the persons entitled thereto by law. (Added by Stats. 1947, Ch. 223.)
  163. 1153.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Incorporated Insurers [1140 - 1260] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Restrictions on Activities [1152 - 1155] ( Article 2 enacted by Stats. 1935, Ch. 145. )

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    An insurer cannot be admitted during the first three years after it starts business or is first incorporated unless it keeps enough qualifying assets.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Incorporated Insurers [1140 - 1260] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Restrictions on Activities [1152 - 1155] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 1153. An insurer shall not be admitted within three years from and after the time when it commences business as an insurer, nor within three years from and after the time when it is first incorporated, unless assets equal to the sum of its liabilities and the minimum capital and surplus required for admission are maintained in cash or one or more of the following: (a) Securities specified in Sections 1170 to 1175, inclusive. (b) Premiums that are in the course of collection, or agents’ balances representing premiums, on policies effected not more than 90 days prior to the date on which these premiums or balances are valued for the purpose of this section, and earned service fees receivable, not over 90 days due, and evidences of debt representing those assets. (c) In the case of a life insurer, the amount of current deferred premiums receivable, after deducting therefrom the amount of the loading. (d) Interest accrued and dividends declared, receivable on any of the assets specified in subdivisions (a) to (c), inclusive, no part of which interest or dividends has been due in excess of one year. (e) Amount of reinsurance recoverable from admitted insurers. (f) With the prior approval of the commissioner, any investments authorized by this code if the following conditions are met: (1) The insurer has previously been authorized to write life or health insurance, or is seeking authority to write life or health insurance. (2) The solvency of the insurer is guaranteed by another insurer (the “guaranteeing insurer”) that meets the following criteria: (A) The guaranteeing insurer has an ownership interest of at least 50 percent in the insurer. (B) The guaranteeing insurer, which may be a reciprocal or interinsurance exchange, has been admitted to do business in this state for not less than 10 years. (C) The guaranteeing insurer has maintained a surplus of admitted assets over all liabilities of at least five hundred million dollars ($500,000,000) for not less than three years. (3) The commissioner, in his or her discretion, determines that the proposed investment is sound in relation to the insurer’s business plan and operations. (Amended by Stats. 1998, Ch. 495, Sec. 1. Effective January 1, 1999.)
  164. 1153.5.

    ## 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 2. Incorporated Insurers [1140 - 1260] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Restrictions on Activities [1152 - 1155] ( Article 2 enacted by Stats. 1935, Ch. 145. )

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    A newly admitted insurer that has been in business for less than three years must keep its assets in the asset types listed in Section 1153, except for assets above liabilities plus required surplus and capital; if it fails, the commissioner may revoke its certificate of authority.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Incorporated Insurers [1140 - 1260] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Restrictions on Activities [1152 - 1155] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 1153.5. An admitted insurer which has been in business as an insurer less than three years from and after the time when it commenced business as an insurer shall maintain its assets during the balance of such three-year period in the types of assets specified in Section 1153, excepting such of its assets as are in excess of the sum of its liabilities and the surplus and capital requirements for admission. On its failure so to do, the commissioner may revoke its certificate of authority. The proceedings shall be conducted in accordance with Chapter 5 of Part 1 of Division 3 of Title 2 of the Government Code, and the commissioner shall have all the powers granted therein. (Amended by Stats. 1951, Ch. 543.)
  165. 11530.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 13. Voluntary Mutualization of Incorporated Life and Life and Disability Insurers Having a Capital Stock and Issuing Nonassessable Policies on a Reserve Basis [11525 - 11533] ( Chapter 13 added by Stats. 1935, Ch. 530. ) ## ARTICLE 2. Execution of Plan [11529 - 11533] ( Article 2 added by Stats. 1935, Ch. 530. )

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    Payments to buy certain insurer shares need prior approval from the commissioner.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 13. Voluntary Mutualization of Incorporated Life and Life and Disability Insurers Having a Capital Stock and Issuing Nonassessable Policies on a Reserve Basis [11525 - 11533] ( Chapter 13 added by Stats. 1935, Ch. 530. ) ## ARTICLE 2. Execution of Plan [11529 - 11533] ( Article 2 added by Stats. 1935, Ch. 530. ) ## 11530. Every payment for the acquisition of any shares of the capital stock of such insurer, the purchase price of which is not fixed by such plan, shall be subject to the prior approval of the commissioner. Neither such plan, nor any such payment, may be approved by the commissioner unless he finds that the rights and interests of the insurer, its policyholders, and shareholders are protected. (Amended by Stats. 1947, Ch. 223.)
  166. 11531.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 13. Voluntary Mutualization of Incorporated Life and Life and Disability Insurers Having a Capital Stock and Issuing Nonassessable Policies on a Reserve Basis [11525 - 11533] ( Chapter 13 added by Stats. 1935, Ch. 530. ) ## ARTICLE 2. Execution of Plan [11529 - 11533] ( Article 2 added by Stats. 1935, Ch. 530. )

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    Trustees must file a verified acceptance and declarations with the insurer and the commissioner, and must promptly repay dividends and other sums to the insurer after expenses.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 13. Voluntary Mutualization of Incorporated Life and Life and Disability Insurers Having a Capital Stock and Issuing Nonassessable Policies on a Reserve Basis [11525 - 11533] ( Chapter 13 added by Stats. 1935, Ch. 530. ) ## ARTICLE 2. Execution of Plan [11529 - 11533] ( Article 2 added by Stats. 1935, Ch. 530. ) ## 11531. The trustees referred to in section 11529 shall file with such insurer and with the commissioner a verified acceptance of their appointments and verified declarations that they will faithfully discharge their duties as such trustees. All dividends and other sums received by said trustees on the shares held by them, after paying the necessary expenses of executing their trust, shall be immediately repaid to such insurer for the benefit of all who are, or may become, policyholders of such insurer of the class or classes for whose benefit the stock of such insurer was acquired and entitled to participate in the profits thereof and shall be added to and become a part of the assets of such insurer. (Amended by Stats. 1937, Ch. 735.)
  167. 11532.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 13. Voluntary Mutualization of Incorporated Life and Life and Disability Insurers Having a Capital Stock and Issuing Nonassessable Policies on a Reserve Basis [11525 - 11533] ( Chapter 13 added by Stats. 1935, Ch. 530. ) ## ARTICLE 2. Execution of Plan [11529 - 11533] ( Article 2 added by Stats. 1935, Ch. 530. )

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    After mutualization, the insurer continues as the same insurer and keeps its authority, suits, rights, and contracts intact except as the approved plan provides. The insurer must continue exercising its legal rights and duties, and the board may amend bylaws before mutualization so the changes take effect then.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 13. Voluntary Mutualization of Incorporated Life and Life and Disability Insurers Having a Capital Stock and Issuing Nonassessable Policies on a Reserve Basis [11525 - 11533] ( Chapter 13 added by Stats. 1935, Ch. 530. ) ## ARTICLE 2. Execution of Plan [11529 - 11533] ( Article 2 added by Stats. 1935, Ch. 530. ) ## 11532. Such insurer, after mutualization, shall be a continuation of the original insurer, and such mutualization shall not affect such insurer’s certificate of authority nor existing suits, rights or contracts except as provided in said plan for the acquisition of the outstanding shares of the capital stock of such insurer, approved as provided in this chapter. Such insurer, after mutualization, shall exercise all the rights and powers and perform all the duties conferred or imposed by law upon insurers writing the classes of insurance written by it, and to protect rights and contracts existing prior to mutualization, subject to the effect of said plan. The board of directors of such insurer, prior to mutualization, may adopt amendments to its bylaws to take effect upon mutualization. (Amended by Stats. 1959, Ch. 1105.)
  168. 11532.1.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 13. Voluntary Mutualization of Incorporated Life and Life and Disability Insurers Having a Capital Stock and Issuing Nonassessable Policies on a Reserve Basis [11525 - 11533] ( Chapter 13 added by Stats. 1935, Ch. 530. ) ## ARTICLE 2. Execution of Plan [11529 - 11533] ( Article 2 added by Stats. 1935, Ch. 530. )

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    Members must hold an annual meeting each year on the fourth Tuesday of March at 10:00 a.m. at the insurer’s principal office, unless the bylaws set a different time or place.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 13. Voluntary Mutualization of Incorporated Life and Life and Disability Insurers Having a Capital Stock and Issuing Nonassessable Policies on a Reserve Basis [11525 - 11533] ( Chapter 13 added by Stats. 1935, Ch. 530. ) ## ARTICLE 2. Execution of Plan [11529 - 11533] ( Article 2 added by Stats. 1935, Ch. 530. ) ## 11532.1. An annual meeting of members shall be held at 10 o'clock in the morning of the fourth Tuesday of March of each year at the principal office of the insurer, unless a different time or place be provided in the by-laws. (Added by Stats. 1941, Ch. 379.)
  169. 11532.2.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 13. Voluntary Mutualization of Incorporated Life and Life and Disability Insurers Having a Capital Stock and Issuing Nonassessable Policies on a Reserve Basis [11525 - 11533] ( Chapter 13 added by Stats. 1935, Ch. 530. ) ## ARTICLE 2. Execution of Plan [11529 - 11533] ( Article 2 added by Stats. 1935, Ch. 530. )

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    Special meetings of members may be called by the president, the board of directors, qualifying members with at least one-fifth of the voting power, or other officers/persons authorized by the bylaws.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 13. Voluntary Mutualization of Incorporated Life and Life and Disability Insurers Having a Capital Stock and Issuing Nonassessable Policies on a Reserve Basis [11525 - 11533] ( Chapter 13 added by Stats. 1935, Ch. 530. ) ## ARTICLE 2. Execution of Plan [11529 - 11533] ( Article 2 added by Stats. 1935, Ch. 530. ) ## 11532.2. Special meetings of the members, for any purpose or purposes whatsoever, may be called at any time by the president, or by the board of directors, or by one or more members holding not less than one-fifth of the voting power of such insurer, or by such other officers or persons as the by-laws authorize. (Added by Stats. 1941, Ch. 379.)
  170. 11532.3.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 13. Voluntary Mutualization of Incorporated Life and Life and Disability Insurers Having a Capital Stock and Issuing Nonassessable Policies on a Reserve Basis [11525 - 11533] ( Chapter 13 added by Stats. 1935, Ch. 530. ) ## ARTICLE 2. Execution of Plan [11529 - 11533] ( Article 2 added by Stats. 1935, Ch. 530. )

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    The insurer must give written notice of members’ meetings, including the time, place, day, and business to be handled, with at least 7 days’ notice unless the bylaws say otherwise.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 13. Voluntary Mutualization of Incorporated Life and Life and Disability Insurers Having a Capital Stock and Issuing Nonassessable Policies on a Reserve Basis [11525 - 11533] ( Chapter 13 added by Stats. 1935, Ch. 530. ) ## ARTICLE 2. Execution of Plan [11529 - 11533] ( Article 2 added by Stats. 1935, Ch. 530. ) ## 11532.3. Notice of all meetings of members whether annual or special shall be given in writing to the members entitled to vote by the secretary, or an assistant secretary, or other person charged with that duty, or if there be no such officer, or in case of his neglect or refusal, by any director or member. At the option of the insurer such notice may be imprinted on premium notices or receipts or on both. A notice may be given by such insurer to any member either personally, or by mail, or other means of written communication, charges prepaid, addressed to such member at his address appearing on the books of the insurer, or given by him to the insurer for the purpose of notice. If a member gives no address, notice shall be deemed to have been given him if sent by mail or other means of written communication addressed to the place where the principal office of the insurer is situated, or if published at least once in some newspaper of general circulation in the county in which said office is located. Notice of any meeting of members shall be sent to each member entitled thereto not less than seven days before such meeting, unless the bylaws provide otherwise. Notice of any meeting of members shall specify the place, the day, and the hour of the meeting and the general nature of the business to be transacted. Notice of an annual meeting to be held at the time and place specified in Section 11532.1 shall be sufficiently given if published at least once in each of four successive weeks in a newspaper of general circulation in the county in which the principal office of such insurer is located, and if so published no other notice of such meeting shall be required. (Amended by Stats. 1959, Ch. 1105.)
  171. 11532.4.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 13. Voluntary Mutualization of Incorporated Life and Life and Disability Insurers Having a Capital Stock and Issuing Nonassessable Policies on a Reserve Basis [11525 - 11533] ( Chapter 13 added by Stats. 1935, Ch. 530. ) ## ARTICLE 2. Execution of Plan [11529 - 11533] ( Article 2 added by Stats. 1935, Ch. 530. )

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    A meeting has a quorum if 5% of voting members are present in person or by proxy, unless the by-laws say otherwise.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 13. Voluntary Mutualization of Incorporated Life and Life and Disability Insurers Having a Capital Stock and Issuing Nonassessable Policies on a Reserve Basis [11525 - 11533] ( Chapter 13 added by Stats. 1935, Ch. 530. ) ## ARTICLE 2. Execution of Plan [11529 - 11533] ( Article 2 added by Stats. 1935, Ch. 530. ) ## 11532.4. The presence in person or by proxy of 5 per cent of the members entitled to vote at any meeting shall constitute a quorum for the transaction of business, unless otherwise provided in the by-laws. (Added by Stats. 1941, Ch. 379.)
  172. 11532.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 13. Voluntary Mutualization of Incorporated Life and Life and Disability Insurers Having a Capital Stock and Issuing Nonassessable Policies on a Reserve Basis [11525 - 11533] ( Chapter 13 added by Stats. 1935, Ch. 530. ) ## ARTICLE 2. Execution of Plan [11529 - 11533] ( Article 2 added by Stats. 1935, Ch. 530. )

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    Each member gets one vote at member meetings, and a voting member may vote personally or by a properly executed and filed written proxy.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 13. Voluntary Mutualization of Incorporated Life and Life and Disability Insurers Having a Capital Stock and Issuing Nonassessable Policies on a Reserve Basis [11525 - 11533] ( Chapter 13 added by Stats. 1935, Ch. 530. ) ## ARTICLE 2. Execution of Plan [11529 - 11533] ( Article 2 added by Stats. 1935, Ch. 530. ) ## 11532.5. Each such member shall have one vote at any meeting of members regardless of the number of policies or the amount of insurance that such member holds and regardless of whether such policies are policies of life insurance, or of disability insurance, or both. Any member entitled to vote shall have the right to do so either in person or by an agent or agents authorized by a written proxy executed by such person or his duly authorized agent and filed with the secretary of such insurer. (Added by Stats. 1941, Ch. 379.)
  173. 11532.6.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 13. Voluntary Mutualization of Incorporated Life and Life and Disability Insurers Having a Capital Stock and Issuing Nonassessable Policies on a Reserve Basis [11525 - 11533] ( Chapter 13 added by Stats. 1935, Ch. 530. ) ## ARTICLE 2. Execution of Plan [11529 - 11533] ( Article 2 added by Stats. 1935, Ch. 530. )

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    When an insurer is mutualized, the current directors stay in office until the first annual members’ meeting, and members elect directors at that meeting and every annual meeting after that.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 13. Voluntary Mutualization of Incorporated Life and Life and Disability Insurers Having a Capital Stock and Issuing Nonassessable Policies on a Reserve Basis [11525 - 11533] ( Chapter 13 added by Stats. 1935, Ch. 530. ) ## ARTICLE 2. Execution of Plan [11529 - 11533] ( Article 2 added by Stats. 1935, Ch. 530. ) ## 11532.6. The directors of the insurer in office at the time the insurer is mutualized as provided in this chapter shall continue in office until the first annual meeting of members. At the first annual meeting of members and at each annual meeting thereafter directors shall be elected by the members for the term or terms authorized by this chapter. (Added by Stats. 1941, Ch. 379.)
  174. 11532.7.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 13. Voluntary Mutualization of Incorporated Life and Life and Disability Insurers Having a Capital Stock and Issuing Nonassessable Policies on a Reserve Basis [11525 - 11533] ( Chapter 13 added by Stats. 1935, Ch. 530. ) ## ARTICLE 2. Execution of Plan [11529 - 11533] ( Article 2 added by Stats. 1935, Ch. 530. )

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    This section lets the articles of incorporation or bylaws create staggered director classes, limits any director term to six years, and sets default one-year terms when no such provision exists.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 13. Voluntary Mutualization of Incorporated Life and Life and Disability Insurers Having a Capital Stock and Issuing Nonassessable Policies on a Reserve Basis [11525 - 11533] ( Chapter 13 added by Stats. 1935, Ch. 530. ) ## ARTICLE 2. Execution of Plan [11529 - 11533] ( Article 2 added by Stats. 1935, Ch. 530. ) ## 11532.7. The articles of incorporation or the bylaws may provide that the directors may be divided into two or more classes whose terms of office shall expire at different times, but no term shall continue longer than six years. In the absence of such provisions, each director, except members of the board of directors at the time the insurer is mutualized, shall be elected for a term of one year. All directors shall hold office for the term for which they are elected and until their successors are elected and qualified. A director may, but need not be a member or policyholder of the insurer of which he is acting as director. Vacancies in the board of directors may be filled by a majority of the remaining directors, though less than a quorum, and each director so elected shall hold office until the next annual meeting. (Amended by Stats. 1959, Ch. 1105.)
  175. 11532.8.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 13. Voluntary Mutualization of Incorporated Life and Life and Disability Insurers Having a Capital Stock and Issuing Nonassessable Policies on a Reserve Basis [11525 - 11533] ( Chapter 13 added by Stats. 1935, Ch. 530. ) ## ARTICLE 2. Execution of Plan [11529 - 11533] ( Article 2 added by Stats. 1935, Ch. 530. )

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    Insurers mutualized under this chapter must follow the other applicable provisions of the code and the general corporation law in Section 1140.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 13. Voluntary Mutualization of Incorporated Life and Life and Disability Insurers Having a Capital Stock and Issuing Nonassessable Policies on a Reserve Basis [11525 - 11533] ( Chapter 13 added by Stats. 1935, Ch. 530. ) ## ARTICLE 2. Execution of Plan [11529 - 11533] ( Article 2 added by Stats. 1935, Ch. 530. ) ## 11532.8. All insurers mutualized under the provisions of this chapter shall be subject to all other applicable provisions of this code and to the provisions of the general corporation law as provided in Section 1140 of this code. (Added by Stats. 1941, Ch. 379.)
  176. 11533.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 13. Voluntary Mutualization of Incorporated Life and Life and Disability Insurers Having a Capital Stock and Issuing Nonassessable Policies on a Reserve Basis [11525 - 11533] ( Chapter 13 added by Stats. 1935, Ch. 530. ) ## ARTICLE 2. Execution of Plan [11529 - 11533] ( Article 2 added by Stats. 1935, Ch. 530. )

    Verify source ↗

    Article 8 of Chapter 1 of Part 2 of Division 1 does not apply to certain share transfers, policyholder certificates, and plan-related steps under this chapter.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 13. Voluntary Mutualization of Incorporated Life and Life and Disability Insurers Having a Capital Stock and Issuing Nonassessable Policies on a Reserve Basis [11525 - 11533] ( Chapter 13 added by Stats. 1935, Ch. 530. ) ## ARTICLE 2. Execution of Plan [11529 - 11533] ( Article 2 added by Stats. 1935, Ch. 530. ) ## 11533. The provisions of Article 8 of Chapter 1 of Part 2 of Division 1 of this code shall not apply to any of the following: (a) Shares of the capital stock of such insurer acquired as provided in section 11529 and assigned and transferred to the trustees as is provided in said section, and the assignment and transfer of said shares as so provided. (b) Any certificate or other instrument issued to a policyholder of such mutualized insurer conferring or evidencing membership in such mutualized insurer or conferring or evidencing such member’s right to participate in the profits or share in the assets of such mutualized insurer by virtue of his membership therein, and the issuance of such certificate or other instrument. (c) The plan for the acquisition of the outstanding shares of the capital stock of such insurer authorized by the provisions of this chapter, the submission of said plan to the commissioner and to the policyholders of such insurer as provided in this chapter, and the approval and carrying out of said plan or any part thereof in accordance with the provisions of this chapter. (Added by Stats. 1935, Ch. 530.)
  177. 11535.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 14. Conversion of an Incorporated Mutual Life or Life and Disability Insurer into an Incorporated Stock Life Insurer Issuing Policies on a Reserve Basis [11535 - 11549] ( Chapter 14 added by Stats. 1983, Ch. 988, Sec. 1. ) ## ARTICLE 1. Authority and Requirements to Convert [11535 - 11549] ( Article 1 added by Stats. 1983, Ch. 988, Sec. 1. )

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    Some mutual insurers and mutual holding companies may convert to stock entities under this chapter, but a medical malpractice mutual insurer may not convert to a stock insurer under this chapter.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 14. Conversion of an Incorporated Mutual Life or Life and Disability Insurer into an Incorporated Stock Life Insurer Issuing Policies on a Reserve Basis [11535 - 11549] ( Chapter 14 added by Stats. 1983, Ch. 988, Sec. 1. ) ## ARTICLE 1. Authority and Requirements to Convert [11535 - 11549] ( Article 1 added by Stats. 1983, Ch. 988, Sec. 1. ) ## 11535. (a) A domestic incorporated mutual life insurer, or life and disability insurer, issuing nonassessable policies on a reserve basis may be converted into an incorporated stock life or stock life and disability insurer issuing, on a reserve basis, nonassessable policies of life insurance or of both life and disability insurance. To that end, it may provide and carry out a plan for the conversion by complying with the requirements of this chapter. (b) A domestic incorporated mutual insurer not referred to in subdivision (a) and that is not a medical malpractice mutual insurer as defined in subdivision (i) of Section 4097.01, which may be referred to in this chapter as a mutual property-casualty insurer, may be converted into an incorporated stock property-casualty insurer. To that end, it may provide and carry out a plan for the conversion by complying with the requirements of this chapter. A medical malpractice mutual insurer as defined in subdivision (i) of Section 4097.01 may not convert to a stock insurer under this chapter. (c) A mutual holding company may be converted into a stock corporation. To that end, it may provide and carry out a plan for the conversion by complying with the requirements of this chapter. (d) As part of the conversion authorized in this section, a domestic incorporated mutual insurer may merge with an incorporated stock insurer, if the merging insurers comply with the provisions of this code applicable to their participation in the merger, or may transfer its domicile to any other state, if the insurer complies with Section 709.5. (Amended by Stats. 1998, Ch. 421, Sec. 5. Effective January 1, 1999.)
  178. 11535.1.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 14. Conversion of an Incorporated Mutual Life or Life and Disability Insurer into an Incorporated Stock Life Insurer Issuing Policies on a Reserve Basis [11535 - 11549] ( Chapter 14 added by Stats. 1983, Ch. 988, Sec. 1. ) ## ARTICLE 1. Authority and Requirements to Convert [11535 - 11549] ( Article 1 added by Stats. 1983, Ch. 988, Sec. 1. )

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    This section defines terms used in the chapter on converting certain mutual life insurers or mutual holding companies into stock insurers.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 14. Conversion of an Incorporated Mutual Life or Life and Disability Insurer into an Incorporated Stock Life Insurer Issuing Policies on a Reserve Basis [11535 - 11549] ( Chapter 14 added by Stats. 1983, Ch. 988, Sec. 1. ) ## ARTICLE 1. Authority and Requirements to Convert [11535 - 11549] ( Article 1 added by Stats. 1983, Ch. 988, Sec. 1. ) ## 11535.1. The definitions in this section apply to the following terms when used in this chapter. (a) “Adoption date” means the date the board of directors adopts the plan of conversion. (b) “Converted company” means the converted insurer or converted mutual holding company, as the case may be. (c) “Converted insurer” means the incorporated stock insurer into which a mutual insurer has been converted or merged or redomiciled in accordance with the provisions of this chapter. (d) “Converted mutual holding company” means the stock corporation into which a mutual holding company has been converted in accordance with this chapter. (e) “Converting mutual life company” means, for a plan of conversion under this chapter, the mutual life insurer or mutual holding company that is converting under such a plan. (f) “Effective date” means, for the conversion of a mutual life insurer, the date upon which the conversion of the mutual life insurer is effective, as specified in the commissioner’s amendment to the mutual life insurer’s certificate of authority issued in accordance with Section 11542, as a result of conversion proceedings under this chapter. For the conversion of a mutual holding company, “effective date” means the date upon which the conversion of a mutual holding company is effective, as specified in the amended articles of incorporation of the mutual holding company filed with the Secretary of State in accordance with Section 11542, as a result of conversion proceedings under this chapter. (g) “Eligible members” means, for the conversion of a mutual life insurer, the members of the mutual life insurer who are of record on the mutual life insurer’s adoption date. For the conversion of a mutual holding company, “eligible members” means the members of the mutual holding company who are of record on the mutual holding company’s adoption date. (h) “Member” means a person who, by the records of the mutual company and by its articles of incorporation or bylaws, is deemed to be a holder of a membership interest in the mutual company. For a mutual life insurer, a plan of conversion may provide that the term “member” also includes a person who is the owner of a policy issued or assumed by an insurer, that, pursuant to court order, is to be merged into the converted company. On and after the effective date of a plan of conversion that creates a mutual holding company, the term “member” means a member of a mutual holding company, as provided in Section 11542.1. (i) “Membership interests” means the interests of members arising under this code and the articles of incorporation and bylaws of the mutual company or otherwise by law. Membership interests include the right to vote for directors of the mutual company and the right to vote on any plan of merger, consolidation, reinsurance, or transfer of assets and liabilities of the mutual company. Membership interests do not include members’ rights in surplus, if any. (j) “Mutual company” means, in the case of a plan of conversion, the mutual life insurer, mutual property-casualty insurer, or mutual holding company that is converting pursuant to such plan. (k) “Mutual holding company” means a corporation organized under the laws of this state subject to the General Corporation Law as set forth in the Corporations Code. The articles of incorporation of a mutual holding company shall contain provisions stating the following: (1) It is a mutual holding company organized under this chapter. (2) One purpose of the mutual holding company is to hold not less than 51 percent of the voting stock of a stock holding company, which in turn holds all of the voting stock of a converted life insurer. (3) It is not authorized to issue voting stock. (4) Its members have the rights specified in Section 11542.1 and in its articles of incorporation and bylaws. (5) Its assets and liabilities are subject to inclusion in the estate of the converted insurer in any proceedings successfully prosecuted against the converted insurer under Article 14 (commencing with Section 1010) or Article 14.3 (commencing with Section 1064.1) of Chapter 1 of Part 2 of Division 1. (l) “Mutual insurer” means, in the case of a plan of conversion under this chapter, the mutual life insurer or mutual property-casualty insurer that is converting pursuant to such plan. (m) “Mutual life insurer” means a domestic incorporated mutual life insurer, or domestic mutual life and disability insurer, that issues nonassessable policies on a reserve basis. (n) “Person” means an individual, partnership, firm, association, corporation, joint-stock company, limited liability company, trust, government or governmental agency, state or political subdivision of a state, public or private corporation, board, association, estate, trustee, or fiduciary, or any similar entity. (o) “Plan of conversion” or “plan” means a plan adopted by a mutual company in compliance with this chapter. (p) “Policy” means an individual or group policy of insurance issued by a life insurer. If a policy of a mutual life insurer takes a form other than an individual form but holders of certificates or other interests under the policy are treated by the mutual life insurer as if they were holders of individual policies, the mutual life insurer may provide in its plan of conversion under this chapter that such a certificate or other interest is deemed to be a policy and deem the holder of the certificate or other interest to be an owner of a policy. Such a provision shall be for the sole purpose of determining the rights, if any, of policyholders of the mutual life insurer to vote upon and receive consideration under the plan of conversion and may not affect the other voting rights and qualifications of members of the mutual life insurer. (q) “Policyholder” means the holder of a policy other than a reinsurance contract. (r) “Rights in surplus,” for a mutual life insurer, means rights of members of the insurer to a return of that portion of the surplus that has not been apportioned or declared by the board of directors for policyholder dividends. “Rights in surplus” includes rights of members of the insurer to a distribution of surplus in liquidation or conservation of the insurer under this code, or in a dissolution or winding up. “Rights in surplus,” for a mutual holding company, means rights of members of the company to a return of any surplus that has not been apportioned or declared by its board of directors for member dividends. “Rights in surplus” includes rights of members of the mutual holding company to a distribution of surplus in liquidation or conservation of the insurer under this code, or in a dissolution or winding up. “Rights in surplus” does not include any right expressly conferred solely by the terms of an insurance policy. (s) “Stock holding company” means a corporation authorized to issue one or more classes of capital stock, the corporate purposes of which include holding all of the voting stock in an insurer that has been converted from a mutual life insurer to a stock life insurer in proceedings under Section 11537.2 in which a mutual holding company is formed. (t) “Voting stock” means securities of any class or any ownership interest having voting power for the election of directors, trustees, or management of a person, other than securities having voting power only because of the occurrence of a contingency. All references to a specified percentage of voting stock of any person mean securities having the specified percentage of the voting power in that person for the election of directors, trustees, or management of that person, other than securities having voting power only because of the occurrence of a contingency. (Amended by Stats. 1999, Ch. 868, Sec. 2. Effective January 1, 2000.)
  179. 11536.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 14. Conversion of an Incorporated Mutual Life or Life and Disability Insurer into an Incorporated Stock Life Insurer Issuing Policies on a Reserve Basis [11535 - 11549] ( Chapter 14 added by Stats. 1983, Ch. 988, Sec. 1. ) ## ARTICLE 1. Authority and Requirements to Convert [11535 - 11549] ( Article 1 added by Stats. 1983, Ch. 988, Sec. 1. )

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    A conversion plan must include the required corporate-amendment steps and be approved, submitted to the commissioner, approved by members, and then filed in the commissioner’s office.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 14. Conversion of an Incorporated Mutual Life or Life and Disability Insurer into an Incorporated Stock Life Insurer Issuing Policies on a Reserve Basis [11535 - 11549] ( Chapter 14 added by Stats. 1983, Ch. 988, Sec. 1. ) ## ARTICLE 1. Authority and Requirements to Convert [11535 - 11549] ( Article 1 added by Stats. 1983, Ch. 988, Sec. 1. ) ## 11536. The plan of conversion shall include appropriate proceedings for amending the mutual company’s articles of incorporation to give effect to the conversion from a nonstock corporation into a stock corporation. The plan shall be: (a) Approved by a resolution of the majority of the board of directors. The resolution shall specify the reasons for and the purposes of the proposed conversion of the mutual company and the manner in which the conversion is expected to benefit and serve the best interests of the policyholders, for a mutual insurer, or members, for a mutual holding company. (b) Submitted to the commissioner for consent in writing, subject to the provisions of Section 11538, by an application executed by an authorized officer of the mutual company and accompanied by the following documents, or true and correct copies of the documents: (1) The proposed plan of conversion. (2) The proposed articles of incorporation of each corporation that is a constituent corporation of the conversion. (3) The proposed bylaws of each corporation that is a constituent corporation of the conversion. (4) A list of the officers and directors, together with their biographies in the form customarily required by the commissioner, of each corporation that is a constituent corporation of the conversion. (5) The resolution of the board of directors of the mutual company, certified by the secretary of the board of directors, authorizing the conversion under this chapter. (6) Financial statements, which may be prepared on a pro forma basis, in the form required by the commissioner. (7) For a conversion of a mutual insurer, a plan of operations for the converted insurer. (8) A summary of the plan of conversion and drafts of written materials to be mailed to members seeking their approval of the plan. (9) Other relevant information that the commissioner may require. (c) Approved by a majority vote of the members of the mutual company voting at a meeting of the members called for that purpose, subject to the provisions of Section 11539. (d) Filed in the office of the commissioner after receipt of the commissioner’s consent, and after having been approved as provided in Sections 11538 and 11539, respectively. (Amended by Stats. 1996, Ch. 406, Sec. 4. Effective August 19, 1996.)
  180. 11537.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 14. Conversion of an Incorporated Mutual Life or Life and Disability Insurer into an Incorporated Stock Life Insurer Issuing Policies on a Reserve Basis [11535 - 11549] ( Chapter 14 added by Stats. 1983, Ch. 988, Sec. 1. ) ## ARTICLE 1. Authority and Requirements to Convert [11535 - 11549] ( Article 1 added by Stats. 1983, Ch. 988, Sec. 1. )

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    When a mutual property-casualty insurer converts, the plan must set a commissioner-approved formula for member equity, give eligible members a preemptive stock purchase right, and provide for cash or a certificate of contribution for members who do not buy stock.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 14. Conversion of an Incorporated Mutual Life or Life and Disability Insurer into an Incorporated Stock Life Insurer Issuing Policies on a Reserve Basis [11535 - 11549] ( Chapter 14 added by Stats. 1983, Ch. 988, Sec. 1. ) ## ARTICLE 1. Authority and Requirements to Convert [11535 - 11549] ( Article 1 added by Stats. 1983, Ch. 988, Sec. 1. ) ## 11537. For the conversion of a mutual property-casualty insurer, the plan for conversion shall include the following: (a) A fair and reasonable formula, approved by the commissioner, for determining the equity of each eligible member in the insurer. The equity shall be based upon an appraisal of the fair value of the insurer by one or more qualified disinterested persons appointed by the insurer with the approval of the commissioner. Those persons shall consider the assets and liabilities of the insurer and any factors bearing on the value of the mutual insurer. (b) Each eligible member of the mutual insurer shall be given a preemptive right to acquire his or her proportionate part of all of the proposed capital stock of the insurer, within a designated reasonable period, by applying upon the purchase of such part the amount of his or her equity as determined under the formula described in subdivision (a). (c) The members entitled to participate in the purchase of stock or distribution of assets shall be limited to all current policyholder members whose policies have been of record for not less than one year prior to the date the board of directors adopted the plan of conversion. (d) Each member not applying his or her equity upon the purchase price of stock shall elect to receive either a cash payment or a certificate of contribution. The cash payment shall not be greater than 50 percent of his or her equity as determined by the formula in subdivision (a). The certificate of contribution shall be in an amount equal to 100 percent of his or her equity, as determined by the formula in subdivision (a), shall bear interest at the rate established in Section 10489.4 for minimum standard valuation of all life insurance policies of more than 20 years’ duration issued in the year, and shall be repayable within 10 years or, if necessary under the terms of the plan, later, only on written approval of the commissioner and only out of surplus in excess of an amount established in the plan. Any member not electing to receive cash or purchase stock shall be deemed to have elected to receive a certificate of contribution. The stock purchased, cash payment, or certificate of contribution shall constitute full payment and discharge of the member’s equity or property interest in the mutual insurer, and, notwithstanding any other provision of law, the member shall have no other rights with respect thereto. (e) The number of shares to be authorized for the new stock insurer, their par value, and the method for determining the price at which the shares will be offered to eligible members, to the end that the plan, when completed, would provide for the converted insurer paid-in capital and surplus in an amount not less than the minimum paid-in capital and surplus required of a domestic stock insurer upon initial authorization to transact like kinds of insurance. (f) Provision for the offering to others of shares not purchased by eligible members within the designated period referred to in subdivision (b) at a price not less than the offering price to members. (Amended by Stats. 1996, Ch. 406, Sec. 5. Effective August 19, 1996.)
  181. 11537.1.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 14. Conversion of an Incorporated Mutual Life or Life and Disability Insurer into an Incorporated Stock Life Insurer Issuing Policies on a Reserve Basis [11535 - 11549] ( Chapter 14 added by Stats. 1983, Ch. 988, Sec. 1. ) ## ARTICLE 1. Authority and Requirements to Convert [11535 - 11549] ( Article 1 added by Stats. 1983, Ch. 988, Sec. 1. )

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    A plan for converting a mutual life insurer must provide either for a mutual holding company or for consideration, depending on the type of conversion.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 14. Conversion of an Incorporated Mutual Life or Life and Disability Insurer into an Incorporated Stock Life Insurer Issuing Policies on a Reserve Basis [11535 - 11549] ( Chapter 14 added by Stats. 1983, Ch. 988, Sec. 1. ) ## ARTICLE 1. Authority and Requirements to Convert [11535 - 11549] ( Article 1 added by Stats. 1983, Ch. 988, Sec. 1. ) ## 11537.1. For the conversion of a mutual life insurer, the plan of conversion shall provide for either a mutual holding company in compliance with Section 11537.2 or for consideration in compliance with Section 11537.3. For the conversion of a mutual holding company, the plan of conversion shall provide for consideration in compliance with Section 11537.3. (Added by Stats. 1996, Ch. 406, Sec. 6. Effective August 19, 1996.)
  182. 11537.2.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 14. Conversion of an Incorporated Mutual Life or Life and Disability Insurer into an Incorporated Stock Life Insurer Issuing Policies on a Reserve Basis [11535 - 11549] ( Chapter 14 added by Stats. 1983, Ch. 988, Sec. 1. ) ## ARTICLE 1. Authority and Requirements to Convert [11535 - 11549] ( Article 1 added by Stats. 1983, Ch. 988, Sec. 1. )

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    If a mutual life insurer adopts a conversion plan to create a mutual holding company, the plan must include several specified conversion steps.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 14. Conversion of an Incorporated Mutual Life or Life and Disability Insurer into an Incorporated Stock Life Insurer Issuing Policies on a Reserve Basis [11535 - 11549] ( Chapter 14 added by Stats. 1983, Ch. 988, Sec. 1. ) ## ARTICLE 1. Authority and Requirements to Convert [11535 - 11549] ( Article 1 added by Stats. 1983, Ch. 988, Sec. 1. ) ## 11537.2. A plan of conversion adopted by a mutual life insurer for the establishment of a mutual holding company shall provide that the mutual life insurer will become a stock life insurer, that the members of the mutual life insurer will become members of a mutual holding company, that the mutual holding company will acquire at least 51 percent of the voting stock of the stock holding company, and that the stock holding company will acquire all of the voting stock of the converted insurer. (Added by Stats. 1996, Ch. 406, Sec. 7. Effective August 19, 1996.)
  183. 11537.3.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 14. Conversion of an Incorporated Mutual Life or Life and Disability Insurer into an Incorporated Stock Life Insurer Issuing Policies on a Reserve Basis [11535 - 11549] ( Chapter 14 added by Stats. 1983, Ch. 988, Sec. 1. ) ## ARTICLE 1. Authority and Requirements to Convert [11535 - 11549] ( Article 1 added by Stats. 1983, Ch. 988, Sec. 1. )

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    A converting mutual life company’s conversion plan must include specified terms about member rights, subscription rights, allocation methods, pricing, and any public offering.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 14. Conversion of an Incorporated Mutual Life or Life and Disability Insurer into an Incorporated Stock Life Insurer Issuing Policies on a Reserve Basis [11535 - 11549] ( Chapter 14 added by Stats. 1983, Ch. 988, Sec. 1. ) ## ARTICLE 1. Authority and Requirements to Convert [11535 - 11549] ( Article 1 added by Stats. 1983, Ch. 988, Sec. 1. ) ## 11537.3. A plan of conversion adopted by a converting mutual life company shall include the following: (a) (1) The plan provides that each member’s membership interests and rights in surplus are extinguished and each eligible member will receive, without payment, nontransferable subscription rights to purchase a portion of the capital stock of a corporation which will issue the subscription rights, or, in lieu thereof, shares of capital stock or other securities of the issuer, cash, premium credits, or credits to policy account values having an aggregate value equal to the aggregate exercise price of the subscription rights that otherwise would have been allocated to the member. The issuer is either (A) the converted insurer, (B) a corporation, the voting stock of which is owned by the mutual life insurer or the mutual holding company, as the case may be, or by any other persons, that will acquire in the conversion all the voting stock of the converted insurer, or (C) a corporation, all of the voting stock of which is owned by the mutual holding company into which both the mutual holding company and the stock holding company will be merged. (2) The subscription rights are allocated in whole shares among the eligible members. The subscription rights, capital stock, cash, premium credits, and credits to policy account values are allocated among the eligible members using a fair and equitable formula. This formula will either (A) allocate a fixed component per capita among eligible members (specifying how joint owners will be treated for this purpose) and allocate a variable component among eligible members in proportion to the cash value of policies held by them, or (B) allocate the subscription rights, capital stock, cash, or credits in any other manner that the commissioner may approve. (b) The plan specifies or authorizes the board of directors of the converting mutual life company to set the expiration date of the subscription rights, if any, allocated by the plan. The exercise price per share of the subscription rights is 50 percent of the price per share at which the capital stock of the issuer is first offered to the public in the offering referred to in subdivision (d), as fixed at the time of the offering by the boards of directors of the converting mutual life company and the issuer or committees of the boards. (c) The plan provides that any eligible member not exercising the subscription rights, if any, allocated to the member will instead receive alternative forms of consideration having an aggregate value equal to the aggregate exercise price of the subscription rights allocated to the member. The alternative forms of consideration may include shares of capital stock of the issuer, cash, premium credits, or credits to policy account values. The choices available to the eligible member shall be specified in the plan. The choices available may take into account the type of policy, size of policy, tax status of the member, and other factors that the commissioner determines are appropriate. (d) The plan provides that the issuer will make a public offering of its capital stock at a price determined by the boards of directors of the converting mutual life company and the issuer. The number of shares to be offered is determined according to the plan and may include any shares issuable upon exercise of subscription rights that are not exercised. The plan may also provide for the issue and sale of securities of the issuer to other persons at the time of the public offering. However, any plan provisions pertaining to the issuance and sale of securities to the insurer’s officers, directors, employees, agents, and employee benefit plans for their benefit shall be subject to Section 11540. (e) The plan of a mutual life insurer may provide for the establishment, for policyholder dividend purposes only, of a closed block. The closed block will consist of all of the participating individual policies of life insurance of the mutual life insurer in force on the effective date of the plan for which the insurer had an experience-based dividend scale payable in the year in which the plan is adopted. Assets of the insurer shall be allocated to the closed block in an amount that produces cash-flows, together with anticipated revenues from the closed block business, expected to be sufficient (1) to support the closed block business, including payment of claims and those expenses and taxes specified in the plan and (2) to provide for continuation of dividend scales in effect on the adoption date if the experience underlying the scales continues, and for appropriate adjustments in the scales if the experience changes. The plan may provide for conditions under which the converted insurer may cease to maintain the closed block and its allocated assets. Regardless of such a cessation, the obligation under the policies constituting the closed block business remain the obligations of the converted insurer. Dividends on those policies shall be apportioned by the board of directors of the converted insurer in accordance with the terms of the policies. (f) In lieu of the provisions contemplated by subdivisions (a) to (d), inclusive, a plan may be adopted by a converting mutual life company that: (1) Is fair and equitable to the members of the converting mutual life company and provides for consideration to the members having a value equal to or greater than the value of the consideration that would have been payable to the members pursuant to a plan of conversion contemplated by subdivisions (a) to (d), inclusive. (2) Has been approved by a resolution of the majority of the board of directors that specifies the basis on which the board of directors of the converting mutual life company finds that adopting the plan of conversion under this subdivision meets the requirements of paragraph (1). (3) Provides that each member’s membership interests and rights in surplus are extinguished and each eligible member will receive, without payment by the member, consideration that is allocated among the eligible members using a fair and equitable formula. This formula will either (A) allocate a fixed component per capita among eligible members, specifying how joint owners will be treated for this purpose, and allocate a variable component among eligible members in proportion to the cash value of policies held by them, or (B) allocate the consideration in any other manner that the commissioner may approve. (4) Provides that eligible members may receive one or more kinds of consideration, including shares of capital stock of the converting mutual life company or shares of capital stock (or interests in shares of capital stock) of a corporation that, after the conversion, directly or indirectly, controls the converted insurer, cash, premium credits, or credits to pay policy account values, as set forth in the plan. (5) Provides for either of the following: (A) The conversion of the converting mutual life company into a domestic stock corporation. (B) The conversion of the converting mutual life company by means of a merger (i) in the case of a mutual life insurer into a domestic stock corporation, provided the corporation has been issued a certificate of authority, or (ii) in the case of a converting mutual holding company into a domestic or foreign stock corporation, and, in the case of that merger: (I) The merger and conversion shall be subject to the provisions of this chapter other than subdivisions (a) to (d), inclusive. (II) Chapter 11 (commencing with Section 1100), Chapter 12 (commencing with Section 1200), and Chapter 13 (commencing with Section 1300), of Division 1 of the Corporations Code shall not apply to the converting mutual life company in the merger except that Section 1107 of the Corporations Code shall apply. (III) The merger and conversion shall become effective upon the filing of appropriate instruments with the Secretary of State. (6) The plan may also provide for the converted company, or a corporation that will directly or indirectly control the converted insurer after the conversion, to issue and sell its securities to other persons at the time of the conversion. Any plan provisions pertaining to the issuance and sale of securities to the insurer’s officers, directors, employees, agents, and employee benefit plans for their benefit shall be subject to Section 11540. (Amended by Stats. 1999, Ch. 868, Sec. 5. Effective January 1, 2000.)
  184. 11538.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 14. Conversion of an Incorporated Mutual Life or Life and Disability Insurer into an Incorporated Stock Life Insurer Issuing Policies on a Reserve Basis [11535 - 11549] ( Chapter 14 added by Stats. 1983, Ch. 988, Sec. 1. ) ## ARTICLE 1. Authority and Requirements to Convert [11535 - 11549] ( Article 1 added by Stats. 1983, Ch. 988, Sec. 1. )

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    The commissioner must review the conversion plan and must approve it if specific fairness, legality, and licensing conditions are met. The commissioner may also hold a hearing, require plan changes, and appoint consultants.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 14. Conversion of an Incorporated Mutual Life or Life and Disability Insurer into an Incorporated Stock Life Insurer Issuing Policies on a Reserve Basis [11535 - 11549] ( Chapter 14 added by Stats. 1983, Ch. 988, Sec. 1. ) ## ARTICLE 1. Authority and Requirements to Convert [11535 - 11549] ( Article 1 added by Stats. 1983, Ch. 988, Sec. 1. ) ## 11538. (a) The commissioner shall examine the plan submitted pursuant to subdivision (b) of Section 11536. As a part of the examination the commissioner may order a hearing on the plan after written notice of the hearing to the mutual company, and its members, all of whom shall have the right to appear at the hearing. The commissioner may require as a condition of consent that the mutual company make modifications of the proposed plan that the commissioner finds necessary for the protection of policyholders. The commissioner shall consent to the plan if he or she finds all of the following: (1) For the conversion of a mutual insurer, the plan is fair and equitable to the insurer and its policyholders. (2) For the conversion of a mutual holding company, the plan is fair and equitable to the company, its members, and the policyholders of the converted insurer. (3) The plan does not violate the law. (4) The converted insurer will, after the conversion, satisfy the requirements for the issuance of a license to write the line or lines of insurance for which it is presently licensed. (b) For the conversion of a converting mutual life company, the commissioner may appoint one or more actuarial, financial, or other consultants, including legal counsel, as the commissioner finds necessary to advise the commissioner in making the determination of whether the proposed plan of conversion meets the applicable requirements of this chapter. The converting mutual life company is responsible for the reasonable fees and expenses of any actuarial, financial, or other consultants, including legal counsel, appointed, and for the mailing and publication of notices to the mutual company and its members. (Amended by Stats. 1999, Ch. 868, Sec. 6. Effective January 1, 2000.)
  185. 11539.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 14. Conversion of an Incorporated Mutual Life or Life and Disability Insurer into an Incorporated Stock Life Insurer Issuing Policies on a Reserve Basis [11535 - 11549] ( Chapter 14 added by Stats. 1983, Ch. 988, Sec. 1. ) ## ARTICLE 1. Authority and Requirements to Convert [11535 - 11549] ( Article 1 added by Stats. 1983, Ch. 988, Sec. 1. )

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    This section says who must call the members’ meeting, how notice must be sent, how voting is done, and what quorum is required.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 14. Conversion of an Incorporated Mutual Life or Life and Disability Insurer into an Incorporated Stock Life Insurer Issuing Policies on a Reserve Basis [11535 - 11549] ( Chapter 14 added by Stats. 1983, Ch. 988, Sec. 1. ) ## ARTICLE 1. Authority and Requirements to Convert [11535 - 11549] ( Article 1 added by Stats. 1983, Ch. 988, Sec. 1. ) ## 11539. The meeting of members prescribed by subdivision (c) of Section 11536 shall be called by the board of directors, the chairperson of the board, or the president of the mutual company. Notice of the meeting shall be given to eligible members by mail at least 30 days prior to the date set for the meeting to members of the mutual company of record on the date the plan of conversion was adopted by the board of directors. Voting shall be by ballot, in person or by proxy. A quorum shall consist of 5 percent of the members of the mutual company entitled to vote at the meeting. (Amended by Stats. 1996, Ch. 406, Sec. 10. Effective August 19, 1996.)
  186. 1154.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2. Incorporated Insurers [1140 - 1260] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Restrictions on Activities [1152 - 1155] ( Article 2 enacted by Stats. 1935, Ch. 145. )

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    After the stated period, Sections 1153 and 1153.5 stop applying to the insurers covered by them, and they do not limit certain merger-, consolidation-, or reinsurance-based insurers if the specified three-year condition is 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 2. Incorporated Insurers [1140 - 1260] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Restrictions on Activities [1152 - 1155] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 1154. After the period specified in Sections 1153 and 1153.5, the requirements of those sections shall no longer be applicable to any insurer specified therein and shall no longer affect or modify the application or nonapplication of any section of this code. The provisions of Sections 1153 and 1153.5 shall not govern or limit the investments of any insurer formed by merger, consolidation, or reinsurance of the entire business of any one or more admitted insurers if any one or more of the merged, consolidated, reinsuring or reinsured insurers was, prior to such consolidation, merger, or reinsurance, admitted, or authorized to do business as an insurer in any state, for a period of three or more years. (Amended by Stats. 1949, Ch. 339.)
  187. 11540.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 14. Conversion of an Incorporated Mutual Life or Life and Disability Insurer into an Incorporated Stock Life Insurer Issuing Policies on a Reserve Basis [11535 - 11549] ( Chapter 14 added by Stats. 1983, Ch. 988, Sec. 1. ) ## ARTICLE 1. Authority and Requirements to Convert [11535 - 11549] ( Article 1 added by Stats. 1983, Ch. 988, Sec. 1. )

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    In a conversion plan, specified insurer insiders may be allowed to buy certain stock, but the plan cannot let them exceed stated ownership caps.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 14. Conversion of an Incorporated Mutual Life or Life and Disability Insurer into an Incorporated Stock Life Insurer Issuing Policies on a Reserve Basis [11535 - 11549] ( Chapter 14 added by Stats. 1983, Ch. 988, Sec. 1. ) ## ARTICLE 1. Authority and Requirements to Convert [11535 - 11549] ( Article 1 added by Stats. 1983, Ch. 988, Sec. 1. ) ## 11540. (a) Nothing in this chapter shall be deemed to prohibit the inclusion in the plan of conversion of provisions under which the insurer’s officers, directors, employees, agents, and employee benefit plans for their benefit may be entitled, in accordance with reasonable classifications of those individuals and employee benefit plans as may be included in the plan, to purchase for cash, at the same price as offered to the public in the initial public offering, voting stock not purchased by members upon exercise of subscription rights. Nothing in this chapter shall be deemed to prohibit the establishment of stock option, incentive, and share ownership plans customary for publicly traded companies in the same and similar industries. The plan may not permit those persons to acquire more than 25 percent of the voting stock issued pursuant to the plan for a mutual life insurer having assets in excess of two hundred million dollars ($200,000,000) or 35 percent for a mutual life insurer having assets of two hundred million dollars ($200,000,000) or less. (b) For the conversion of a mutual property-casualty insurer, subdivision (f) of Section 11537 does not prohibit the inclusion in the conversion plan of provisions under which the individuals comprising the insurer’s management, employees and agents are entitled to purchase for cash, at the same price as offered to the insurer’s members, shares of stock not taken by members on the preemptive offering to members, in accordance with such reasonable classifications of such individuals as may be included in the plan. The plan may not provide for such individuals to acquire in excess of 25 percent of the shares of stock issued pursuant to the plan for a mutual insurer having assets in excess of two hundred million dollars ($200,000,000) or 35 percent for a mutual insurer having assets of two hundred million dollars ($200,000,000) or less. (Amended by Stats. 1996, Ch. 406, Sec. 11. Effective August 19, 1996.)
  188. 11541.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 14. Conversion of an Incorporated Mutual Life or Life and Disability Insurer into an Incorporated Stock Life Insurer Issuing Policies on a Reserve Basis [11535 - 11549] ( Chapter 14 added by Stats. 1983, Ch. 988, Sec. 1. ) ## ARTICLE 1. Authority and Requirements to Convert [11535 - 11549] ( Article 1 added by Stats. 1983, Ch. 988, Sec. 1. )

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    Certain directors, officers, agents, and employees of a mutual company may not take fees, commissions, or other valuable consideration for helping with a conversion, except as allowed in the commissioner-approved plan.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 14. Conversion of an Incorporated Mutual Life or Life and Disability Insurer into an Incorporated Stock Life Insurer Issuing Policies on a Reserve Basis [11535 - 11549] ( Chapter 14 added by Stats. 1983, Ch. 988, Sec. 1. ) ## ARTICLE 1. Authority and Requirements to Convert [11535 - 11549] ( Article 1 added by Stats. 1983, Ch. 988, Sec. 1. ) ## 11541. No director, officer, agent, or employee of the mutual company shall receive any fee, commission, or other valuable consideration whatsoever, other than regular salary and compensation, for in any manner aiding, promoting, or assisting in the conversion except as set forth in the plan approved by the commissioner. This provision shall not be deemed to prohibit the payment of reasonable fees and compensation to attorneys at law, accountants, and actuaries for services performed in the independent practice of their professions, even though they may also be directors of the mutual company. (Amended by Stats. 1996, Ch. 406, Sec. 12. Effective August 19, 1996.)
  189. 11541.1.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 14. Conversion of an Incorporated Mutual Life or Life and Disability Insurer into an Incorporated Stock Life Insurer Issuing Policies on a Reserve Basis [11535 - 11549] ( Chapter 14 added by Stats. 1983, Ch. 988, Sec. 1. ) ## ARTICLE 1. Authority and Requirements to Convert [11535 - 11549] ( Article 1 added by Stats. 1983, Ch. 988, Sec. 1. )

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    Before a conversion plan takes effect, the mutual company may amend or withdraw it, but any amendment needs the commissioner’s written consent.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 14. Conversion of an Incorporated Mutual Life or Life and Disability Insurer into an Incorporated Stock Life Insurer Issuing Policies on a Reserve Basis [11535 - 11549] ( Chapter 14 added by Stats. 1983, Ch. 988, Sec. 1. ) ## ARTICLE 1. Authority and Requirements to Convert [11535 - 11549] ( Article 1 added by Stats. 1983, Ch. 988, Sec. 1. ) ## 11541.1. At any time before that plan of conversion becomes effective as provided in Section 11542, the mutual company may, by resolution of a majority of the board of directors, amend the plan of conversion or withdraw the plan of conversion. Any plan amendment shall require the written consent of the commissioner. For a plan amendment, all references in this chapter to the plan of conversion shall be deemed to refer to the plan as amended, but no amendment shall be deemed to change the adoption date of the plan of conversion. No amendment may change the plan of conversion in a manner that the commissioner determines is materially disadvantageous to policyholders of the mutual life insurer or members of the mutual holding company, unless a further public hearing is held on the plan as amended, if the amendment is made after the initial public hearing, or if the plan as amended is submitted for reconsideration by the members if the amendment is made after the plan has been approved by the members. (Added by Stats. 1996, Ch. 406, Sec. 13. Effective August 19, 1996.)
  190. 11542.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 14. Conversion of an Incorporated Mutual Life or Life and Disability Insurer into an Incorporated Stock Life Insurer Issuing Policies on a Reserve Basis [11535 - 11549] ( Chapter 14 added by Stats. 1983, Ch. 988, Sec. 1. ) ## ARTICLE 1. Authority and Requirements to Convert [11535 - 11549] ( Article 1 added by Stats. 1983, Ch. 988, Sec. 1. )

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    This section tells the commissioner and the Secretary of State what to do after an insurer conversion plan is approved and filed, and it states the conversion effects on the insurer and members’ interests.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 14. Conversion of an Incorporated Mutual Life or Life and Disability Insurer into an Incorporated Stock Life Insurer Issuing Policies on a Reserve Basis [11535 - 11549] ( Chapter 14 added by Stats. 1983, Ch. 988, Sec. 1. ) ## ARTICLE 1. Authority and Requirements to Convert [11535 - 11549] ( Article 1 added by Stats. 1983, Ch. 988, Sec. 1. ) ## 11542. (a) Upon consent by the commissioner to the plan of conversion of a mutual insurer and filing of the plan of conversion in accordance with the provisions of this chapter, the commissioner shall issue a new certificate of authority to the converted insurer. Upon issuance of the certificate of authority to a mutual insurer and subject to subdivision (a) of Section 110 of the Corporations Code, the Secretary of State shall accept for filing the articles of incorporation, certificate of amendment of articles of incorporation, or agreement of merger and officers’ certificates of the converted insurer for the conversion of a mutual insurer. For a plan of conversion in accordance with Section 11537.2, the Secretary of State shall accept for filing the articles of incorporation of the mutual holding company and the stock holding company. Upon consent to the plan of conversion of a mutual holding company and filing of the plan of conversion in accordance with the provisions of this chapter, the Secretary of State shall accept for filing the articles of incorporation or certificate of amendment of articles of incorporation of the converted mutual holding company. The plan is effective upon the filing of the articles of incorporation or certificate of amendment of articles of incorporation. (b) Upon the effective date of the plan of conversion of a mutual property-casualty insurer, the mutual insurer shall immediately become a stock corporation. The converted insurer shall be a continuation of the original mutual insurer, and the conversion shall in no way annul, modify, or change any of the original mutual insurer’s existing suits, rights, contracts, or liabilities except as provided in the approved conversion plan. The insurer, after conversion, shall exercise all the rights and powers and perform all the duties conferred or imposed by law upon insurers writing the classes of insurance written by it, and shall retain the rights and contracts existing prior to conversion, subject to the effect of the plan. (c) Upon the effective date of the plan of conversion of a mutual life insurer in accordance with Section 11537.3, the mutual life insurer immediately becomes a stock corporation, all membership interests and rights in surplus are extinguished, and members eligible to exercise subscription rights or receive other consideration under the plan of conversion are entitled to receive the consideration in exchange for their membership interests and liquidation of their rights in surplus. The converted insurer is a continuation of the original mutual life insurer, and the conversion in no way annuls, modifies, or changes any of the original mutual life insurer’s existing suits, rights, contracts, or liabilities, except as provided in the plan of conversion. The insurer, after conversion, shall exercise all the rights and powers and perform all the duties conferred or imposed by law upon insurers writing the classes of insurance written by it, and shall retain the rights and contracts existing prior to conversion, subject to the effect of the plan. (d) Upon the effective date of the plan of conversion of a mutual holding company, all membership interests and rights in surplus are extinguished, members eligible to receive consideration under the plan of conversion are entitled to receive the consideration in exchange for their membership interests and liquidation of their rights in surplus, and the plan otherwise becomes effective in accordance with its terms. The conversion in no way annuls, modifies, or changes any of the converting mutual holding company’s existing suits, rights, contracts, or liabilities, except as provided in the approved plan of conversion. (Amended by Stats. 1996, Ch. 406, Sec. 14. Effective August 19, 1996.)
  191. 11542.1.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 14. Conversion of an Incorporated Mutual Life or Life and Disability Insurer into an Incorporated Stock Life Insurer Issuing Policies on a Reserve Basis [11535 - 11549] ( Chapter 14 added by Stats. 1983, Ch. 988, Sec. 1. ) ## ARTICLE 1. Authority and Requirements to Convert [11535 - 11549] ( Article 1 added by Stats. 1983, Ch. 988, Sec. 1. )

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    After a conversion, the mutual holding company and stock holding company must maintain specified stock ownership levels, members get voting and notice rights, and the company cannot dissolve without approval.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 14. Conversion of an Incorporated Mutual Life or Life and Disability Insurer into an Incorporated Stock Life Insurer Issuing Policies on a Reserve Basis [11535 - 11549] ( Chapter 14 added by Stats. 1983, Ch. 988, Sec. 1. ) ## ARTICLE 1. Authority and Requirements to Convert [11535 - 11549] ( Article 1 added by Stats. 1983, Ch. 988, Sec. 1. ) ## 11542.1. (a) Upon the effective date of a plan of conversion in accordance with Section 11537.2, the mutual life insurer immediately becomes a stock corporation, the membership interests and rights in surplus of its members are extinguished, the members of the mutual life insurer immediately become members of the mutual holding company, all of the voting stock initially issued by the converted insurer is owned by the stock holding company, and all of the voting stock initially issued by the stock holding company is owned by the mutual holding company. The stock holding company may thereafter, subject to compliance with Article 8 (commencing with Section 820) of Chapter 1 of Part 2 of Division 1, issue securities to other persons. After the effective date, owners of policies that are issued by a stock insurer that has been converted from a mutual life insurer pursuant to proceedings under this chapter shall become members of the mutual holding company immediately upon issuance of the policies. Any person may be a member of a mutual holding company. (b) From the effective date, the mutual holding company shall hold at least 51 percent of the issued and outstanding voting stock of the stock holding company and the stock holding company thereafter shall at all times hold all of the issued and outstanding voting stock of the converted insurer. The stock holding company may issue additional voting stock to the mutual holding company and, in addition, to other persons an amount of voting stock and securities convertible into voting stock, if in the aggregate, the issued and outstanding voting stock of the stock holding company not held by the mutual holding company does not exceed 49 percent of the issued and outstanding voting stock of the stock holding company. For purposes of the 49-percent limitation, any issued and outstanding securities of the stock holding company that are convertible into voting stock are considered issued and outstanding voting stock. (c) The commissioner shall retain jurisdiction over the mutual holding company organized pursuant to this chapter. Except as provided in this code, a mutual holding company is subject to the provisions of the General Corporation Law in like manner with other corporations. However, provisions of that law referring to shareholders or members shall be applied as though those provisions referred to the members of a mutual holding company. (d) With respect to the management, records, and affairs of a mutual holding company and except as otherwise provided in this chapter, a member of a mutual holding company has the same character of rights and relationship as a stockholder has toward a domestic stock life insurer subject to the provisions of this code. (e) Each member of a mutual holding company is entitled to one vote on each matter coming to a vote at any meeting of members, regardless of the number of policies that the member holds. (f) Notice of all meetings of members, whether annual or special, shall be given in writing to the members entitled to vote. The notice shall be given by the secretary, assistant secretary, or other persons charged with that duty. If there is no such officer, or if he or she neglects or refuses this duty, notice may be given by any director. At the option of the converted insurer, the notice may be imprinted on premium notices or receipts or on both. A notice may be given to any member either personally, or by mail, or other means of written communication, charges prepaid, addressed to the member at his or her address appearing on the books of the insurer or given by the member to the converted insurer for the purpose of notice. If a member gives no address, and if there is no address on the books of the insurer, notice shall be deemed to have been given the member if sent by mail or other means of written communication addressed to the place where the principal office of the converted insurer is situated, or if published at least once in a newspaper of general circulation in the county in which the office is located and in the newspaper that has the largest daily circulation in this state. Notice of any meeting of members shall be sent to each member entitled to notice not less than 14 days before a meeting. Notice of any meeting of members shall specify the place, the day, and the hour of the meeting and the general nature of the business to be transacted. For any member who gives no address and has no address on the books of the insurer, notice of an annual meeting to be held at the time and place specified is deemed adequate if published at least once in each of four successive weeks in a newspaper of general circulation in the county in which the principal office of the converted insurer is located and in the newspaper that has the largest daily circulation in this state. If the notice is so published, no other notice of the meeting is required. (g) The presence in person or by proxy of 5 percent of the members of a mutual holding company entitled to vote at any meeting constitutes a quorum for the transaction of all business of the mutual holding company, including, but not limited to, the amendment of the articles of incorporation or bylaws of the mutual holding company. (h) Any required member approval shall be by the affirmative vote of a majority of the members who vote, or a higher percentage of the members as may be required by law or the articles of incorporation, a quorum being present. (i) The articles of incorporation or the bylaws of the mutual holding company may provide that the directors may be divided into two or more classes whose terms of office shall expire at different times. No term shall continue longer than six years. In the absence of such provisions, each director shall be elected for a term of one year. All directors shall hold office for the term for which they are elected and until their successors are elected and qualified. A director may, but need not, be a member of the mutual holding company of which he or she is acting as director. Vacancies in the board of directors may be filled by a majority of the remaining directors, though less than a quorum. Each director so elected shall hold office until the next annual meeting. (j) If any proceedings under Article 14 (commencing with Section 1010), Article 14.3 (commencing with Section 1064.1), Article 14.5 (commencing with Section 1065.1), or Article 15.5 (commencing with Section 1077), of Chapter 1 of Part 2 of Division 1, are brought naming as a party a stock insurer created as a result of proceedings authorized by this chapter, the mutual holding company formed as part of the conversion automatically becomes a party to the proceedings. All of the assets of the mutual holding company, including, but not limited to, its interest in the stock holding company formed pursuant to this chapter, are deemed assets of the estate of the stock life insurer to the extent necessary to satisfy claims of persons against the stock life insurer who have claims falling within the priorities established in paragraphs (1) to (5), inclusive, of subdivision (a) of Section 1033. Claims of persons in their capacity as members of the mutual holding company shall be claims falling within the priority established in paragraph (6) of subdivision (a) of Section 1033. A mutual holding company may not dissolve, liquidate, or wind up and dissolve without the prior written approval of the commissioner or the court pursuant to proceedings brought pursuant to Article 15 (commencing with Section 1070) of Chapter 1 of Part 2 of Division 1. (k) Membership interests in a mutual holding company are exempt from Article 8 (commencing with Section 820) of Chapter 1 of Part 2 of Division 1. A description of the membership interests and related factual disclosure shall not be considered to be an inducement to buy insurance in violation of Section 10430. Any promise of returns, profits, or distributions, or representations with regard to the benefits of membership, made as an inducement in connection with the issuance and delivery of a policy is subject to Section 10430 and the remedy provided in Section 10433. (Added by Stats. 1996, Ch. 406, Sec. 15. Effective August 19, 1996.)
  192. 11542.2.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 14. Conversion of an Incorporated Mutual Life or Life and Disability Insurer into an Incorporated Stock Life Insurer Issuing Policies on a Reserve Basis [11535 - 11549] ( Chapter 14 added by Stats. 1983, Ch. 988, Sec. 1. ) ## ARTICLE 1. Authority and Requirements to Convert [11535 - 11549] ( Article 1 added by Stats. 1983, Ch. 988, Sec. 1. )

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    For five years before and after the conversion plan’s effective date, a person or group acting together may not buy or offer to buy 5% or more of a converted insurer’s voting securities without the commissioner’s prior consent.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 14. Conversion of an Incorporated Mutual Life or Life and Disability Insurer into an Incorporated Stock Life Insurer Issuing Policies on a Reserve Basis [11535 - 11549] ( Chapter 14 added by Stats. 1983, Ch. 988, Sec. 1. ) ## ARTICLE 1. Authority and Requirements to Convert [11535 - 11549] ( Article 1 added by Stats. 1983, Ch. 988, Sec. 1. ) ## 11542.2. (a) Prior to, and for a period of five years following, the effective date of the plan of conversion, no person or group of persons acting in concert shall directly or indirectly offer to acquire or acquire in any manner the beneficial ownership of 5 percent or more of any class of voting securities of a converted insurer or of a person that controls, as defined by subdivision (c) of Section 1215, the converted insurer, without the prior consent of the commissioner. Any application for that approval shall contain information as the commissioner may require and shall be accompanied by a filing fee in an amount equal to the filing fee specified in Section 1215.2. (b) In the event of any violation of this section, or of any action that, if consummated, would constitute a violation, all voting securities of the converted insurer or of the person acquired by any person in excess of the maximum amount permitted to be acquired by the person pursuant to this subdivision shall be deemed to be nonvoting securities of the converted insurer or of that person. The violation or action may be enforced or enjoined by an appropriate proceeding commenced by the converted insurer, a person, the commissioner, any policyholder or stockholder of the converted insurer, or the person on behalf of the converted insurer or the person in the superior court in the judicial district in which the converted insurer has its home office or in any other court having jurisdiction. The court may issue any order it finds necessary to cure the violation or to prevent the proposed action. In addition to the foregoing, whenever it appears to the commissioner that any person has committed a violation of this section, the commissioner may proceed as provided in Article 14 (commencing with Section 1010) of Chapter 1 of Part 2 of Division 1 to take possession of the property of the converted insurer and to conduct the business thereof. (c) For the purposes of this section, “beneficial ownership,” with respect to voting securities, means the sole or shared power to vote, or direct the voting of, voting securities or the sole or shared power to dispose, or direct the disposition, of voting securities. (d) For the purposes of this section, “voting security” includes voting stock as defined in Section 11535.1, any preorganization certificate or subscription, including subscription rights issued pursuant to a plan of conversion, or any security convertible, with or without consideration, into voting security, or carrying any warrant or right to subscribe for, or purchase any, voting security, or any such warrant or right. (e) For the purposes of this section, “offer” includes an offer to buy or acquire, solicitation of an offer to sell, tender offer for, or request or invitation for tenders of a security or interest in a security for value. (Amended by Stats. 2017, Ch. 417, Sec. 30. (AB 1696) Effective January 1, 2018.)
  193. 11543.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 14. Conversion of an Incorporated Mutual Life or Life and Disability Insurer into an Incorporated Stock Life Insurer Issuing Policies on a Reserve Basis [11535 - 11549] ( Chapter 14 added by Stats. 1983, Ch. 988, Sec. 1. ) ## ARTICLE 1. Authority and Requirements to Convert [11535 - 11549] ( Article 1 added by Stats. 1983, Ch. 988, Sec. 1. )

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

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 14. Conversion of an Incorporated Mutual Life or Life and Disability Insurer into an Incorporated Stock Life Insurer Issuing Policies on a Reserve Basis [11535 - 11549] ( Chapter 14 added by Stats. 1983, Ch. 988, Sec. 1. ) ## ARTICLE 1. Authority and Requirements to Convert [11535 - 11549] ( Article 1 added by Stats. 1983, Ch. 988, Sec. 1. ) ## 11543. Unless otherwise provided in the plan of conversion, the directors and officers of the mutual company shall serve as directors and officers of the converted company until new directors and officers have been duly elected and qualified pursuant to the articles of incorporation and bylaws of the stock company. (Amended by Stats. 1996, Ch. 406, Sec. 17. Effective August 19, 1996.)
  194. 11543.1.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 14. Conversion of an Incorporated Mutual Life or Life and Disability Insurer into an Incorporated Stock Life Insurer Issuing Policies on a Reserve Basis [11535 - 11549] ( Chapter 14 added by Stats. 1983, Ch. 988, Sec. 1. ) ## ARTICLE 1. Authority and Requirements to Convert [11535 - 11549] ( Article 1 added by Stats. 1983, Ch. 988, Sec. 1. )

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    This section sets deadlines for lawsuits and judicial review related to plan conversions and plan amendments.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 14. Conversion of an Incorporated Mutual Life or Life and Disability Insurer into an Incorporated Stock Life Insurer Issuing Policies on a Reserve Basis [11535 - 11549] ( Chapter 14 added by Stats. 1983, Ch. 988, Sec. 1. ) ## ARTICLE 1. Authority and Requirements to Convert [11535 - 11549] ( Article 1 added by Stats. 1983, Ch. 988, Sec. 1. ) ## 11543.1. (a) Notwithstanding any other provision of law and except as otherwise provided in subdivision (b), actions concerning any plan of conversion, proposed plan of conversion, plan amendment, or proposed plan amendment under this chapter or any acts taken or proposed to be taken under this chapter shall be commenced within one year after the plan of conversion or plan amendment is filed in the office of the commissioner pursuant to subdivision (d) of Section 11536 or subdivision (a) of Section 11542, or six months from the effective date of the plan of conversion, whichever is later. If the plan of conversion is withdrawn, the actions or acts shall be commenced within six months from the date the board of directors approves a resolution to withdraw the plan. If an action concerns or arises out of a plan amendment or proposed plan amendment made under Section 11546, the applicable time period is measured from the filing, effective date, or approval of withdrawal of the plan amendment, whichever is later. (b) Judicial review of any act of the commissioner or any other governmental body or officer concerning or arising out of any plan of conversion, proposed plan of conversion, plan amendment, or proposed plan amendment under this chapter may only be had by filing a petition for a writ of mandate within 30 days of the date of the act. However, any petition seeking judicial review shall be filed no later than 30 days from the effective date of the plan of conversion or plan amendment, whichever is the subject of the petition. (Added by Stats. 1996, Ch. 406, Sec. 18. Effective August 19, 1996.)
  195. 11544.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 14. Conversion of an Incorporated Mutual Life or Life and Disability Insurer into an Incorporated Stock Life Insurer Issuing Policies on a Reserve Basis [11535 - 11549] ( Chapter 14 added by Stats. 1983, Ch. 988, Sec. 1. ) ## ARTICLE 1. Authority and Requirements to Convert [11535 - 11549] ( Article 1 added by Stats. 1983, Ch. 988, Sec. 1. )

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    Sales or offers of securities issued under an approved conversion plan are exempt from Article 8.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 14. Conversion of an Incorporated Mutual Life or Life and Disability Insurer into an Incorporated Stock Life Insurer Issuing Policies on a Reserve Basis [11535 - 11549] ( Chapter 14 added by Stats. 1983, Ch. 988, Sec. 1. ) ## ARTICLE 1. Authority and Requirements to Convert [11535 - 11549] ( Article 1 added by Stats. 1983, Ch. 988, Sec. 1. ) ## 11544. The offer or sale of securities issued pursuant to the plan of conversion developed and approved in accordance with the provisions of this chapter, shall be exempt from Article 8 (commencing with Section 820) of Chapter 1 of Part 2 of Division 1. (Added by Stats. 1983, Ch. 988, Sec. 1.)
  196. 11545.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 14. Conversion of an Incorporated Mutual Life or Life and Disability Insurer into an Incorporated Stock Life Insurer Issuing Policies on a Reserve Basis [11535 - 11549] ( Chapter 14 added by Stats. 1983, Ch. 988, Sec. 1. ) ## ARTICLE 1. Authority and Requirements to Convert [11535 - 11549] ( Article 1 added by Stats. 1983, Ch. 988, Sec. 1. )

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    The commissioner may make, amend, and rescind rules needed to carry out this chapter, and may charge the insurer for the state’s reasonably incurred expenses.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 14. Conversion of an Incorporated Mutual Life or Life and Disability Insurer into an Incorporated Stock Life Insurer Issuing Policies on a Reserve Basis [11535 - 11549] ( Chapter 14 added by Stats. 1983, Ch. 988, Sec. 1. ) ## ARTICLE 1. Authority and Requirements to Convert [11535 - 11549] ( Article 1 added by Stats. 1983, Ch. 988, Sec. 1. ) ## 11545. The commissioner shall have the authority from time to time, to make, amend and rescind such rules and regulations as may be necessary to carry out the provisions of this chapter. The commissioner shall also have the authority to charge and collect from the insurer for the actual amount of expenses reasonably incurred by the state in discharge of the commissioner’s duties hereunder. (Added by Stats. 1983, Ch. 988, Sec. 1.)
  197. 11546.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 14. Conversion of an Incorporated Mutual Life or Life and Disability Insurer into an Incorporated Stock Life Insurer Issuing Policies on a Reserve Basis [11535 - 11549] ( Chapter 14 added by Stats. 1983, Ch. 988, Sec. 1. ) ## ARTICLE 1. Authority and Requirements to Convert [11535 - 11549] ( Article 1 added by Stats. 1983, Ch. 988, Sec. 1. )

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    After conversion is completed and the certificate of authority under Section 11542 is issued, the Secretary of State must accept a verified copy of the amended articles of incorporation for filing.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 14. Conversion of an Incorporated Mutual Life or Life and Disability Insurer into an Incorporated Stock Life Insurer Issuing Policies on a Reserve Basis [11535 - 11549] ( Chapter 14 added by Stats. 1983, Ch. 988, Sec. 1. ) ## ARTICLE 1. Authority and Requirements to Convert [11535 - 11549] ( Article 1 added by Stats. 1983, Ch. 988, Sec. 1. ) ## 11546. Upon completion of the act of conversion and issuance of the certificate of authority under Section 11542, the Secretary of State shall accept for filing a verified copy of the amended articles of incorporation. (Added by Stats. 1983, Ch. 988, Sec. 1.)
  198. 11547.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 14. Conversion of an Incorporated Mutual Life or Life and Disability Insurer into an Incorporated Stock Life Insurer Issuing Policies on a Reserve Basis [11535 - 11549] ( Chapter 14 added by Stats. 1983, Ch. 988, Sec. 1. ) ## ARTICLE 1. Authority and Requirements to Convert [11535 - 11549] ( Article 1 added by Stats. 1983, Ch. 988, Sec. 1. )

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    A plan amendment for a converted insurance company can take effect only after board approval, written commissioner consent, required member or policyholder approval, and filing with the commissioner.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 14. Conversion of an Incorporated Mutual Life or Life and Disability Insurer into an Incorporated Stock Life Insurer Issuing Policies on a Reserve Basis [11535 - 11549] ( Chapter 14 added by Stats. 1983, Ch. 988, Sec. 1. ) ## ARTICLE 1. Authority and Requirements to Convert [11535 - 11549] ( Article 1 added by Stats. 1983, Ch. 988, Sec. 1. ) ## 11547. (a) The amended articles of incorporation of a converted company that have been adopted pursuant to a plan of conversion and filed with the Secretary of State in accordance with Section 11542 may be further amended after the effective date pursuant to applicable law. The plan of conversion may be amended in other respects after the effective date of the plan as specified in this section. Such an amendment shall take effect upon filing with the Secretary of State after compliance with the following: (1) Approval by a resolution of the majority of the board of directors of the converted company. The resolution shall specify the reasons for and the purposes of the proposed amendment. (2) Submission to the commissioner for consent in writing, subject to the provisions of Section 11538. (3) For the conversion of a mutual insurer, approval by a majority of those current policyholders of the corporation who were members of the former mutual insurer and were entitled to vote on the original plan of conversion approved pursuant to subdivision (c) of Section 11536 and who vote at a meeting called for that purpose. (4) For the conversion of a mutual holding company, approval by a majority of those current members of the corporation who were members of the former mutual holding company and were entitled to vote on the original plan of conversion approved pursuant to subdivision (c) of Section 11536 and who vote at a meeting called for that purpose. (5) Filed in the office of the commissioner after having been consented to and approved as contemplated by paragraphs (2), (3) and (4). (b) If an amendment proposed under subdivision (a) would adversely affect the rights of one or more classes of members , but not all such members, then only the members of each class whose rights would be adversely affected by the proposed amendment are entitled to vote on the proposed plan amendment. (c) A policyholder or member meeting prescribed by paragraph (3) or (4) of subdivision (a) shall be called by the board of directors, the chairperson of the board, or the president of the converted company. Notice of the meeting shall be given to policyholders or members entitled to vote at the meeting by mail at least 30 days prior to the date set for the meeting. Voting shall be by ballot, in person or by proxy. A quorum consists of 5 percent of the policyholders or members of the converted company entitled to vote at the meeting. (d) At any time before the plan amendment becomes effective, the converted company may, by resolution of a majority of the board of directors, amend the plan amendment or withdraw its plan amendment. For an amendment to a plan amendment, all references in this section to the plan amendment shall be deemed to refer to the plan amendment as amended. Any amendment of the plan amendment shall require the written consent of the commissioner. No amendment shall be deemed to change the date of adoption of the plan amendment. No amendment made after approval by the policyholders or members as provided in paragraph (3) or (4) of subdivision (a) may change the plan amendment in a manner that the commissioner determines is materially disadvantageous to any of the affected policyholders or members unless the plan amendment as amended is submitted for reconsideration under the procedures prescribed for the original plan amendment policyholder or member approval. (Added by Stats. 1996, Ch. 406, Sec. 19. Effective August 19, 1996.)
  199. 11548.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 14. Conversion of an Incorporated Mutual Life or Life and Disability Insurer into an Incorporated Stock Life Insurer Issuing Policies on a Reserve Basis [11535 - 11549] ( Chapter 14 added by Stats. 1983, Ch. 988, Sec. 1. ) ## ARTICLE 1. Authority and Requirements to Convert [11535 - 11549] ( Article 1 added by Stats. 1983, Ch. 988, Sec. 1. )

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    A converting mutual life insurer may keep using “mutual” in its new stock insurer name if the name also identifies it as a stock insurer and the commissioner is not likely to be misled or deceived.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 14. Conversion of an Incorporated Mutual Life or Life and Disability Insurer into an Incorporated Stock Life Insurer Issuing Policies on a Reserve Basis [11535 - 11549] ( Chapter 14 added by Stats. 1983, Ch. 988, Sec. 1. ) ## ARTICLE 1. Authority and Requirements to Convert [11535 - 11549] ( Article 1 added by Stats. 1983, Ch. 988, Sec. 1. ) ## 11548. If the name of a mutual life insurer converting to a stock insurer pursuant to this chapter includes the word mutual, the new stock insurer may continue to use the word mutual in its name if the name includes a word or words that identify the new stock insurer as a stock insurer and the commissioner finds that the continued use of the word mutual in its name is not likely to mislead or deceive the public. (Added by Stats. 1996, Ch. 406, Sec. 20. Effective August 19, 1996.)
  200. 11549.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 14. Conversion of an Incorporated Mutual Life or Life and Disability Insurer into an Incorporated Stock Life Insurer Issuing Policies on a Reserve Basis [11535 - 11549] ( Chapter 14 added by Stats. 1983, Ch. 988, Sec. 1. ) ## ARTICLE 1. Authority and Requirements to Convert [11535 - 11549] ( Article 1 added by Stats. 1983, Ch. 988, Sec. 1. )

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    A mutual holding company may merge into a foreign mutual holding company if the domicile conditions are met and required approvals, filings, notice, and commissioner consent are completed.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 14. Conversion of an Incorporated Mutual Life or Life and Disability Insurer into an Incorporated Stock Life Insurer Issuing Policies on a Reserve Basis [11535 - 11549] ( Chapter 14 added by Stats. 1983, Ch. 988, Sec. 1. ) ## ARTICLE 1. Authority and Requirements to Convert [11535 - 11549] ( Article 1 added by Stats. 1983, Ch. 988, Sec. 1. ) ## 11549. (a) Pursuant to this section, a mutual holding company may merge into a foreign mutual holding company that is domiciled in a state to which the converted insurer has transferred its domicile or will transfer its domicile concurrently with the merger. The merger shall be effected pursuant to an agreement of merger between the mutual holding company and the foreign mutual holding company in accordance with the General Corporation Law, to the extent not inconsistent with this section. The merger shall take effect upon filing the agreement of merger with the California Secretary of State after compliance with the following: (1) Approval of the agreement of merger by a resolution of the majority of the board of directors of the mutual holding company and signing of the agreement of merger by the parties thereto. (2) Approval of an amendment to the converted insurer’s plan of conversion in accordance with Section 11547 by a resolution of the majority of the board of directors of the converted insurer in order to reflect appropriately the merger and transfer of domicile. (3) Submission of the agreement of merger and the amendment to the commissioner for consent in writing. (4) Approval of the agreement of merger by a majority of the members of the mutual holding company who vote at a meeting called for that purpose. (5) Approval of the amendment by a majority of the members of the mutual holding company who were members of the converted insurer and were entitled to vote on the original plan of conversion approved pursuant to subdivision (c) of Section 11536 and who vote at a meeting called for the purpose. (6) Filing of the agreement of merger in the office of the commissioner after having been consented to and approved as contemplated by paragraphs (2), (3), (4), and (5). (b) The submission to the commissioner prescribed in paragraph (3) of subdivision (a) shall be accompanied by a filing fee of eight thousand one hundred dollars ($8,100), evidence that the foreign mutual holding company that will survive the merger is qualified as a foreign corporation under the General Corporation Law, and any other relevant information that the commissioner may require. (c) The meetings of members prescribed in paragraphs (4) and (5) of subdivision (a) and shall be called by the board of directors, the chairperson of the board, or the president of the mutual holding company, and may be combined at a single meeting with separate voting by those eligible to vote on the matters referred to in paragraphs (4) and (5) of subdivision (a). Notice of the meeting shall be given by mail to members entitled to vote at the meeting at least 30 days prior to the date set for the meeting. Voting shall be by ballot, in person, or by proxy. A quorum for each such matter consists of 5 percent of the members of the mutual holding company entitled to vote at the meeting on the matter. (d) The commissioner shall consent to any proposed merger and amendment if he or she determines that the merger will be fair and equitable to the mutual holding company and its members. (Added by Stats. 2006, Ch. 740, Sec. 12. Effective January 1, 2007.)

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