kind: section

code: INS

citation: INS § 1

text: This act shall be known as the Insurance Code.

history: (History: Enacted by Stats. 1935, Ch. 145.)


citation: INS § 2

text: The provisions of this code in so far as they are substantially the same as existing statutory provisions relating to the same subject matter shall be construed as restatements and continuations thereof, and not as new enactments.


citation: INS § 3

text: All persons who, at the time this code goes into effect, hold office under any of the acts repealed by this code, which offices are continued by this code, continue to hold the same according to the former tenure thereof.


citation: INS § 4

text: No action or proceeding commenced before this code takes effect, and no right accrued, is affected by the provisions of this code, but all procedure thereafter taken therein shall conform to the provisions of this code so far as possible.


citation: INS § 5

text: Unless the context otherwise requires, the general provisions hereinafter set forth shall govern the construction of this code.


citation: INS § 6

text: Division, part, chapter, article, and section headings contained herein shall not be deemed to govern, limit, modify or in any manner affect the scope, meaning, or intent of the provisions of any division, part, chapter, article, or section hereof.


citation: INS § 7

text: Whenever, by the provisions of this code, a power is granted to a public officer or a duty imposed upon such an officer, the power may be exercised or the duty performed by a deputy of the officer or by a person authorized pursuant to law by the officer, unless it is expressly otherwise provided.


citation: INS § 8

text: Writing includes any form of recorded message capable of comprehension by ordinary visual means. Whenever any notice, report, statement or record is required or authorized by this code, it shall be made in writing in the English language unless it is otherwise expressly provided.


citation: INS § 9

text: Whenever any reference is made to any portion of this code or of any other law of this State, such reference shall apply to all amendments and additions thereto now or hereafter made.


citation: INS § 10

text: “Section” means a section of this code unless some other statute is specifically mentioned and “subdivision” or “subsection” means a subdivision or subsection of the section in which that term occurs unless some other section is expressly mentioned.

history: (History: Amended by Stats. 1955, Ch. 471.)


citation: INS § 11

text: The present tense includes the past and future tenses; and the future, the present.


citation: INS § 12

text: The masculine gender includes the feminine and neuter.


citation: INS § 12.2

text: “Spouse” includes “registered domestic partner,” as required by Section 297.5 of the Family Code.

history: (History: Added by Stats. 2016, Ch. 50, Sec. 56. (SB 1005) Effective January 1, 2017.)


citation: INS § 13

text: The singular number includes the plural, and the plural the singular.


citation: INS § 14

text: “County” includes “city and county.”


citation: INS § 15

text: “City” includes “city and county.”


citation: INS § 16

text: As used in this code the word “shall” is mandatory and the word “may” is permissive, unless otherwise apparent from the context.


citation: INS § 17

text: “Oath” includes affirmation.


citation: INS § 18

text: “Signature” or “subscription” includes mark when the signer or subscriber can not write, such signer’s or subscriber’s name being written near the mark by a witness who writes his own name near the signer’s or subscriber’s name; but a signature or subscription by mark can be acknowledged or can serve as a signature or subscription to a sworn statement only when two witnesses so sign their own names thereto.


citation: INS § 19

text: “Person” means any person, association, organization, partnership, business trust, limited liability company, or corporation.

history: (History: Amended by Stats. 1994, Ch. 1010, Sec. 172. Effective January 1, 1995.)


citation: INS § 20

text: “Commissioner” means the Insurance Commissioner of this State.


citation: INS § 20.5

text: Whenever in this code the terms “State Industrial Accident Commission” or “Industrial Accident Commission” or “commission,” relating to the said “State Industrial Accident Commission” or the said “Industrial Accident Commission,” appear, said terms shall mean “Division of Industrial Accidents,” including “administrative director” of said division or “appeals board,” or both, as the context may require.

history: (History: Added by Stats. 1965, Ch. 1513.)


citation: INS § 21

text: “Division,” and “department,” in reference to the government of this state, mean the Department of Insurance of this state.

history: (History: Amended by Stats. 1990, Ch. 1239, Sec. 4.)


citation: INS § 21.5

text:
(a) “Administrative law bureau” or “administrative hearing bureau” means the unit within the Department of Insurance that provides administrative hearings.

(b) An administrative law judge appointed by the commissioner pursuant to civil service rules shall be employed within the administrative law bureau and shall not be supervised directly by the commissioner or supervised directly or indirectly by an employee in the legal branch of the department.

history: (History: Added by Stats. 2002, Ch. 709, Sec. 1. Effective January 1, 2003.)


citation: INS § 22

text: Insurance is a contract whereby one undertakes to indemnify another against loss, damage, or liability arising from a contingent or unknown event.


citation: INS § 23

text: The person who undertakes to indemnify another by insurance is the insurer, and the person indemnified is the insured.


citation: INS § 24

text: “Admitted,” in relation to a person, means entitled to transact insurance business in this state, having complied with the laws imposing conditions precedent to transaction of such business. The State Compensation Insurance Fund shall be deemed to be admitted pursuant to authority to transact workers’ compensation insurance granted by the Legislature. The commissioner shall not revoke or suspend the State Compensation Insurance Fund’s authority to transact workers’ compensation insurance.

history: (History: Amended by Stats. 2006, Ch. 740, Sec. 1. Effective January 1, 2007.)


citation: INS § 25

text: “Nonadmitted,” in relation to a person, means not entitled to transact insurance business in this State, whether by reason of failure to comply with conditions precedent thereto, or by reason of inability so to comply.


citation: INS § 26

text: “Domestic” means organized under the laws of this State, whether or not admitted.


citation: INS § 27

text: “Foreign” means not organized under the laws of this State, whether or not admitted.


citation: INS § 28

text: “State” means the State of California, unless applied to the different parts of the United States. In the latter case, it includes the District of Columbia, the commonwealths and the territories.

history: (History: Amended by Stats. 1965, Ch. 373.)


citation: INS § 29

text: “Mortgage” includes a trust deed, “mortgagor” includes a trustor under such trust deed, “mortgagee” includes a beneficiary under such trust deed, or a trustee exercising powers or performing duties granted to or imposed upon him thereunder, and “lien” in respect to real or personal property includes a charge or incumbrance arising out of a trust deed.


citation: INS § 30

text: “Resident” means residing in this State, “nonresident” means not residing in this State.


citation: INS § 31

text: “Insurance agent” means a person authorized, by and on behalf of an insurer, to transact all classes of insurance other than life, disability, or health insurance, on behalf of an admitted insurance company.

history: (History: Amended by Stats. 2010, Ch. 400, Sec. 1. (AB 2782) Effective January 1, 2011.)


citation: INS § 32

text:
(a) A life and accident and health or sickness licensee is a person authorized to act as a life agent on behalf of a life insurer or a disability insurer to transact any of the following:

(1) Life insurance.

(2) Accident and health or sickness insurance.

(3) Life and accident and health or sickness insurance.

(b) Licenses to act as a life agent under this chapter shall be of the types as set forth in Section 1626.

(c) A life agent may be authorized to transact 24-hour care coverage, as defined in Section 1749.02, pursuant to the requirements of subdivision (b) of Section 1749.33.

history: (History: Amended by Stats. 2025, Ch. 566, Sec. 1. (AB 943) Effective January 1, 2026.)


citation: INS § 32.5

text: “Life and disability insurance analyst” means a person who, for a fee or compensation of any kind, paid by or derived from any person or source other than an insurer, advises, purports to advise, or offers to advise any person insured under, named as beneficiary of, or having any interest in, a life or disability insurance contract, in any manner concerning that contract or his or her rights in respect thereto.

history: (History: Amended by Stats. 1983, Ch. 962, Sec. 1.)


citation: INS § 33

text: “Insurance broker” means a person who, for compensation and on behalf of another person, transacts insurance other than life, disability, or health with, but not on behalf of, an insurer.

history: (History: Amended by Stats. 2010, Ch. 400, Sec. 2. (AB 2782) Effective January 1, 2011.)


citation: INS § 33.5

text:
(a) “Casualty broker-agent” means a person licensed pursuant to Section 1625.

(b) “Property broker-agent” means a person licensed pursuant to Section 1625.

history: (History: Amended by Stats. 2011, Ch. 411, Sec. 1. (AB 1416) Effective January 1, 2012.)


citation: INS § 34

text: “Insurance solicitor” means a natural person employed to aid a property and casualty broker-agent acting as an insurance agent or insurance broker in transacting insurance other than life, disability, or health.

history: (History: Amended by Stats. 2010, Ch. 400, Sec. 3. (AB 2782) Effective January 1, 2011.)


citation: INS § 35

text:
“Transact” as applied to insurance includes any of the following:

(a) Solicitation.

(b) Negotiations preliminary to execution.

(c) Execution of a contract of insurance.

(d) Transaction of matters subsequent to execution of the contract and arising out of it.


citation: INS § 36

text:
“Paid-in capital” or “capital paid-in” means:

(a) In the case of a foreign mutual insurer not issuing or having outstanding capital stock, the value of its assets in excess of the sum of its liabilities for losses reported, expenses, taxes, and all other indebtedness and reinsurance of outstanding risks as provided by law. Such foreign mutual insurer shall not be admitted, however, unless its paid-in capital is composed of available cash assets amounting to at least $200,000.00.

(b) In the case of a foreign joint stock and mutual insurer, its paid-in capital computed, according to its desire, pursuant to the provisions of subdivision (a) or subdivision (c) of this section. If computed pursuant to the provisions of subdivision (a), its admission is subject to the qualification therein expressed.

(c) In the case of all other insurers, the lower of the following amounts:

(1) The value of its assets in excess of the sum of its liabilities for losses reported, expenses, taxes, and all other indebtedness and reinsurance of outstanding risks as provided by law.

(2) The aggregate par value of its issued shares of stock, including treasury shares.

For the purpose of computing paid-in capital or capital paid-in, shares of stock are not taken as liabilities.


citation: INS § 37

text: Provisions of this code relating to a particular class of insurance or a particular type of insurer prevail over provisions relating to insurance in general or insurers in general.


citation: INS § 38

text: Unless expressly otherwise provided, any notice required to be given to any person by any provision of this code may be given by mailing notice, postage prepaid, addressed to the person to be notified, at his residence or principal place of business in this State. The affidavit of the person who mails the notice, stating the facts of such mailing, is prima facie evidence that the notice was thus mailed.


citation: INS § 38.6

text:
(a) (1) A written record required to be given or mailed to a person by a licensee, including an offer of renewal required by Sections 663 and 678, the notice of policy change or cancellation requested by the insured as required by Section 667.5, the notice of conditional renewal required by Section 678.1, the offer of coverage or renewal or a disclosure required by Section 10086, the offer of renewal for a workers’ compensation policy, Section 662, paragraph (2) of subdivision (a) of Section 663, Section 664, 667.5, 673, 677, paragraph (2) of subdivision (a) of Section 678, subdivisions (a), (b), and (c) of Section 678.1, or a written record required to be given or mailed to a person by a licensee relating to the business of life insurance, as defined in Section 101 of this code may, if not excluded by subdivision (b) or (c) of Section 1633.3 of the Civil Code, be provided by electronic transmission pursuant to Title 2.5 (commencing with Section 1633.1) of Part 2 of Division 3 of the Civil Code, if each party has agreed to conduct the transaction by electronic means pursuant to Section 1633.5 of the Civil Code, and if the licensee complies with this section. A valid electronic signature is sufficient for any law requiring a written signature.

(2) For purposes of this section, the definitions set forth in Section 1633.2 of the Civil Code apply. The term “licensee” means an insurer, agent, broker, or any other person who is required to be licensed by the department.

(3) Notwithstanding subdivision (l) of Section 1633.2 of the Civil Code, for purposes of this section, “person” includes, but is not limited to, the policy owner, policyholder, applicant, insured, or assignee or designee of an insured.

(b) In order to transmit a record listed in subdivision (a) electronically, a licensee shall comply with all of the following:

(1) A licensee, or licensee’s representative, acquires the consent of the person to opt in to receive the record by electronic transmission, and the person has not withdrawn that consent, prior to providing the record by electronic transmission. A person’s consent may be acquired verbally, in writing, or electronically. If consent is acquired verbally, the licensee shall confirm consent in writing or electronically. The licensee shall retain a record of the person’s consent to receive the record by electronic transmission with the policy information so that it is retrievable upon request by the department while the policy is in force and for five years thereafter.

(2) A licensee discloses, in writing or electronically, to the person all of the following:

(A) The opt in to receive the record by electronic transmission is voluntary.

(B) That the person may opt out of receiving the record by electronic transmission at any time, and the process or system for the person to opt out.

(C) A description of the record that the person will receive by electronic transmission.

(D) The process or system to report a change or correction in the person’s email address.

(E) The licensee’s contact information, that includes, but is not limited to, a toll-free number or the licensee’s internet website address.

(3) The opt-in consent disclosure required by paragraph (2) may be set forth in the application or in a separate document that is part of the policy approved by the commissioner and shall be bolded or otherwise set forth in a conspicuous manner. The person’s signature shall be set forth immediately below the opt-in consent disclosure. If the licensee seeks consent at any time prior to the completion of the application, consent and signature shall be obtained before the application is completed. If the person has not opted in at the time the application is completed, the licensee may receive the opt-in consent at any time thereafter, pursuant to the same opt-in requirements that apply at the time of the application. The licensee shall retain a copy of the signed opt-in consent disclosure with the policy information so that each is retrievable upon request by the department while the policy is in force and for five years thereafter.

(4) The email address of the person who has consented to electronic transmission shall be set forth on the consent disclosure. In addition, if the person who consented receives an annual statement, the email address of the person who has consented shall be set forth on that record.

(5) The licensee shall annually provide one free printed copy of any record described in this subdivision upon request by the person.

(6) If a provision of this code requires a licensee to transmit a record by first-class mail, regular mail, does not specify a method of delivery, or is a record that is required to be provided pursuant to Article 6.6 (commencing with Section 791), and if the licensee is not otherwise prohibited from transmitting the record electronically under subdivision (b) of Section 1633.8 of the Civil Code, then the record may be transmitted by electronic transmission if the licensee complies with all of the requirements of Sections 1633.15 and 1633.16 of the Civil Code.

(7) Notwithstanding subdivision (b) of Section 1633.8 of the Civil Code, if a provision of this code requires a licensee to transmit a record by return receipt, registered mail, certified mail, signed written receipt of delivery, or other method of delivery evidencing actual receipt by the person, and if the licensee is not otherwise prohibited from transmitting the record electronically under Section 1633.3 of the Civil Code and this section, then the licensee shall maintain a process or system that demonstrates proof of delivery and actual receipt of the record by the person consistent with this paragraph. The licensee shall document and retain information demonstrating delivery and actual receipt so that it is retrievable, upon request, by the department at least five years after the policy is no longer in force. The record provided by electronic transmission shall be treated as if actually received if the licensee delivers the record to the person in compliance with applicable statutory delivery deadlines. A licensee may demonstrate actual delivery and receipt by any of the following:

(A) The person acknowledges receipt of the electronic transmission of the record by executing an electronic signature.

(B) The record is posted on the licensee’s secure internet website, and there is evidence demonstrating that the person logged onto the licensee’s secure internet website and downloaded, printed, or otherwise acknowledged receipt of the record.

(C) The record is transmitted to the named insured through an application on a personal electronic device that is secured by password, biometric identifier, or other technology, and there is evidence demonstrating that the person logged into the application and viewed or otherwise acknowledged receipt of the record.

(D) If a licensee is unable to demonstrate actual delivery and receipt pursuant to this paragraph, the licensee shall resend the record by regular mail to the person in the manner originally specified by the underlying provision of this code.

(8) Notwithstanding any other law, a notice of lapse, nonrenewal, cancellation, or termination of any product subject to this section may be transmitted electronically if the licensee demonstrates proof of delivery as set forth in paragraph (7) and complies with the other provisions in this section.

(9) If the record is not delivered directly to the electronic address designated by the person but placed at an electronic address accessible to the person, a licensee shall notify the person in plain, clear, and conspicuous language at the electronic address designated by the person that describes the record, informs that person that it is available at another location, and provides instructions to the person as to how to obtain the record.

(10) (A) Upon a licensee receiving information indicating that the record sent by electronic transmission was not received by the person, the licensee shall, within five business days, comply with either clause (i) or (ii):

(i) Contact the person to confirm or update the person’s email address and resend the record by electronic transmission. If the licensee elects to resend the record by electronic transmission, the licensee shall demonstrate the transmission was received by the person, pursuant to paragraph (6), (7), or (8). If the licensee is unable to confirm or update the person’s email address, the licensee shall resend the record by regular mail to the licensee at the address shown on the policy, or, if the underlying statute requires delivery in a specified manner, send the record in that specified manner.

(ii) Resend the record initially provided by electronic transmission by regular mail to the insured at the address shown on the policy, or, if the underlying statute requires delivery in a specified manner, send the record in that specified manner.

(B) If the licensee sends the first electronic record within the time period required by law and the licensee complies with both paragraph (5) and subparagraph (A) of this paragraph, the record sent pursuant to clause (i) or (ii) of subparagraph (A) shall be treated as if mailed in compliance with the applicable statutory regular mail delivery deadlines.

(11) The licensee shall not charge any person who declines to opt in to receive a record through electronic transmission from receiving a record electronically. The licensee shall not provide a discount or an incentive to any person to opt in to receive electronic records.

(12) The licensee shall verify a person’s email address via paper writing sent by regular mail when more than 12 months have elapsed since the licensee’s last electronic communication.

(c) An insurance agent or broker acting under the direction of a party that enters into a contract by means of an electronic record or electronic signature shall not be held liable for any deficiency in the electronic procedures agreed to by the parties under that contract if all of the following are met:

(1) The insurance agent or broker has not engaged in negligent, reckless, or intentional tortious conduct.

(2) The insurance agent or broker was not involved in the development or establishment of the electronic procedures.

(3) The insurance agent or broker did not deviate from the electronic procedures.

(d) On or before January 1, 2022, the commissioner shall submit a report to the Governor and to the committees of the Senate and Assembly having jurisdiction over insurance and the judiciary, regarding insurer compliance with laws governing electronic transmissions of insurance transactions, including renewal offers, notices, or disclosures. The commissioner shall ensure the report addresses the use of electronic transmissions by insurers conducting the business of insurance, the department’s enforcement actions relating to those electronic transmissions, and the impact of those enforcement actions on insurer compliance rates.

(e) Notwithstanding paragraph (4) of subdivision (b) of Section 1633.3 of the Civil Code, a statutory requirement for a separate acknowledgment, signature, or initial that is not expressly prohibited by subdivision (c) of Section 1633.3 of the Civil Code may be transacted using an electronic signature, or by electronic transaction, subject to all applicable provisions of this section.

(f) (1) Whenever the commissioner has reason to believe that a licensee has been or is engaged in conduct in this state that violates this section, or if the commissioner believes that a licensee has been or is engaged in conduct outside this state that has an effect on an insurance risk located within this state and that violates this section, the commissioner shall issue and serve upon that licensee a statement of charges and notice of hearing to be held at a time and place fixed in the notice. The date for the hearing shall be not less than 30 days after the date of service.

(2) At the time and place fixed for the hearing, the licensee charged shall have an opportunity to answer the charges against it and present evidence on its behalf. Upon good cause shown, the commissioner shall permit any adversely affected person to appear and be heard at the hearing by counsel or in person.

(3) At any hearing conducted pursuant to this section, the commissioner may administer oaths, examine and cross-examine witnesses, and receive oral and documentary evidence. The commissioner shall have the power to subpoena witnesses, compel their attendance, and require the production of books, papers, records, correspondence, and other documents that are relevant to the hearing. A stenographic record of the hearing shall be made upon the request of any party or at the discretion of the commissioner. If no stenographic record is made and if judicial review is sought, the commissioner shall prepare a statement of the evidence for use on review. Hearings conducted under this section shall be governed by the same rules of evidence and procedure applicable to administrative proceedings conducted under the laws of this state.

(4) Statements of charges, notice, orders, and other processes of the commissioner under this section may be served by anyone duly authorized to act on behalf of the commissioner. Service of process may be completed in the manner provided by law for service of process in civil actions or by registered mail or by a mailing service offered by a third-party with tracking capability that is not more expensive than registered mail. A copy of the statement of charges, notice, order, or other process shall be provided to the person or persons whose rights under this section have been allegedly violated. A verified return setting forth the manner of service, the return postcard receipt in the case of registered mail, or signed receipt documentation shall be sufficient proof of service.

(5) If, after a hearing pursuant to paragraphs (1) through (4), the commissioner determines that the licensee charged has engaged in conduct or practices in violation of this section, the commissioner shall reduce their findings to writing and shall issue and cause to be served upon the licensee a copy of the findings and an order requiring the licensee to cease and desist from the conduct or practices constituting a violation of this section. As part of the order, the commissioner may suspend a licensee from providing records by electronic transmission if there is a pattern or practice that demonstrates the licensee has failed to comply with the requirements of this section. A licensee may appeal the suspension and resume its electronic transmission of records upon communication from the department that the changes the licensee made to its process or system to comply with the requirements of this section are satisfactory.

(6) Until expiration of the time allowed using the procedure set forth in paragraph (7) for filing a petition for review or until the petition is actually filed, whichever occurs first, the commissioner may modify or set aside any order issued under this section. After expiration of the time allowed under paragraph (7) for filing a petition for review, if no petition has been duly filed, the commissioner may, after notice and opportunity for hearing, alter, modify, or set aside, in whole or in part, any order issued under this section whenever conditions of fact or law warrant that action or if the public interest requires.

(7) A licensee subject to an order of the commissioner under this section or a person whose rights under this section were allegedly violated may obtain a review of an order of the commissioner by filing a petition in a court of competent jurisdiction, within 30 days from the date of the service of the order, pursuant to Section 1094.5 of the Code of Civil Procedure. The court shall have jurisdiction to make and enter a decree modifying, affirming, or reversing any order of the commissioner, in whole or in part.

(8) An order issued by the commissioner under this section shall become final upon either of the following:

(A) Upon the expiration of the time allowed for the filing of a petition for review, if no petition has been duly filed. However, the commissioner may modify or set aside an order to the extent provided in paragraph (6).

(B) Upon a final decision of the court, if the court directs that the order of the commissioner be affirmed or the petition for review dismissed.

(9) An order of the commissioner under this section or order of a court to enforce the order of the commissioner shall not in any way relieve or absolve a person or licensee affected by that order from liability under any law of this state.

(10) A licensee who violates a cease and desist order of the commissioner under this section may, after notice and hearing and upon order of the commissioner, be subject to one of the following penalties at the discretion of the commissioner:

(A) A civil penalty of not more than ten thousand dollars ($10,000) for each violation, except that the total civil penalty for violations of this section in a single investigation shall not exceed two hundred fifty thousand dollars ($250,000).

(B) A civil penalty of not more than two hundred fifty thousand dollars ($250,000) if the commissioner finds that violations have occurred with such frequency as to constitute a general business practice.

(C) Suspension or revocation of a licensee’s license if the licensee knew or reasonably should have known it was in violation of the cease and desist order.

history: (History: Amended (as amended by Stats. 2017, Ch. 561, Sec. 137) by Stats. 2019, Ch. 235, Sec. 4. (AB 1065) Effective January 1, 2020.)


citation: INS § 38.8

text: Insurers shall maintain a system for electronically confirming a policyholder’s decision to opt in to an agreement to conduct transactions electronically and a system that will allow the policyholder to electronically opt out of the agreement to conduct business electronically as specified in subdivision (c) of Section 1633.5. The insurer shall maintain the electronic records for the same amount of time the insurer would be required to maintain those records if the records were in written form.

history: (History: Added by Stats. 2009, Ch. 433, Sec. 3. Effective January 1, 2010.)


citation: INS § 39

text: If any provision of this code, or the application thereof to any person or circumstance, is held invalid, the remainder of the code, or the application of such provision to other persons or circumstances, shall not be affected thereby.

history: (History: Enacted by Stats. 1935, Ch. 145.)


citation: INS § 40

text: The existence of insurers formed prior to the date this code takes effect shall not be affected by the enactment of this code nor by any repeal of the laws under which they were formed, but such insurers shall thereafter operate under the provisions of this code.


citation: INS § 41

text: All insurance in this State is governed by the provisions of this code.


citation: INS § 42

text: The designation of insurance coverage as “group” in any code or law of this state other than this code does not authorize its representation as a group coverage or as a group policy, certificate, or contract by any person licensed or certificated by the commissioner unless the policy providing the coverage is defined as group insurance by a specific provision of this code or of the laws of the state in which the policy, certificate, or contract is issued. This section shall apply only to life, disability, and workers’ compensation insurance.

history: (History: Amended by Stats. 2018, Ch. 231, Sec. 1. (AB 2045) Effective January 1, 2019.)


citation: INS § 44

text: Any person who willfully and knowingly makes, circulates, or transmits to another any false written or printed statement for the purpose of damaging the financial condition or stability of any insurance company doing business in this state is guilty of a misdemeanor punishable by a fine of not more than one thousand dollars ($1,000).

history: (History: Added by Stats. 1969, Ch. 839.)


citation: INS § 45

text:
(a) “Electronic funds transfer” means any transfer of funds, other than a transaction originated by check, draft, or similar paper instrument, that is initiated through an electronic terminal, telephonic instrument, or computer or magnetic tape, so as to order, instruct, or authorize a financial institution to debit or credit an account. Electronic funds transfer shall be accomplished by an automated clearinghouse debit, an automated clearinghouse credit, a Federal Reserve Wire Transfer (Fedwire), or an international funds transfer, at the option of the insurer.

(b) For purposes of this section:

(1) “Automated clearinghouse” means any federal reserve bank, or an organization established by agreement with the National Automated Clearing House Association, that operates as a clearinghouse for transmitting or receiving entries between banks or bank accounts and that authorizes an electronic transfer of funds between those banks or bank accounts.

(2) “Automated clearinghouse debit” means a transaction in which any department of the state, through its designated depository bank, originates an automated clearinghouse transaction debiting the taxpayer’s bank account and crediting the state’s bank account for the amount of tax. Banking costs incurred for the automated clearinghouse debit transaction by the taxpayer shall be paid by the state.

(3) “Automated clearinghouse credit” means an automated clearinghouse transaction in which the taxpayer, through its own bank, originates an entry crediting the state’s bank account and debiting its own bank account. Banking costs incurred by the state for the automated clearinghouse credit transaction may be charged to the taxpayer.

(4) “Fedwire” means any transaction originated by the taxpayer and utilizing the national electronic payment system to transfer funds through federal reserve banks, pursuant to which the taxpayer debits its own bank account and credits the state’s bank account. Electronic funds transfers may be made by Fedwire only if prior approval is obtained from the department and the taxpayer is unable, for reasonable cause, to make payments pursuant to paragraph (2) or (3). Banking costs charged to the taxpayer and to the state may be charged to the taxpayer.

(5) “International funds transfer” means any transaction originated by the taxpayer and utilizing “SWIFT,” the international electronic payment system to transfer funds in which the taxpayer debits its own bank account, and credits the funds to a United States bank that credits the state’s bank account. Banking costs charged to the taxpayer and to the state may be charged to the taxpayer.

history: (History: Added by Stats. 1993, Ch. 661, Sec. 1. Effective January 1, 1994.)


citation: INS § 46

text: The Legislature hereby declares its intent that the term “workmen’s compensation” shall hereafter also be known as “workers’ compensation.” In furtherance of this policy it is the desire of the Legislature that references to the term “workmen’s compensation” in this code be changed to “workers’ compensation” when such code sections are being amended for any purpose. This act is declaratory and not amendatory of existing law.

history: (History: Added by Stats. 1974, Ch. 1454.)


citation: INS § 47

text: “Surplus line broker” means a person licensed under Section 1765 and authorized to do business under Chapter 6 (commencing with Section 1760) of Part 2 of Division 1.

history: (History: Added by Stats. 1998, Ch. 269, Sec. 1. Effective January 1, 1999.)


citation: INS § 48

text: A “surplus line broker certificate” means a certificate issued by a surplus line broker to an insurance purchaser as evidence of the placement of insurance with an eligible nonadmitted insurer in accordance with the requirements of Sections 1764, 1764.1, and 1764.2.

history: (History: Added by Stats. 1999, Ch. 255, Sec. 1. Effective January 1, 2000.)


citation: INS § 100

text:
Insurance in this state is divided into the following classes:

(1) Life.

(2) Fire.

(3) Marine.

(4) Title.

(5) Surety.

(6) Disability.

(7) Plate glass.

(8) Liability.

(9) Workers’ compensation.

(10) Common carrier liability.

(11) Boiler and machinery.

(12) Burglary.

(13) Credit.

(14) Sprinkler.

(15) Team and vehicle.

(16) Automobile.

(17) [Reserved]

(18) Aircraft.

(19) Mortgage guaranty.

(19.5) Insolvency.

(19.6) Legal insurance.

(20) Miscellaneous.

history: (History: Amended by Stats. 2012, Ch. 786, Sec. 3. (AB 2303) Effective January 1, 2013.)

division: 1. GENERAL RULES GOVERNING INSURANCE

part: 1. THE CONTRACT

chapter: 1. Classes of Insurance

path: 1. GENERAL RULES GOVERNING INSURANCE > 1. THE CONTRACT > 1. Classes of Insurance


citation: INS § 101

text: Life insurance includes insurance upon the lives of persons or appertaining thereto, and the granting, purchasing, or disposing of annuities.


citation: INS § 102

text:
Fire insurance includes:

(a) Insurance against loss by fire, lightning, windstorm, tornado, or earthquake.

(b) Insurance against loss of, or destruction of, or damage to, any of the following property, when such insurance includes loss thereof by fire 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:

1. 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, resulting from any cause, but excluding any article constituting stock in trade or used as a sample or sold or held for sale.

2. Moneys, stamps, coins, bullion, securities, notes, drafts, acceptances or instruments of like kind or character, resulting from any cause, except:

(i) Forgery.

(ii) Any dishonest, fraudulent or criminal act of any officer, employee, partner, director, trustee or authorized representative of the insured.

(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.

The provisions of Section 2070 shall not apply to insurance written pursuant to subdivisions (b) or (c).

history: (History: Amended by Stats. 1947, Ch. 630.)


citation: INS § 103

text:
Marine insurance includes insurance against any and all kinds of loss of or damage to:

(a) Vessels, craft, aircraft, cars, automobiles and vehicles of every kind (excluding aircraft and automobiles operating under their own power or while in storage not incidental to transportation), as well as all goods, freights, cargoes, merchandise, effects, disbursements, profits, money, bullion, securities, choses in action, evidences of debt, valuable papers, bottomry and respondentia interests and all other kinds of property, and interests therein, in respect to, appertaining to or in connection with any and all risks or perils of navigation, transit, or transportation, including war risks, on or under any seas or other waters, on land or in the air, or while being assembled, packed, crated, baled, compressed or similarly prepared for shipment or while awaiting the same, or during any delays, storage, transshipment, or reshipment incident thereto including marine builder’s risks, and all personal property floater risks.

(b) Person or to property in connection with or appertaining to a marine, inland marine, transit or transportation insurance including liability for loss of or damage arising out of or in connection with the construction, repair, maintenance or use of the subject matter of such insurance (but not including life insurance or surety bonds); but except as herein specified, shall not mean insurances against loss by reason of bodily injury to the person. Inland marine insurance shall be deemed to include hull insurance on water pleasure craft not used for commercial purposes of a size and type to be determined by the commissioner.

(c) Precious stones, jewels, jewelry, gold, silver and other precious metals, whether used in business or trade or otherwise and whether the same be in course of transportation or otherwise.

history: (History: Amended by Stats. 1971, Ch. 946.)


citation: INS § 104

text:
Title insurance means insuring, guaranteeing or indemnifying owners of real or personal property or the holders of liens or encumbrances thereon or others interested therein against loss or damage suffered by reason of:

(a) Liens or encumbrances on, or defects in the title to said property;

(b) Invalidity or unenforceability of any liens or encumbrances thereon; or

(c) Incorrectness of searches relating to the title to real or personal property.

history: (History: Repealed and added by Stats. 1973, Ch. 1130.)


citation: INS § 105

text:
Surety insurance includes:

(a) The guaranteeing of behavior of persons and the guaranteeing of performance of contracts (including executing or guaranteeing bonds and undertakings required or permitted in all actions or proceedings or by law allowed), other than insurance policies and other than for payments secured by a mortgage, deed of trust, or other instrument constituting a lien or charge on real estate.

(b) Insurance against loss resulting from the forgery or alteration of any instrument of any kind or character or of any signature thereon. Nothing in this section shall be deemed to limit any of the powers of title insurers.

(c) Any of the following insurance when included as a part of contract containing any such guarantee of behavior or performance or in a contract indemnifying any bank, banker, broker, financial or moneyed corporation or association, any state, political subdivision, public or municipal corporation, or any officer of any state, political subdivision, public or municipal corporation: Insurance indemnifying the insured named therein against loss or destruction from any cause of any evidences of debt of any kind or character, evidences of ownership of any kind or character, deeds, mortgages, warehouse receipts, bills of lading, certificates of stock, bonds, notes, drafts, checks, instruments of similar character, stamps, documents, money, precious metals of any kind or character, refined or unrefined, and articles made therefrom, jewelry, watches, necklaces, bracelets, gems and precious and semiprecious stones, and also against loss or damage, except by fire, to the insured’s premises, furnishings, fixtures, equipment, safes and vaults therein caused by burglary, robbery, holdup, theft or larceny or attempt thereat. No such insurance indemnifying against loss of any property as specified herein shall indemnify against loss of any such property occurring while in the mail or in the exclusive custody or possession of a common carrier for the purpose of transportation, except for the purpose of transportation by an armored motor vehicle.

(d) No insurance may be written as surety insurance if it falls within the definition of financial guaranty insurance as set forth in Section 12100.

history: (History: Amended by Stats. 1990, Ch. 1032, Sec. 1.)


citation: INS § 106

text:
(a) Disability insurance includes insurance appertaining to injury, disablement or death resulting to the insured from accidents, and appertaining to disablements resulting to the insured from sickness.

(b) In statutes that become effective on or after January 1, 2002, the term “health insurance” for purposes of this code shall mean an individual or group disability insurance policy that provides coverage for hospital, medical, or surgical benefits. The term “health insurance” shall not include any of the following kinds of insurance:

(1) Accidental death and accidental death and dismemberment.

(2) Disability insurance, including hospital indemnity, accident only, and specified disease insurance that pays benefits on a fixed benefit, cash payment only basis.

(3) Credit disability, as defined in subdivision (2) of Section 779.2.

(4) Coverage issued as a supplement to liability insurance.

(5) Disability income, as defined in subdivision (c) of Section 799.01.

(6) Insurance under which benefits are payable with or without regard to fault and that is statutorily required to be contained in any liability insurance policy or equivalent self-insurance.

(7) Insurance arising out of a workers’ compensation or similar law.

(8) Long-term care.

(c) In a statute that becomes effective on or after January 1, 2008, the term “specialized health insurance policy” as used in this code shall mean a policy of health insurance for covered benefits in a single specialized area of health care, including dental-only, vision-only, and behavioral health-only policies.

history: (History: Amended by Stats. 2022, Ch. 424, Sec. 1. (SB 1242) Effective January 1, 2023.)


citation: INS § 107

text: Plate glass insurance includes insurance against breakage of glass.


citation: INS § 108

text:
Liability insurance includes:

(a) Insurance against loss resulting from liability for injury, fatal or nonfatal, suffered by any natural person, or resulting from liability for damage to property, or property interests of others but does not include worker’s compensation, common carrier liability, boiler and machinery, or team and vehicle insurance.

(b) (1) With respect to operations or property covered by a policy of liability insurance as defined in subdivision (a), insurance of medical, hospital, surgical and funeral loss or expense of the insured or other persons injured, and in the case of an automobile liability policy disability benefits to the insured or other persons injured and in the event of their death, funeral and accidental death benefits to their dependents, beneficiaries or personal representatives irrespective of legal liability of the insured, when issued with or supplemental to the insurance defined in subdivision (a);

(2) When issued with or supplemental to the insurance defined in subdivision (a), disability insurance covering the insured and members of his household, or other persons who customarily operate any automobile covered by such a policy and who are named in such policy; and such disability insurance may cover against accidental injury, death or dismemberment caused by any or all hazards as defined in such coverage;

(c) Insurance covering injuries sustained by an insured resulting from a tort committed by a third party against which such third party is not himself covered by liability insurance;

(d) Insurance coverage against the legal liability of the insured, and against loss, damage, or expense incident to a claim arising out of the death or injury of any person as the result of negligence or malpractice in rendering professional services by any person who holds a certificate or license issued pursuant to Chapter 5 (commencing with Section 2000) of Division 2 of the Business and Professions Code, a license issued pursuant to the Osteopathic Initiative Act, or license as a community clinic defined in subdivision (a) of Section 1203 of the Health and Safety Code, or a license as a health facility pursuant to Chapter 2 (commencing with Section 1250) of Division 2 of the Health and Safety Code.

(e) The provisions of this code relating to disability insurance do not apply to insurance defined in this section.

history: (History: Amended by Stats. 1976, Ch. 152.)


text: Insurers admitted to transact liability insurance are also deemed to be admitted to transact workers’ compensation insurance for the purpose of covering those persons defined as employees by subdivision (d) of Section 3351 of the Labor Code.

history: (History: Repealed and added by Stats. 1977, Ch. 17.)


citation: INS § 109

text: Workers’ compensation insurance includes insurance against loss from liability imposed by law upon employers to compensate employees and their dependents for injury sustained by the employees arising out of and in the course of the employment, irrespective of negligence or of the fault of either party.

history: (History: Amended by Stats. 2018, Ch. 231, Sec. 2. (AB 2045) Effective January 1, 2019.)


citation: INS § 110

text: Common carrier liability insurance includes insurance against loss resulting from liability of a common carrier for accident or injury, fatal or nonfatal, to any person but does not include liability or workers’ compensation insurance.

history: (History: Amended by Stats. 2018, Ch. 231, Sec. 3. (AB 2045) Effective January 1, 2019.)


citation: INS § 111

text: 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.

history: (History: Enacted by Stats. 1935, Ch. 145.)


citation: INS § 112

text:
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.


citation: INS § 113

text: 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.

history: (History: Amended by Stats. 1990, Ch. 1032, Sec. 2.)


citation: INS § 114

text: 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.


citation: INS § 115

text: 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.


citation: INS § 116

text:
(a) Automobile insurance includes insurance of automobile owners, users, dealers, or others having insurable interests therein, against hazards incident to ownership, maintenance, operation, and use of automobiles, other than loss resulting from accident or physical injury, fatal or nonfatal, to, or death of, any natural person.

(b) Automobile insurance also includes any contract of warranty, or guaranty that promises service, maintenance, parts replacement, repair, money, or any other indemnity in event of loss of or damage to a motor vehicle or a trailer, as defined by Section 630 of the Vehicle Code, or any part thereof from any cause, including loss of or damage to or loss of use of the motor vehicle or trailer by reason of depreciation, deterioration, wear and tear, use, obsolescence, or breakage if made by a warrantor or guarantor who is doing an insurance business.

(c) Automobile insurance also includes any agreement that promises repair or replacement of a motor vehicle, or part thereof, after a mechanical or electrical breakdown, at either no cost or a reduced cost for the agreement holder. However, automobile insurance does not include a vehicle service contract subject to Part 8 (commencing with Section 12800) of Division 2, or an agreement deemed not to be insurance under that part.

(d) The doing or proposing to do any business in substance equivalent to the business described in this section in a manner designed to evade the provisions of this section is the doing of an insurance business.

history: (History: Amended by Stats. 2003, Ch. 439, Sec. 2. Effective January 1, 2004. Operative July 1, 2004, by Sec. 7 of Ch. 439.)


text:
(a) Notwithstanding Section 116, a warranty issued by the warrantor of a vehicle protection product shall constitute an express warranty, as defined in Section 1791.2 of the Civil Code, and shall not constitute automobile insurance if the warrantor complies with all of the following requirements:

(1) The warrantor maintains an insurance policy with an admitted insurer providing coverage for 100 percent of the warrantor’s obligations under the warranty. The insurance policy shall allow the warrantyholder to make a direct claim for payment from the insurer upon the failure of the warrantor to pay any covered claim within 60 days after a complete proof-of-loss has been filed with the party designated in the warranty. In addition, all of the following shall apply:

(A) The warrantor shall file with the commissioner a copy of the insurance policy. At any time, a warrantor may have on file with the commissioner only one active policy from one insurer.

(B) The insurer’s liability under the policy shall not be negated by a failure of the warrantor, for any reason, to report the issuance of a warranty to the insurer or to remit moneys owed to the insurer.

(C) No policy cancellation by an insurer shall be valid unless a notice of the intent to cancel the policy is filed with the commissioner not less than 30 days prior to the effective date of the cancellation, or, in the event that the cancellation is due to fraud, material misrepresentation, or defalcation by the warrantor, not less than 10 days prior to that date.

(D) In the event an insurer cancels a policy that a warrantor has filed with the commissioner, the warrantor shall do either of the following:

(i) File a copy of a new policy with the commissioner, before the termination of the prior policy, providing no lapse in coverage following the termination of the prior policy.

(ii) Discontinue acting as a warrantor as of the termination date of the policy until a new policy becomes effective and is accepted by the commissioner.

(2) The warrantor does not use the words insurance, casualty, surety, mutual, or any other words descriptive of the casualty, insurance, or surety business or deceptively similar to the name or description of any insurance company or casualty or surety company in the vehicle protection product name or warranty or in any advertising or other materials provided to prospective purchasers.

(3) The warranty has been issued to a customer that is insured under a comprehensive vehicle insurance policy for the vehicle covered by the warranty agreement.

(4) The warranty is in writing and provides all of the following:

(A) The benefits are limited to the difference between the actual cash value of the stolen vehicle and the vehicle’s replacement cost, temporary vehicle rental expenses, reimbursement for insurance policy deductible, and registration fees and taxes on a replacement vehicle or a fixed amount for those benefits.

(B) A statement that the warrantyholder shall be entitled to make a direct claim against the insurer covering the obligations of the warranty upon the failure of the warrantor to pay any covered claim within 60 days after a complete proof-of-loss has been filed with the party designated in the warranty.

(C) A disclosure stating clearly the name, address, and telephone number of the insurer covering the obligations of the warrantor.

(D) A toll-free telephone number established and operated by the warrantor for the warrantyholder to call for questions about the warranty or the procedures to file a claim.

(E) A statement that clearly indicates the terms of the warranty, whether new or used cars are eligible for the vehicle protection product, the method for calculating the benefits paid and provided to the warrantyholder, and the procedure for filing a claim under the warranty.

(F) A disclosure in 10-point type or larger that reads as follows: “This agreement is a product warranty and is not insurance. It is not subject to state insurance laws but is subject to state law concerning warranties.”

(G) A disclosure in 10-point type or larger that reads as follows: “To be eligible for this warranty, the warrantyholder must have comprehensive insurance coverage on the vehicle that is protected by the antitheft device.”

(5) The benefit is payable upon the theft of the vehicle, as defined in the warranty, and subject to the satisfaction of the procedural proof of claim requirements of the warranty.

(b) For purposes of this section, the following definitions shall apply:

(1) “Warrantor” means the manufacturer or provider of a vehicle protection product who, under the terms of a vehicle protection product warranty, is the contractual obligor to the purchaser of a vehicle protection product.

(2) (A) “Vehicle protection product” means a vehicle protection device, system, or service that is installed on, or applied to, a vehicle, is designed to deter the theft of a vehicle, and includes a written warranty that provides if the product fails to deter the theft of the vehicle, that the warrantyholder shall be paid specified incidental costs by the warrantor as a result of the failure of the device, system, or service to perform pursuant to the terms of the warranty.

(B) For purposes of this section, “vehicle protection product” shall also include alarm systems, window etch products, body part marking products, steering locks, pedal and ignition locks, fuel and ignition kill switches, and electronic, radio, and satellite tracking devices.

(c) The commissioner may issue a stop order pursuant to Section 12921.8 to a warrantor who is in violation of the requirements of this section.

(d) A warrantor shall have the burden of proving that a claim filed in compliance with the terms and conditions of the warranty is not covered by the warranty. A warrantor shall have the burden of proving that a claim settlement amount fulfills the promises contained in the warranty.

(e) The requirements of this section shall not apply under either of the following conditions:

(1) The warrantor is a manufacturer of motor vehicles, as defined pursuant to Section 672 of the Vehicle Code, or a distributor of motor vehicles, as defined pursuant to Section 296 of the Vehicle Code.

(2) The warranty only provides for the repair or replacement of the vehicle protection product subsequent to a mechanical or electrical breakdown of the vehicle protection product.

(f) Nothing in this section is intended to affect any pending litigation.

history: (History: Added by Stats. 2002, Ch. 749, Sec. 1. Effective January 1, 2003.)


citation: INS § 118

text: Aircraft insurance includes insurance of aircraft owners, users, dealers or others having insurable interests therein, against loss through hazards incident to ownership, maintenance, operation and use of aircraft, other than against loss resulting from accident or physical injury, fatal or nonfatal, to any natural person.


citation: INS § 119

text: Mortgage guaranty insurance includes insurance against financial loss by reason of the nonpayment of principal, interest and other sums agreed to be paid under the terms of any note or bond or other evidence of indebtedness secured by a mortgage, deed of trust, or other instrument constituting a lien or charge on real estate.

history: (History: Added by Stats. 1961, Ch. 719.)


text: Insolvency insurance includes insurance against loss arising from the failure of an insolvent insurer to discharge its obligations under its insurance policies.

history: (History: Added by Stats. 1969, Ch. 1347.)


text:
Legal insurance includes the assumption of a contractual obligation to reimburse the insured against all or a portion of his fees, costs, and expenses related to or arising out of services performed by or under the supervision of an attorney who is an active member of the bar of any jurisdiction or jurisdictions of the United States, in which these legal services are performed.

Legal insurance does not include any of the following:

(a) Retainer contracts made by an individual lawyer or law firm with an individual client with the fee based on an estimate of the nature and the amount of services that will be provided to that specific client, and similar contracts made with a group of clients involved in the same or closely related legal matters (such as class actions);

(b) Plans providing no benefits other than consultation and advice on matters in connection with, or a part of, referral services.

(c) Plans providing limited benefits on simple legal matters on a voluntary and informal basis, not involving a legally binding promise, in the context of an employment or educational or similar relationship; or

(d) Legal services provided by labor unions or employee associations to their members in matters relating to employment or occupation.

(e) Legal service incidental to other insurance coverages.

The foregoing is not intended as an exclusive list of legal services plans or arrangements which do not constitute legal insurance as defined by this section.

history: (History: Added by Stats. 1974, Ch. 1161.)


citation: INS § 120

text: Miscellaneous insurance includes insurance against loss from damage done, directly or indirectly by lightning, windstorm, tornado, earthquake or insurance under an open policy indemnifying the producer of any motion picture, television, theatrical, sport, or similar production, event, or exhibition against loss by reason of the interruption, postponement, or cancellation of such production, event, or exhibition due to death, accidental injury, or sickness preventing performers, directors, or other principals from commencing or continuing their respective performance or duties; and any insurance not included in any of the foregoing classes, and which is a proper subject of insurance.

history: (History: Amended by Stats. 1951, Ch. 566.)


citation: INS § 121

text: Except as otherwise stated, the enumeration in this chapter of the kinds of insurance in a particular class does not limit any such kind to any one of such particular classes, inasmuch as the classification of similar insurance may vary with the subject matter, risk, and connected insurances; but the fact that similar kinds of insurance occur in different classes does not extend or change the scope of any such class.


citation: INS § 122

text:
(a) An insurer admitted for all the classes of insurance defined in Sections 102, 107, 108, 112, and 120 is authorized, in addition to the underwriting powers granted by such classes, to include any and all insurance described in paragraph (b) in a policy which contains fire coverage written on a form complying with either Section 2070 or 2071 and which provides insurance covering only noncommercial risks and covering either residence properties (not more extensive than a four-family dwelling) and appurtenances, or the contents thereof other than merchandise, or both.

(b) Such insurance is any or all insurance against all risks of physical loss of, damage to, or personal liability (except workers’ compensation) for injury to person or damage to property incident to, any or all of the following:

(1) The location described and property covered by the fire insurance policy as described in subdivision (a),

(2) Personal effects,

(3) Boats not over 16 feet in length (including furnishings, equipment, outboard motors, and trailers); provided the physical loss or damage coverage does not exceed five hundred dollars ($500),

(4) Personal property intended primarily for residential or recreational use, (excluding boats except as provided above),

(5) Farm implements or self-propelled vehicles, excluding automobiles and aircraft, and,

(6) Horses, including accouterments and vehicles or implements to be drawn thereby.

history: (History: Amended by Stats. 2018, Ch. 231, Sec. 4. (AB 2045) Effective January 1, 2019.)


citation: INS § 123

text: An insurer admitted to transact liability insurance may extend such insurance on noncommercial or farm risks to include insurance of the legal liability of the insured for damage to property caused by use of “teams” or “vehicles” as the meaning thereof is limited by Section 115.

history: (History: Added by Stats. 1961, Ch. 369.)


citation: INS § 124

text: “Financial guaranty insurance” means that insurance as defined by Section 12100.

history: (History: Added by Stats. 1990, Ch. 1032, Sec. 3.)


text: “Homeowners’ insurance” means insurance covering the risks described in subdivision (a) of Section 675.

history: (History: Added by Stats. 2005, Ch. 447, Sec. 1. Effective January 1, 2006.)


citation: INS § 125

text: This chapter shall be known and may be cited as the California Risk Retention Act of 1991.

history: (History: Amended by Stats. 1991, Ch. 1040, Sec. 3.)

chapter: 1.5. Risk Retention

path: 1. GENERAL RULES GOVERNING INSURANCE > 1. THE CONTRACT > 1.5. Risk Retention


citation: INS § 126

text: The Legislature finds and declares that the provisions of this chapter are for the purpose of providing a means for a bona fide for-profit or nonprofit association or individual business to insure against liability and those obligations imposed by statute.

history: (History: Added by Stats. 1990, Ch. 1521, Sec. 1.)


citation: INS § 127

text: Unless the context otherwise requires, the general provisions hereinafter set forth shall govern the application of this chapter and supersede any other provisions of law in conflict.


citation: INS § 128

text:
The purposes of this chapter are as follows:

(a) To regulate the formation and operation of risk retention groups and purchasing groups in this state formed pursuant to the federal Liability Risk Retention Act of 1986, to the extent permitted by that law.

(b) To promote the formation and operation of risk retention groups and purchasing groups in this state. Californians who are experiencing difficulty in obtaining liability coverage are encouraged to form and operate risk retention and purchasing groups in this state.

(c) To authorize the formation of a risk retention group for directors and officers of corporations, whether for profit or nonprofit, who are engaged in the same line of business with respect to the liability risks faced by those officers and directors within the meaning of the federal Liability Risk Retention Act of 1986.


citation: INS § 130

text:
The following definitions govern this chapter:

(a) “Commissioner” means the Insurance Commissioner of this state or the commissioner, director, or superintendent of insurance of any other state.

(b) “Domicile,” for purposes of determining the state in which a purchasing group is domiciled, means the following:

(1) For a corporation, the state in which the purchasing group is incorporated and registered to do business pursuant to the federal Liability Risk Retention Act (15 U.S.C. Sec. 3901 and following).

(2) For an unincorporated entity, the state of its principal place of business and in which it is registered to do business under the federal Liability Risk Retention Act (15 U.S.C. 3901 and following).

(c) “Hazardous financial condition” means that, based on its present or reasonably anticipated financial condition, a risk retention group is unlikely to be able to do either of the following:

(1) Meet obligations to policyholders with respect to known claims and reasonably anticipated claims.

(2) Pay other obligations in the normal course of business.

(d) “Insurance” means primary insurance, excess insurance, reinsurance, surplus lines insurance, and any other arrangement for shifting and distributing risk that is determined to be insurance under the laws of this state.

(e) (1) “Liability” means legal liability for damages including costs of defense, legal costs and fees, and other claims expenses because of injuries to other persons, damage to their property, or other damage or loss to the other persons resulting from or arising out of any of the following:

(A) Any business, whether profit or nonprofit, trade, product, services, including professional services, premises, or operations.

(B) Any activity of any state or local government, or any agency or political subdivision thereof.

(2) “Liability” includes financial responsibility required by the state for any activity for which an individual is required to obtain a license or certificate to provide a service. For purposes of this subdivision, a state agency has discretion to accept or deny proof of financial responsibility.

(3) “Liability” does not include personal risk liability or an employer’s liability with respect to its employees other than legal liability under the Federal Employers’ Liability Act (45 U.S.C. Sec. 51 et seq.).

(f) “Personal risk liability” means liability for damages because of injury to any person, damage to property, or other loss or damage resulting from any personal, familial, or household responsibilities or activities, rather than from responsibilities or activities referred to in subdivision (f).

(g) “Plan of operation or a feasibility study” with respect to risk retention groups chartered in California includes analysis which presents the expected activities and results of a risk retention group including, at a minimum, all of the following:

(1) Information to demonstrate that its members are engaged in businesses or activities similar or related with respect to the liability to which those members are exposed by virtue of any related, similar, or common business, trade, product, services, premises, or operations.

(2) For each state in which it intends to operate, the coverages, deductibles, coverage limits, rates, and rating classification systems for each line of insurance the group intends to offer.

(3) Historical and expected loss experience of the proposed members and national experience of similar exposures, to the extent that this experience is reasonably available.

(4) Pro forma financial statements and projections.

(5) Appropriate opinions by a qualified, independent casualty actuary, including a determination of minimum premium or participation levels required to commence operations and to prevent a hazardous financial condition.

(6) Identification of management, underwriting and claims procedures, marketing methods, managerial oversight methods, investment policies and reinsurance agreements.

(h) “Public entity” includes the state, the Regents of the University of California, a county, city, district, public authority, public agency, and any other political subdivision or public corporation in the state.

(i) “Purchasing group” means any group which does all of the following:

(1) Has as one of its purposes the purchase of liability insurance on a group basis.

(2) Purchases that insurance only for its group members and only to cover their similar or related liability exposure, as described in paragraph (3).

(3) Is composed of members whose businesses or activities are similar or related with respect to the liability to which members are exposed by virtue of any related, similar, or common business, trade, product, services, premises, or operations.

(4) Is domiciled in any state.

(j) “Risk Retention Administration Account” means an account within the Insurance Fund to be used as a depository of moneys received under this chapter or appropriated by the Legislature for the purpose of administering this chapter.

(k) “Risk retention group” means any corporation, public entity, or other limited liability association formed under the laws of any state, Bermuda, or the Cayman Islands that meets all of the following criteria:

(1) Whose primary activity consists of assuming and spreading all, or any portion, of the liability exposure of its group members.

(2) Which is organized for the primary purpose of conducting the activity described under paragraph (1).

(3) Which is either of the following:

(A) Chartered and licensed as a liability insurance company and authorized to engage in the business of insurance under the laws of any state.

(B) Before January 1, 1985, was chartered or licensed and authorized to engage in the business of insurance under the laws of Bermuda or the Cayman Islands and, before that date, has certified to the insurance commissioner of at least one state that it satisfied the capitalization requirements of that state, except that any group is considered to be a risk retention group only if it has been engaged in business continuously since that date and only for the purpose of continuing to provide insurance to cover product liability or completed operations liability as those terms were defined in the Product Liability Risk Retention Act of 1981 before the date of the enactment of the federal Liability Risk Retention Act of 1986.

(4) Does not exclude any person from membership in the group solely to provide for members of the group a competitive advantage over that person.

(5) Has as its members only persons who comprise the membership of the risk retention group and as its owners only persons who comprise the membership of the risk retention group and who are provided insurance by that group.

(6) Whose members are engaged in businesses or activities similar or related with respect to the liability of which those members are exposed by virtue of any related, similar, or common business trade, product, services, premises, or operations.

(7) Whose activities do not include the provision of insurance other than for the following:

(A) Liability insurance for assuming and spreading all or any portion of the liability of its group members.

(B) Reinsurance with respect to the liability of any other risk retention group or any members of that other group that is engaged in businesses or activities so that the group or member meets the requirement described in paragraph (6) from membership in the risk retention group that provides that reinsurance.

(8) The name of which includes the phrase “risk retention group.”

(l) “State” means any state of the United States or the District of Columbia.

history: (History: Amended by Stats. 1995, Ch. 352, Sec. 1. Effective January 1, 1996.)


citation: INS § 131

text:
(a) An entity seeking to be licensed in this state as a risk retention group shall be organized under the laws of this state and licensed as a liability insurance company pursuant to Article 3 (commencing with Section 699) of Chapter 1 of Part 2.

(b) An entity that has not completed its chartering and licensing as a risk retention group in its domiciliary state is subject to the requirements of Article 8 (commencing with Section 820) of Chapter 1 of Part 2.

(c) In addition to the requirements of Article 3 (commencing with Section 699) of Chapter 1 of Part 2, a risk retention group licensed in this state shall submit to the commissioner a feasibility study or plan of operations and all other documentation required by the federal Liability Risk Retention Act of 1986 (15 U.S.C. Sec. 3901 et seq.) to be submitted by a risk retention group to a nonchartering state.

(d) In addition to the requirements of Article 3 (commencing with Section 699) of Chapter 1 of Part 2, a risk retention group licensed in this state shall comply with all of the following at the time of licensure, and thereafter:

(1) (A) The “board of directors” or “board,” as used in this section, means the governing body of the risk retention group elected by the shareholders or members to establish policy, elect or appoint officers and committees, and make other governing decisions.

(B) “Director,” as used in this section, means a natural person designated in the articles of the risk retention group, or designated, elected, or appointed by any other manner, name, or title to act as a director.

(2) (A) The board of directors of the risk retention group shall have a majority of independent directors. If the risk retention group is a reciprocal risk retention group, the attorney-in-fact shall be required to adhere to the same standards regarding independence of operation and governance as imposed on the risk retention group’s board of directors and subscribers’ advisory committee under these standards, and, to the extent permissible under this state’s laws, service providers of a reciprocal risk retention group shall contract with the risk retention group and not the attorney-in-fact.

(B) No director qualifies as “independent” unless the board of directors affirmatively determines that the director has no “material relationship” with the risk retention group. Each risk retention group shall disclose these determinations to its domestic regulator, at least annually. For this purpose, any person that is a direct or indirect owner of, or subscriber in, the risk retention group, or is an officer, director, or employee, or all three, of an owner and insured, as contemplated by 15 U.S.C. Section 3901(a)(4)(E)(ii) of the federal Liability Risk Retention Act of 1986, is considered to be “independent,” unless some other position of that officer, director, or employee constitutes a “material relationship.”

(C) “Material relationship” of a person with the risk retention group includes, but is not limited to, any of the following:

(i) The receipt in any one 12-month period of compensation or payment of any other item of value by that person, a member of that person’s immediate family, or any business with which that person is affiliated from the risk retention group or a consultant or service provider to the risk retention group that is greater than, or equal to, 5 percent of the risk retention group’s gross written premium for that 12-month period or 2 percent of its surplus, whichever is greater, as measured at the end of any fiscal quarter falling in a 12-month period. The person or immediate family member of that person is not independent until one year after his or her compensation from the risk retention group falls below the threshold.

(ii) A relationship with an auditor as follows: a director or an immediate family member of a director who is affiliated with, or employed in, a professional capacity by a present or former internal or external auditor of the risk retention group is not independent until one year after the end of the affiliation, employment, or auditing relationship.

(iii) A relationship with a related entity as follows: a director or immediate family member of a director who is employed as an executive officer of another company where any of the risk retention group’s present executives serve on that other company’s board of directors is not independent until one year after the end of that service or the employment relationship.

(3) The term of any material service provider contract with the risk retention group shall not exceed five years. Any contract, or its renewal, shall require the approval of the majority of the risk retention group’s independent directors. The risk retention group’s board of directors shall have the right to terminate any service provider, audit, or actuarial contracts at any time for cause after providing adequate notice as defined in the contract. The service provider contract is deemed material if the amount to be paid for that contract is greater than, or equal to, 5 percent of the risk retention group’s annual gross written premium or 2 percent of its surplus, whichever is greater.

(A) For purposes of this standard, “service providers” shall include captive managers, auditors, accountants, actuaries, investment advisers, attorneys, and managing general underwriters or any other party responsible for underwriting, determination of rates, collection of premium, adjusting and settling claims, or the preparation of financial statements. Any reference to “attorneys” does not include defense counsel retained by the risk retention group to defend claims, unless the amount of fees paid to those attorneys are “material” as referenced in this paragraph.

(B) A service provider contract meeting the definition of “material relationship” pursuant to paragraph (2) shall not be entered into unless the risk retention group has notified the commissioner in writing of its intention to enter into the transaction at least 30 days prior thereto, and the commissioner has not disapproved the transaction within that period.

(4) The risk retention group’s board of directors shall adopt a written policy in the plan of operation as approved by the board that requires the board to do all of the following:

(A) Ensure that all owners or insureds, or both, of the risk retention group receive evidence of ownership interest.

(B) Develop a set of governance standards applicable to the risk retention group.

(C) Oversee the evaluation of the risk retention group’s management, including, but not limited to, the performance of the captive manager, managing general underwriter, or other parties responsible for underwriting, determination of rates, collection of premium, adjusting or settling claims, or the preparation of financial statements.

(D) Review and approve the amount to be paid for all material service providers.

(E) Review and approve, at least annually, all of the following:

(i) The risk retention group’s goals and objectives relevant to the compensation of officers and service providers.

(ii) The officers’ and service providers’ performance in light of those goals and objectives.

(iii) The continued engagement of the officers and material service providers.

(5) The risk retention group shall have an audit committee composed of at least three independent board members as defined in paragraph (2). A nonindependent board member may participate in the activities of the audit committee, if invited by the members, but cannot be a member of that committee.

(A) The audit committee shall have a written charter that defines the committee’s purpose, which, at a minimum, shall be to do all of the following:

(i) Assist in board oversight of the integrity of the financial statements, the compliance with legal and regulatory requirements, and the qualifications, independence, and performance of the independent auditor and actuary.

(ii) Discuss the annual audited financial statements and quarterly financial statements with management.

(iii) Discuss the annual audited financial statements with its independent auditor and, if advisable, discuss its quarterly financial statements with its independent auditor.

(iv) Discuss policies with respect to risk assessment and risk management.

(v) Meet separately and periodically, either directly or through a designated representative of the committee, with management and independent auditors.

(vi) Review with the independent auditor any audit problems or difficulties and management’s response.

(vii) Set clear hiring policies of the risk retention group as to the hiring of employees or former employees of the independent auditor.

(viii) Require the external auditor to rotate the lead or coordinating audit partner having primary responsibility for the risk retention group’s audit as well as the audit partner responsible for reviewing that audit, so that neither individual performs audit services for more than five consecutive fiscal years.

(ix) Report regularly to the board of directors.

(B) If an audit committee is not designated by the insurer, the insurer’s entire board of directors shall constitute the audit committee.

(6) The board of directors shall adopt and disclose governance standards by making the information available through electronic means, such as posting the information on the risk retention group’s Internet Web site, or other means, and providing that information to members and insureds upon request. The information shall include all of the following:

(A) A process by which the directors are elected by the owners, insureds, or both.

(B) Director qualification standards.

(C) Director responsibilities.

(D) Director access to management and, as necessary and appropriate, independent advisers.

(E) Director compensation.

(F) Director orientation and continuing education.

(G) The policies and procedures that are followed for management succession.

(H) The policies and procedures that are followed for the annual performance evaluation of the board.

(7) The board of directors shall adopt and disclose a code of business conduct and ethics for directors, officers, and employees and promptly disclose to the board of directors any waivers of the code for directors or executive officers, including all of the following topics:

(A) Conflicts of interest.

(B) Matters covered under the corporate opportunity doctrine under the state of domicile.

(C) Confidentiality.

(D) Fair dealing.

(E) Protection and proper use of risk retention group assets.

(F) Compliance with all applicable laws, rules, and regulations.

(G) Requiring the reporting of any illegal or unethical behavior that affects the operation of the risk retention group.

(8) The captive manager, president, or chief executive officer of the risk retention group shall promptly notify the domestic regulator, in writing, if he or she becomes aware of any material noncompliance with any of these governance standards.

(e) Domestic risk retention groups, licensed as of December 31, 2013, shall be governed by subdivision (d) on and after January 1, 2015.

history: (History: Amended by Stats. 2013, Ch. 321, Sec. 1. (AB 1391) Effective January 1, 2014.)


citation: INS § 132

text:
Risk retention groups chartered, incorporated, or licensed in states other than this state and seeking to do business as a risk retention group in this state shall file a notice of operation with the commissioner of its intention to do business in this state. The notice shall be filed with the commissioner within 60 days of the filing by the group of any notice filed with its chartering state of its intention to do business in this state, but in no event may a notice of intended operation be filed with the commissioner less than 60 days prior to the group commencing business in this state. In doing business in this state the risk retention group shall observe and abide by the laws of this state including the following:

(a) A risk retention group shall submit to the commissioner all of the following:

(1) A statement identifying the state or states in which the risk retention group is chartered and licensed as a liability insurance company, date of chartering, its principal place of business, and other information, including information on its membership, as the commissioner of this state may require to verify that the risk retention group is qualified under subdivision (k) of Section 130.

(2) A copy of its plan of operations or a feasibility study and revisions of the plan or study submitted to the state in which the risk retention group is chartered and licensed. However, the provision relating to the submission of a plan of operation or a feasibility study does not apply with respect to any line or classification of liability insurance that (A) was defined in the Product Liability Risk Retention Act of 1981 before October 27, 1986, and (B) was offered before that date by any risk retention group that had been chartered and operating for not less than three years before that date.

(3) A statement of registration that designates the commissioner as its agent for the purpose of receiving service of legal documents or process.

(4) A registration filing fee of one thousand one hundred ninety-six dollars ($1,196) shall accompany the statement of registration, which shall be deposited in the Risk Retention Administration Account, which is hereby created within the Insurance Fund. Notwithstanding Section 13340 of the Government Code, moneys in the account are continuously appropriated to the department for purposes of this chapter.

(b) Any risk retention group within this state shall submit to the commissioner all of the following:

(1) Upon commencement of business within this state and annually thereafter, a copy of the group’s annual financial statement submitted to the state in which the risk retention group is chartered and licensed, which shall be certified by an independent public accountant and contain a statement of opinion on loss and loss adjustment expense reserves made by a member of the American Academy of Actuaries or a qualified loss reserve specialist.

(2) Upon request by the commissioner, a copy of each examination of the risk retention group as certified by the commissioner or public official conducting the examination and all documentation received as part of the examination.

(3) Upon request by the commissioner, a copy of any outside audit performed with respect to the risk retention group.

(c) (1) As authorized under the federal Liability Risk Retention Act of 1986 (15 U.S.C. Sec. 3902(a)(1)(B)), each risk retention group is liable for the payment of premium taxes and taxes on premiums for business done or located within this state, and shall report to the commissioner the gross premiums written, less returned premiums, on business done within this state. The risk retention group is subject to taxation, and any applicable fines and nonconformance fees related thereto, on the same basis as a foreign admitted insurer. Nonconformance fees shall be paid to the department and deposited in the Risk Retention Administration Account within the Insurance Fund.

(2) To the extent licensed surplus line brokers are utilized pursuant to Chapter 6 (commencing with Section 1760) of Part 2, they shall report to the commissioner the premiums for direct business for risks resident or located within this state that those licensees have placed with or on behalf of, a risk retention group not chartered in this state.

(d) Any risk retention group and its agents and representatives shall comply with Article 6.5 (commencing with Section 790) of Chapter 1 of Part 2.

(e) Any risk retention group shall comply with the laws of this state regarding deceptive, false, or fraudulent acts or practices. However, if the commissioner seeks an injunction regarding that conduct, the injunction shall be obtained from a court of competent jurisdiction.

(f) Any risk retention group shall submit to an examination upon request by the commissioner to determine its financial condition if the commissioner of the jurisdiction in which the group is chartered and licensed has not initiated an examination or does not initiate an examination within 60 days after a request by the commissioner of this state.

(g) Every application form for insurance from a risk retention group and every policy issued by a risk retention group shall contain in 10-point type on the front page and the declaration page, the following notice: “NOTICE This policy is issued by your risk retention group. Your risk retention group may not be subject to all of the insurance laws and regulations of your state. State insurance insolvency guaranty funds are not available for your risk retention group.”

(h) The following acts by a risk retention group are hereby prohibited:

(1) The solicitation or sale of insurance by a risk retention group to any person who is not eligible for membership in that group.

(2) The solicitation or sale of insurance by, or operation of, a risk retention group that is in a hazardous financial condition.

(i) A risk retention group may not offer insurance policy coverage prohibited by Section 533.5 or declared unlawful by the Supreme Court of California.

(j) The risk retention group shall make its initial registration by filing the materials specified in subdivision (a). The initial registration is valid until December 31 of the year in which it was made, as long as the risk retention group is in compliance with this chapter. To maintain the registration in force, the risk retention group shall continue in compliance with this chapter and shall file the following items with the commissioner on or before December 31 of each year:

(1) An annual reporting statement on a form prescribed by the commissioner.

(2) An annual renewal fee to be determined by the commissioner, limited to the actual cost of administering this section, not to exceed three hundred dollars ($300).

(3) Any other information required by the commissioner to determine whether the risk retention group is in compliance with the requirements of this chapter.

(k) The risk retention group shall notify the commissioner in writing of any changes in the information provided according to subdivision (a) within 30 days of the effective date of the change.

history: (History: Amended by Stats. 2017, Ch. 534, Sec. 2. (AB 1699) Effective January 1, 2018.)


citation: INS § 133

text:
(a) No risk retention group shall be required or permitted to join or contribute financially to any insurance insolvency guaranty fund, or similar mechanism, in this state, nor shall any risk retention group, or its insureds or claimants against its insureds, receive any benefit from any such fund for claims arising under the insurance policies issued by that risk retention group.

(b) When a purchasing group obtains insurance covering its members’ risks from an insurer not authorized in this state or a risk retention group, no such risks, wherever located, shall be covered by any insurance guaranty fund or similar mechanism in this state.

(c) When a purchasing group obtains insurance covering its members’ risks from an authorized admitted insurer, only risks located in this state shall be covered by the state insurance guaranty fund.

(d) A risk retention group shall not participate in this state’s joint underwriting associations, California Automobile Assigned Risk Plan, Fair Access to Insurance Requirements Plan, and market assistance plans.


citation: INS § 134

text:
(a) A purchasing group that intends to do business in this state shall, prior to doing business, furnish to the commissioner notice, doing all of the following:

(1) Identify the state in which the group is domiciled.

(2) Specify the lines and classifications of liability insurance that the purchasing group intends to purchase.

(3) Identify the insurance company or companies from which the group intends to purchase its insurance and the domicile of that company.

(4) Specify the method by which, and the person or persons, if any, through whom, insurance will be offered to its members whose risks are resident or located in this state.

(5) Identify the principal place of business of the group.

(6) Provide other information that may be required by the commissioner to verify that the purchasing group is qualified under subdivision (i) of Section 130.

(b) The purchasing group shall register with and designate the commissioner as its agent solely for the purpose of receiving service of legal documents or process, for which a filing fee in the amount of five hundred forty dollars ($540) shall be submitted to the commissioner for deposit in the Risk Retention Administration Account within the Insurance Fund, except that these requirements do not apply in the case of a purchasing group that did all of the following:

(1) Was domiciled before April 1, 1986, and is domiciled on and after October 27, 1986, in any state of the United States.

(2) Before October 27, 1986, purchased insurance from an insurance carrier licensed in any state, and since October 27, 1986, purchased its insurance from an insurance carrier licensed in any state.

(3) Was a purchasing group under the requirements of the Product Liability Risk Retention Act of 1981 (15 U.S.C. Sec. 3901 et seq.) before October 27, 1986.

(4) Does not purchase insurance that was not authorized for purposes of an exemption under that act, as in effect before October 27, 1986.

(c) Any purchasing group that was doing business in this state prior to the enactment of this chapter shall, within 30 days after January 1, 1990, furnish notice to the commissioner pursuant to subdivision (a) and furnish information that may be required pursuant to subdivisions (b) and (c).

(d) Each purchasing group that is required to give notice pursuant to subdivision (a) shall also furnish information that may be required by the commissioner to:

(1) Verify that the entity qualifies as a purchasing group.

(2) Determine where the purchasing group is located.

(3) Determine appropriate tax treatment.

(4) Verify that the purchasing group is in compliance with this chapter.

(e) Any purchasing group that intends to do business in this state shall make its initial registration by submitting to the commissioner the materials listed in subdivision (a). The registration is valid until December 31 of the year in which it was made, as long as the purchasing group is in compliance with this chapter. To maintain the registration, the purchasing group shall continue to comply with this chapter. Additionally, the purchasing group shall file the following documents with the commissioner on or before January 31 of each year:

(1) An annual reporting statement on a form prescribed by the commissioner.

(2) An annual renewal fee, to be determined by the commissioner, limited to the actual cost of administering this section, not to exceed two hundred dollars ($200).

(3) Any other information required by the commissioner to determine whether the purchasing group is in compliance with this chapter or other applicable provisions of this code.

(f) The purchasing group shall notify the commissioner in writing of any changes in the information provided according to subdivision (a) within 30 days of the effective date of the change.

history: (History: Amended by Stats. 2017, Ch. 534, Sec. 3. (AB 1699) Effective January 1, 2018.)


citation: INS § 135

text:
(a) No purchasing group may offer insurance policy coverage prohibited by Section 533.5 or declared invalid by the Supreme Court of California.

(b) A purchasing group which obtains liability insurance from an insurer not admitted in this state or a risk retention group shall inform each of the members of the group which have a risk resident or located in this state all of the following:

(1) The risk is not protected by an insurance insolvency guaranty fund in this state.

(2) The risk retention group or such insurer may not be subject to all insurance laws and regulations of this state.

history: (History: Amended by Stats. 1991, Ch. 1040, Sec. 5.)