text:
A society may grant nonforfeiture benefits, cash surrender values, certificate loans, and other options as its laws may permit.

In the case of certificates issued after September 21, 1952, other than those for which reserves are computed on the Commissioners 1941 Standard Ordinary Mortality Table, the 1941 Standard Industrial Table, the Commissioners 1958 Standard Ordinary Mortality Table, the Commissioners 1980 Standard Ordinary Mortality Table, or any more recent table approved by the commissioner that applies to life insurers, the value of any nonforfeiture benefit granted and the amount of any cash surrender value granted shall not be less than the excess, if any, of (a) over (b) as follows:

(a) The reserve under the certificate determined on the basis specified in the certificate; and

(b) The sum of any indebtedness to the society on the certificate, including interest due and accrued, and a surrender charge of not more than 212 percent of the face amount of the certificate, which, in the case of insurance on the lives of children, shall be the ultimate face amount of the certificate, if death benefits provided therein are graded.

However, in the case of certificates issued on a substandard basis or in the case of certificates, the reserves for which are computed upon the American Men Ultimate Table of Mortality, the term of any extended insurance benefit including accompanying pure endowment, if any, may be computed upon the rates of mortality not greater than 130 percent of those shown by the mortality table specified in the certificate for the computation of the reserve.

In the case of certificates issued after September 21, 1952, for which reserves are computed on the Commissioners 1941 Standard Ordinary Mortality Table, the 1941 Standard Industrial Table, the Commissioners 1958 Standard Ordinary Mortality Table, the Commissioners 1980 Standard Ordinary Mortality Table, or any more recent table approved by the commissioner that applies to life insurers, the value of any nonforfeiture benefit granted and the amount of any cash surrender value granted shall not be less than the corresponding amount ascertained in accordance with the provisions of Sections 10161, 10162, 10163, 10163.1, 10163.2, 10164, 10164.1, and 10165 applicable to life insurance companies.

history: (History: Amended by Stats. 1995, Ch. 166, Sec. 7. Effective January 1, 1996.)

article: 4. Benefits


kind: section

code: INS

text: No beneficiary shall have or obtain any vested interest in the proceeds of any certificate until the certificate has become due and payable in conformity with the provisions of the insurance contract. The owner of a certificate shall have the right at all times to change the beneficiary or beneficiaries in accordance with the constitution, laws, or rules of the society, unless the owner waives this right by specifically requesting in writing that the beneficiary designation be irrevocable. Every society, by its constitution, laws, or rules, may limit the scope of beneficiaries only to the extent required by federal law governing fraternal benefit societies.

history: (History: Amended by Stats. 1995, Ch. 166, Sec. 8. Effective January 1, 1996.)

division: 2. CLASSES OF INSURANCE

part: 2. LIFE AND DISABILITY INSURANCE

chapter: 10. Fraternal Benefit Societies

article: 4. Benefits

path: 2. CLASSES OF INSURANCE > 2. LIFE AND DISABILITY INSURANCE > 10. Fraternal Benefit Societies > 4. Benefits


text: Every society authorized to do business in this State shall issue to each benefit member a certificate specifying the amount of benefits provided thereby. The certificate, together with any riders or endorsements attached thereto, the charter or articles of incorporation, the constitution and laws of the society, the application for membership, and declaration of insurability, if any, signed by the applicant, and all amendments to each thereof, shall constitute the entire agreement between the society and the member, and the certificate shall so state. A copy of the application for membership and of the declaration of insurability, if any, shall be endorsed upon or attached to the certificate.

history: (History: Repealed and added by Stats. 1951, Ch. 1193.)

article: 5. Contract

path: 2. CLASSES OF INSURANCE > 2. LIFE AND DISABILITY INSURANCE > 10. Fraternal Benefit Societies > 5. Contract


text: All statements purporting to be made by the member shall, in the absence of fraud, be representations and not warranties. Any waiver of this provision shall be void.

article: 5. Contract


text: Any changes, additions or amendments to the charter or articles of incorporation, constitution or laws duly made or enacted subsequent to the issuance of the certificate, shall bind the member and the beneficiaries, and shall govern and control the agreement in all respects the same as though such changes, additions or amendments had been made prior to and were in force at the time of the application for membership, but no such changes, additions or amendments shall have the effect of terminating or reducing the benefit or benefits payable under any certificate in force at the time such changes, additions or amendments become effective.

article: 5. Contract


text: Copies of any of the documents mentioned in Sections 11060 and 11062, certified by the secretary or corresponding officer of the society, shall be received in evidence of the terms and conditions thereof.

article: 5. Contract


text: A society shall provide specifically in its certificates that if its reserves become impaired, its board of directors or corresponding body may require that the owner pay to the society the amount of the owner’s equitable proportion of the deficiency as ascertained by its board, and that if the payment be not made it shall stand as an indebtedness against the certificate and draw interest not to exceed the rate specified for certificate loans under the certificate, or if none is specified, 6 percent per annum compounded annually.

history: (History: Amended by Stats. 1995, Ch. 166, Sec. 9. Effective January 1, 1996.)

article: 5. Contract


text: Every society authorized to do business in this State shall provide in its constitution or laws that additional payments or contributions shall be required of members by the action of the board of directors or corresponding body of the society whenever they deem it necessary or proper to effectuate the carrying on of the insurance business of the society.

article: 5. Contract


text:
After the effective date of the amendments to this section made during the 1995–96 Regular Session of the Legislature, no life insurance benefit certificate may be delivered or issued for delivery in this state unless a copy of the form, the application therefor, and any attached endorsements or riders have been filed with the commissioner in the same manner as policies, contracts, or certificates of life insurance issued by stock or mutual insurers. The certificate shall have a title clearly and correctly describing its form on the face and filing back and shall contain in substance the standard provisions listed below. However, the commissioner may approve any form that in his or her opinion contains provisions relating to any one or more of the following requirements that are more favorable to insured members than the one or ones required here.

(a) A provision stating the amount of premiums that are payable under the certificate, and a provision that the certificate holder shall be obligated to pay, as a condition of the continuance in force of the certificate, additional premiums imposed in accordance with the constitution or laws of the society then in force or thereafter lawfully enacted.

(b) A provision that the certificate holder is entitled to a grace of not less than a full month (or 30 days at the option of the society) in which the payment of any premium, after the first, may be made, and that during the grace period, the certificate shall continue in full force. However, the certificate may provide that in case a loss occurs during the grace period before the overdue premium is paid, the amount of the overdue premium or premiums may be deducted in any settlement under the certificate.

(c) A provision that the certificate holder shall be entitled to have the certificate reinstated at any time within three years from the date of default in payment of premiums, unless the certificate has been completely terminated through the application of a nonforfeiture benefit, upon the production of evidence of insurability and good health satisfactory to the society and the payment of all overdue premiums and any other indebtedness to the society upon the certificate, together with interest on the premiums and indebtedness, if any, at a rate not exceeding 6 percent per annum compounded annually. However, a society may provide for a minimum interest payment of not exceeding ten cents ($0.10) for each month’s premium in arrears at the date of reinstatement, if the premiums do not exceed 12 in number.

(d) A provision that, in the event of default in payment of any premium after three full years’ premiums have been paid, or after premiums for a lesser period have been paid if the contract so provides, the society will grant, upon proper request not later than 60 days after the due date of the premium in default, a nonforfeiture benefit on the plan stipulated in the certificate, effective as of the due date, of the value as specified in this chapter. This subdivision does not apply to pure endowment, annuity or reversionary annuity contracts, or term certificates of uniform amount, or renewal thereof, of 15 years or less expiring before age 66, for which uniform premiums are payable during the entire term of the certificate, or term certificates of decreasing amount on which the granting of a nonforfeiture benefit is not required in order to comply with the minimum values specified in this chapter.

(e) A provision that one nonforfeiture benefit, as specified in the certificate, in accordance with the requirements of subdivision (d) above, shall become effective automatically unless the member elects another available nonforfeiture benefit or, if society makes available a cash surrender value, the cash surrender value, not later than 60 days after the due date of the premium in default.

(f) A statement of the mortality table and rate of interest used in determining all nonforfeiture benefits and cash surrender values available under the certificate. After September 21, 1954, a brief general statement of the method used in calculating the benefits and values available under the certificate on any certificate anniversary beyond the last anniversary for which the benefits and values are consecutively shown in the certificate. The statement shall be accompanied by an explanation of the manner in which the benefits and values are altered by the existence of paid-up additions credited to the certificate or by any indebtedness to the society on the certificate.

(g) A table showing in figures every nonforfeiture benefit and cash surrender value available under the certificate for each certificate anniversary either during the first 20 certificate years or during the term of the certificate, whichever is shorter, the benefits and values to be calculated upon the assumption that there are no dividends or paid-up additions credited to the certificate and that there is no indebtedness to the society on account of or secured by the certificate.

(h) A provision that the certificate shall be incontestable after it has been in force during the lifetime of the insured for a period of two years from its date of issue except for nonpayment of premiums, risks limited or not assumed, violation of the provisions of the certificate relating to military, aviation, or naval service, or violation of the provisions relating to suspension or expulsion as substantially set forth in the certificate. At the option of the society, supplemental provisions relating to benefits in the event of temporary or permanent disability or hospitalization and provisions that grant additional insurance specifically against death by accident or accidental means, may also be excepted. The certificate shall be incontestable on the ground of suicide after it has been in force during the lifetime of the insured for a period of two years from date of issue. The certificate may provide, as to statements made to procure reinstatement, that the society has the right to contest a reinstated certificate within a period of two years from date of reinstatement with the same exceptions as provided here.

(i) A provision that if it shall be found at any time before final settlement under the certificate that the age or sex of the insured (or the age or sex of any other person, if considered in determining the premium) has been misstated, and the discrepancy and the premium payment involved have not been adjusted, the amount payable under the certificate shall be such as the premium would have purchased at the correct age and sex. However, if the correct age was not an insurable age under the society’s charter, constitution, or bylaws, only the premiums paid to the society, less any payments previously made to the member, shall be returned. Alternatively, at the option of the society, the amount payable under the certificate shall be that which the premiums would have purchased at the correct age and sex according to the society’s promulgated rates and any extension thereof based upon actuarial principles.

(j) A provision or provisions that recite fully, or that set forth the substance of, all sections of the charter, constitution, laws, rules or regulations of the society, in force at the time of issuance of the certificate, the violation of which will result in the termination of, or in the reduction of, the benefit or benefits payable under the certificate.

Any of the foregoing provisions or portions thereof not applicable by reason of the plan of insurance may, to the extent inapplicable, be omitted from the certificate. The word “premiums” as used in this section means premiums, rates, or other required contributions by whatever name known.

history: (History: Amended by Stats. 1995, Ch. 166, Sec. 10. Effective January 1, 1996.)

article: 5. Contract


text:
After September 21, 1952, no life insurance benefit certificate shall be delivered or issued for delivery in this State containing in substance any of the following provisions:

(a) Any provision limiting the time within which any action at law or in equity may be commenced to less than 18 months after the cause of action shall accrue.

(b) Any provision by which the certificate shall purport to be issued or take effect more than six months before the original application for the certificate was made, except in case of transfer from one form of certificate to another in connection with which the member is to receive credit for any reserve accumulation under the form of certificate from which the transfer is made.

(c) Any provision for forfeiture of the certificate for failure to repay any loan thereon or to pay interest on such loan while the total indebtedness, including interest, is less than the loan value of the certificate.

(d) Any provision whereby the suspension or expulsion of the member, or change of occupation, or any other violation of the terms and conditions of the contract shall result in the loss or reduction of the cash surrender value or other withdrawal equity, if any, available by the terms of such certificate.

article: 5. Contract


text: After September 21, 1954, no life insurance benefit certificate shall be delivered or issued for delivery in this State containing in substance any provision limiting the time within which any action at law or in equity may be commenced to less than two years after the cause of action shall accrue.

article: 5. Contract


text: No domestic, foreign or alien society authorized to do business in this State shall issue or deliver in this State any certificate or other evidence of any contract for temporary or permanent disability benefits as a result of disease or accident, or for hospital, medical or nursing benefits, unless and until the form thereof, together with the form of application and all riders or endorsements for use in connection therewith, shall have been filed with the commissioner and approved by him as conforming to reasonable rules and regulations from time to time made by him and as not inconsistent with any other provisions of law applicable thereto. The commissioner shall, within a reasonable time after the filing of any such form, notify the society filing the same either of his approval or of his disapproval of such form. The commissioner may approve any such form which in his opinion contains provisions on any one or more of the several requirements made by him which are more favorable to the insured members than the one or ones so required. The action of the commissioner in disapproving any such form shall be subject to judicial review. Pursuant to the foregoing provisions, the commissioner shall have power, from time to time, to make, alter and supersede reasonable regulations prescribing the required, optional and prohibited provisions in such contracts, and such regulations shall conform, as far as practicable, to the provisions of this code relating to similar contracts issued by other insurers. Where the commissioner deems inapplicable, either in part or in their entirety, the provisions of this code relating to similar contracts issued by other insurers, he may prescribe the portions or summary thereof of the contract to be printed on the certificate issued to the member. All rules and regulations made, altered or superseded by the commissioner pursuant to the authority granted in this section shall be in accordance with Chapter 4 of Part 1, Division 3, Title 2 of the Government Code.

history: (History: Amended by Stats. 1953, Ch. 46.)

article: 5. Contract


text: After September 21, 1954, no action at law or in equity shall be had or maintained on any certificate or contract issued by a society unless commenced within two years after the cause of action shall accrue.

article: 5. Contract


text: The constitution and laws of the society may provide that no subordinate body, nor any of its subordinate officers or members shall have the power or authority to waive any of the provisions of the laws and constitution of the society. Such provision shall be binding on the society and every member and beneficiary of a member.

article: 5. Contract


text: A domestic society may, by a reinsurance agreement, cede any individual risk or risks in whole or in part to an insurer having the power to make such reinsurance and authorized to do business in this State, or if not so authorized, one which is approved by the commissioner; but no such society may reinsure substantially all of its insurance in force without the written permission of the commissioner. It may take credit for the reserves on such ceded risks to the extent reinsured, but no credit shall be allowed as an admitted asset or as a deduction from liability, to a ceding society for reinsurance made, ceded, renewed, or otherwise becoming effective after the effective date of this chapter, unless the reinsurance is payable by the assuming insurer on the basis of the liability of the ceding society under the contract or contracts reinsured without diminution because of the insolvency of the ceding society.

article: 5. Contract


text: If the contract of a society entered into, amended, or renewed in this state on or after the effective date of this section provides in any manner for coverage for an employee and a covered spouse dependent upon such employee, the contract shall not provide for coverage under conditions less favorable for employees than coverage provided for covered spouses dependent upon the employees.

history: (History: Added by Stats. 1976, Ch. 59.)

article: 5. Contract


text: Subject to the annual fee provisions as provided herein, every certificate of authority issued to a fraternal benefit society shall be for an indefinite term and shall expire with the expiration or termination of the corporate existence of the holder thereof unless sooner revoked by the commissioner. The commissioner shall require the payment of seven thousand fifty-five dollars ($7,055), in advance, as a fee for filing an application for each original certificate of authority authorizing any fraternal benefit society to transact insurance in this state. Each society possessing a certificate of authority of indefinite term shall owe and pay an annual fee of four hundred twenty-four dollars ($424), in advance, on account of that certificate until its final expiration or revocation. That fee shall be for annual periods commencing on July 1 of each year, and ending on June 30 of each year, and shall be due on each March 1 and shall be delinquent on and after each April 1. A duly certified copy or duplicate of the certificate of authority shall be prima facie evidence that the holder is a fraternal benefit society within the meaning of this chapter.

history: (History: Amended by Stats. 2017, Ch. 534, Sec. 66. (AB 1699) Effective January 1, 2018.)

article: 6. Powers of Commissioner

path: 2. CLASSES OF INSURANCE > 2. LIFE AND DISABILITY INSURANCE > 10. Fraternal Benefit Societies > 6. Powers of Commissioner


text:
No foreign or alien society shall transact business in this State without a certificate of authority issued by the commissioner. Any such society may receive a certificate of authority to transact business in this State upon a showing that its assets are invested in accordance with the provisions of this chapter and filing with the commissioner:

(a) A duly certified copy of its charter or articles of incorporation;

(b) A copy of its constitution and laws, certified by its secretary or corresponding officer;

(c) A power of attorney to the commissioner as prescribed in Section 11104;

(d) A statement of its business under oath of its president and secretary or corresponding officers in a form prescribed by the commissioner, duly verified by an examination made by the supervising insurance official of its home state or other state satisfactory to the commissioner;

(e) A valuation report prepared and executed in accordance with Section 11133 of this chapter;

(f) A certificate from the proper official of its home state, territory, province or country that the society is legally incorporated and licensed to transact business therein;

(g) Copies of its certificate forms;

(h) Such other information as the commissioner may deem necessary to a proper exhibit of its plan of operation; and

(i) Payment of the fee specified in Section 11090.

Any foreign or alien society desiring admission to this State shall have the qualifications required of domestic societies organized under this chapter.

If the commissioner refuses to issue such license, he shall reduce his refusal to writing, file the same in his office and furnish a copy thereof, together with a statement of his reason therefor, to the secretary or corresponding officer of the society.

article: 6. Powers of Commissioner


text:
The commissioner shall act as prescribed in Section 11093 when upon investigation he finds that a domestic society:

(a) Has exceeded its power;

(b) Has failed to comply with any provision of this chapter;

(c) Is not fulfilling its contracts in good faith;

(d) Has a membership of less than 400 after an existence of one year; or

(e) Is transacting business fraudulently or in a manner hazardous to its members, creditors, the public or the business.

article: 6. Powers of Commissioner


text:
(a) If the commissioner finds that any of the conditions set forth in Section 11092 exist in respect to a domestic society, he or she shall, in an order to show cause, notify the society of his or her findings and wherein those conditions exist and shall set a date after a reasonable period of time on which it shall show cause why it should not be enjoined from carrying on any business until the overt act or violation complained of shall have been corrected, or why an action in quo warranto should not be commenced against the society.

(b) If on such date the society does not present good and sufficient reason why it should not be so enjoined or why such action should not be commenced, the commissioner may present the facts relating thereto to the Attorney General who shall, if he or she deems the circumstances warrant, commence an action to enjoin the society from transacting business or in quo warranto.

(c) The court shall thereupon notify the society of a hearing. If after a full hearing it appears that the society should be so enjoined or liquidated or a receiver appointed, the court shall enter the necessary order.

history: (History: Amended by Stats. 2011, Ch. 426, Sec. 8. (SB 712) Effective January 1, 2012.)

article: 6. Powers of Commissioner


text:
If the court orders the society enjoined, the commissioner shall suspend its certificate of authority. Thereafter such society shall have no authority to do business in this State until:

(a) The commissioner finds that the overt act or violation complained of has been corrected;

(b) The costs of such action, if any, have been paid by the society;

(c) The court has dissolved its injunction; and

(d) The commissioner has reinstated the certificate of authority.

article: 6. Powers of Commissioner


text: If the court orders the society liquidated, it shall be enjoined from carrying on any further business, whereupon the receiver of the society shall proceed at once to take possession of the books, papers, money and other assets of the society and, under the direction of the court, proceed forthwith to close the affairs of the society and to distribute its funds to those entitled thereto.

history: (History: Added by Stats. 1951, Ch. 1193.)

article: 6. Powers of Commissioner


text: The provisions of Sections 11093 to 11095 relating to hearing by the commissioner, action by the Attorney General at the request of the commissioner, hearing by the court, injunction and receivership shall be applicable to a society which shall voluntarily determine to discontinue business.

article: 6. Powers of Commissioner


text:
The commissioner shall act as prescribed in Section 11098 when upon investigation he finds that a foreign or alien society transacting or applying to transact business in this State:

(a) Has exceeded its powers;

(b) Has failed to comply with any provisions of this chapter;

(c) Is not fulfilling its contracts in good faith; or

(d) Is conducting its business fraudulently or in a manner hazardous to its members or creditors or the public.

article: 6. Powers of Commissioner


text: If the commissioner finds that any of the conditions set forth in Section 11097 exist in respect to a foreign or alien society, he shall, in an order to show cause, notify the society of his findings wherein such conditions exist and shall set a date after a reasonable period of time on which it shall show cause why its certificate of authority should not be suspended, revoked or refused. If on such date the society does not present good and sufficient reason why its authority to do business in this State should not be suspended, revoked or refused, he may suspend or refuse the certificate of authority of the society to do business in this State until satisfactory evidence is furnished to him that such suspension or refusal should be withdrawn or he may revoke the authority of the society to do business in this State. Nothing contained in this section shall be taken or construed as preventing any such society from continuing in good faith all contracts made in this State during the time it was legally authorized to transact business herein.

article: 6. Powers of Commissioner


text: Article 14 (commencing with Section 1010) of Chapter 1 of Part 2 of Division 1 applies to any society, except as otherwise provided in this chapter.

history: (History: Amended by Stats. 1982, Ch. 454, Sec. 109.)

article: 6. Powers of Commissioner


text: Every society operating under the provisions of this chapter and issuing a policy or certificate of insurance may appoint agents to represent it.

article: 6. Powers of Commissioner


text: Except as otherwise provided in Sections 11102 and 11103, such agents and such societies are subject to Chapter 5 (commencing with Section 1621) of Part 2 of Division 1 and those agents shall be licensed as life agents. Those agents are also subject to Sections 750, 751, and 760.5, and the terms “insurance agent” and “life agent” as used in those sections include the agents of those societies.

history: (History: Amended by Stats. 1982, Ch. 454, Sec. 110.)

article: 6. Powers of Commissioner


text:
Chapter 5 (commencing with Section 1621) of Part 2 of Division 1 does not apply to any of the following, nor shall any of the following be required to be licensed as life agents:

(a) Any officer of a local lodge of a society, while acting as such, if that officer (1) does not effect insurance, (2) solicits or negotiates only as a part of, and in connection with, the business of a fraternal agent licensed in accordance with the provisions of Section 11101, and (3) is not remunerated on a commission basis.

(b) Any member of a society who does not effect insurance and whose solicitation or negotiation is incidental to the securing of new members for the society and whose only remuneration therefor consists of prizes in the form of merchandise or payments of a nominal amount. This subdivision does not exempt from the provisions of Chapter 5 nor from the license requirement of Section 11101 any person remunerated on a regular salary or commission basis or employed either full or part time for the purpose of soliciting or negotiating fraternal benefit insurance.

(c) Any person directly employed by a society at the home or a branch office thereof who does not solicit or negotiate fraternal benefit insurance and who receives no commissions but who may, as a part of his or her regular employment, sign policies, certificates, or other evidences of fraternal benefit insurance.

(d) Any person whose employment does not include the solicitation, negotiation, or effecting of fraternal benefit insurance contracts and who does not sign policies, certificates, or any other evidences of those contracts.

history: (History: Amended by Stats. 1982, Ch. 454, Sec. 111.)

article: 6. Powers of Commissioner


text:
(a) The examination requirements of Article 7 (commencing with Section 1675) of Chapter 5 of Part 2 of Division 1 shall not apply to a license to represent a fraternal benefit society if the individual insurance licensee of a society meets either of the following conditions:

(1) Was in the service of a society on March 1, 1945, and licensed to represent a fraternal benefit society on January 1, 1952, and continuously thereafter.

(2) Does not devote substantially full time to the sale of life insurance, accident and health or sickness insurance, or both, as provided in Section 1622, and is an individual part-time fraternal licensee, whether that insurance is provided by insurance policies or by fraternal benefit policies or certificates.

(b) If an individual that is exempt from the examination requirements described in subdivision (a) and meets the condition described in paragraph (2) of subdivision (a) later intends, after securing a license pursuant to this section, to devote substantially full time to the sale of life insurance, accident and health or sickness insurance, or both, the society shall give notice to the commissioner.

(c) (1) Upon receiving notice, the commissioner shall send to the individual part-time fraternal insurance licensee a notice specifying when the examination fee shall be paid and when, not sooner than one month nor later than three months, the licensee shall qualify by examination. Failure to pass the examination or failure to appear pursuant to the commissioner’s notification shall result in a termination 45 days thereafter of all license privileges unless the licensee passes the examination within the 45-day period. The individual part-time fraternal insurance licensee shall not be permitted to retake the examination more than twice within that 45-day period.

(2) Following termination pursuant to paragraph (1), the individual may remain licensed as a part-time fraternal insurance licensee until the licensee files a new application for the license and does either of the following:

(A) Takes and passes the qualifying examination to become a life insurance agent, accident and health or sickness insurance agent, or both.

(B) Demonstrates affirmatively to the commissioner that the individual will no longer devote substantially full time to the sale of life insurance, accident and health or sickness insurance, or both, to retain the individual part-time fraternal insurance license.

history: (History: Repealed and added by Stats. 2025, Ch. 558, Sec. 23. (AB 487) Effective January 1, 2026.)

article: 6. Powers of Commissioner


text: Every society authorized to do business in this State shall appoint in writing the commissioner and each successor in office to be its true and lawful attorney upon whom all lawful process in any action or proceeding against it shall be served, and shall agree in such writing that any lawful process against it which is served on said attorney shall be of the same legal force and validity as if served upon the society, and that the authority shall continue in force so long as any liability remain outstanding in this State. Copies of such appointment, certified by said commissioner, shall be deemed sufficient evidence thereof and shall be admitted in evidence with the same force and effect as the original thereof might be admitted.

article: 6. Powers of Commissioner


text: Service may be made as provided in Article 1 (commencing with Section 12919) of Chapter 2 of Division 3.

history: (History: Amended by Stats. 1970, Ch. 949.)

article: 6. Powers of Commissioner


text: An application for injunction against, proceedings for the dissolution of, or the appointment of a receiver for, any domestic society or branch thereof shall not be entertained by any court unless made by the Attorney General.

article: 6. Powers of Commissioner


text: A fraternal benefit society, its members, employees, agents, delegates, directors, and officers by whatever name known are subject to Section 12924.

history: (History: Amended by Stats. 1982, Ch. 454, Sec. 113.)

article: 6. Powers of Commissioner


text: Any domestic society may be converted into and receive a certificate of authority as a mutual life insurance company by compliance with all of the requirements of the laws of this State pertaining to mutual life insurance companies, provided that the plan for such conversion has been approved by the commissioner. Such plan shall be prepared in writing, setting forth in full the terms and conditions thereof. The board of directors, or other executive body charged with the responsibility for the management of the society’s affairs, shall submit such plan to the supreme legislative and governing body of such association or society at any regular or special meeting thereof, by giving a full, true and correct copy of such plan of proposed conversion with the notice of such meeting. Such notice shall be given as provided in the laws of the society for the convocation of such supreme legislative and governing body in regular or special session, as the case may be. The affirmative votes of two-thirds of all members of such supreme legislative and governing body shall be necessary for the approval of such agreement. Such plan shall also have been approved by the vote of the majority of the members who vote at a meeting called for that purpose. Notice of such meeting of members together with a full, true and correct copy of such plan of proposed conversion shall be given by mailing such notice from the head office of the society at least 30 days prior to such meeting in a sealed envelope, postage prepaid, addressed to each member at his last known post-office address. Such members may vote either in person or by mail on ballots furnished by the society. No such conversion shall take effect unless and until approved by the commissioner. The commissioner may give such approval if he finds that the proposed change is in conformity with the requirements of law and is not prejudicial to the certificate holders of the society. Such action in approving or disapproving shall be subject to judicial review.

article: 6. Powers of Commissioner


text:
On such conversion:

(a) Except as provided in (b) hereof all funds, assets and liabilities of any nature which theretofore were the funds, assets or liabilities of such society shall become the funds, assets and liabilities of such mutual life insurance company. In determining whether such mutual life insurance company meets the minimum capital and surplus requirements of this code, the commissioner shall consider such funds to be those of such mutual life insurance company. Such conversion shall likewise extinguish the assessment liability, if any, of the members, certificate holders or beneficiaries of such society.

(b) If by reason of any contract right in any member, certificate holder or beneficiary which exists on the effective date of this chapter, the transfer of such funds or assets would violate such right then the assets or funds as to which such contract right pertains shall be segregated and held to discharge the liabilities of such mutual life insurance company to the persons entitled thereto. In this case such separate funds shall not be considered by the commissioner in determining if such mutual life insurance company meets minimum capital and surplus requirements, and the assessment liability, if any, of such member, certificate holder or beneficiary is not extinguished.

article: 6. Powers of Commissioner


text:
In addition to any other ground for disapproving such conversion, the commissioner may refuse to give such approval unless evidence satisfactory to him is submitted that:

(a) The reserves on all certificates theretofore issued are sufficient to carry them to maturity either by reason of the amount thereof or by reason of action by such society pursuant to either subsection (c) hereof or Section 11111;

(b) The plan of conversion will result in the availability of all funds and assets of the mutual life insurance company to the carrying out of the contracts of insurance whether transacted before or after conversion; and

(c) The society has lawfully amended all outstanding certificates on which the member’s contribution was inadequate to carry such certificate to maturity without assessment. Such amendment shall accomplish that purpose by either increasing the amount of contribution or premium, by whatever name known, sufficiently or, at the option of the certificate holder, reducing the amount of his benefits sufficiently.

article: 6. Powers of Commissioner


text: Any society may comply with subsection (a) of Section 11110 by deducting from its surplus an amount which, when added to the reserves on certificates theretofore issued, shall be sufficient to carry such certificates to maturity and establish and maintain after its conversion into a mutual life insurance company a special reserve in such an amount. The basis of such special reserve shall not be altered without the prior written consent of the commissioner. The commissioner shall give such consent only when he finds that such alteration will not impair nor imperil the purpose for which such special reserve is established. Any impairment of such reserve shall, to the extent thereof, be deemed a deficiency of required reserves and shall render the mutual life insurance company insolvent. No part of such special reserve shall be deemed to be a part of the capital paid in or of the surplus of the mutual life insurance company.

article: 6. Powers of Commissioner


text: All decisions and findings of the commissioner made under the provisions of this chapter shall be subject to review by proper proceedings in any court of competent jurisdiction in this State.

article: 6. Powers of Commissioner


text:
When a society, or a class or section thereof, has assets equal to the reserves and credits on its policies, it may collect periodical or other contributions from the members of the society, class or section which, with interest accretions, will be sufficient to accomplish all the following:

(a) Pay the claims arising from its policies.

(b) Pay for the expense of management of the society.

(c) Maintain a fund sufficient to meet its accrued liabilities.

(d) Maintain assets equal to the reserves and credits.

Societies not operating pursuant to this section shall comply with Section 11121.

article: 7. Financial Matters

path: 2. CLASSES OF INSURANCE > 2. LIFE AND DISABILITY INSURANCE > 10. Fraternal Benefit Societies > 7. Financial Matters


text: Unless it operates under Section 11120, a society, or class or section thereof, shall collect from its members both stated contributions expressly segregated for the mortuary or disability funds and stated contributions expressly segregated for the expense or management funds. Both of such contributions may be included in the member’s periodical payment to the society. The society shall not use the money in the mortuary or disability funds nor the interest accretions thereon for expense purposes.

article: 7. Financial Matters


text: Any society may create, maintain, invest, disburse and apply any special fund or funds necessary to carry out any purpose permitted by the laws of the society. The funds may include hospital and help, sanitaria, home, thrift, pension for the society’s employees, patriotic, educational and relief funds, in accordance with the society’s laws.

history: (History: Amended by Stats. 1995, Ch. 166, Sec. 11. Effective January 1, 1996.)

article: 7. Financial Matters


text:
A society may, if authorized by a resolution of its supreme legislative or governing body, establish and operate one or more separate accounts and issue contracts on a variable basis to persons as specified in Section 11041, subject to compliance with the applicable laws. To the extent a society finds it necessary to comply with federal or state law, or regulations issued under state or federal law, a society may do the following:

(a) Adopt special procedures for conducting the business of the separate account.

(b) Provide special voting and other rights for a person with a beneficial interest in the special account, including, but not limited to, rights and procedures relating to investment policy, investment advisory services, selecting certified public accountants, and selecting a committee to manage the account.

(c) Issue contracts on a variable basis that are exempted from the requirements of Sections 11062, 11064, and 11065.

history: (History: Added by Stats. 1995, Ch. 166, Sec. 12. Effective January 1, 1996.)

article: 7. Financial Matters


text: Any such society may own real estate and buildings within or without the state of its incorporation, for any purposes for which it may use funds. It may receive gifts and bequests for such purposes and may be named in policies as beneficiary in trust for such purposes.

article: 7. Financial Matters


text: Unless otherwise provided in the contracts of the members, such funds shall be held, invested, and disbursed for the use and benefit of the society, and no member or beneficiary shall have or acquire individual rights therein or become entitled to any apportionment thereof.

article: 7. Financial Matters


text: Every domestic society shall invest its funds only in securities permitted by the laws of this State for the investment of the assets of life insurers issuing nonassessable policies on a reserve basis. Such securities shall be valued according to the methods used in valuing similar securities held by such insurers.

article: 7. Financial Matters


text: An admitted foreign society shall invest its funds either under the same restrictions as domestic societies or in accordance with the laws of the state in which it is incorporated. Any admitted foreign society may deposit securities in accordance with the laws of any state.

article: 7. Financial Matters


text: An admitted foreign society organized under the laws of any jurisdiction other than a state of the United States shall at all times maintain with a trustee in the United States, in trust for the benefit and security of all its policyholders and creditors in the United States, assets as prescribed in Section 11128. Such assets are designated “trusteed assets.”

article: 7. Financial Matters


text:
The value of the trusteed assets referred to in Section 11127 shall be equal to the sum of all of the following:

(a) All of the indebtedness of that society in the United States having a fixed maturity.

(b) The percentage, specified in subdivision (c), of that part of the tabular reserve which is applicable to its United States business in force.

(c) If the valuation report prescribed by Section 11133 indicates that the degree of actuarial solvency of the society is 100 percent or greater, the percentage prescribed in subdivision (b) is 100 percent. Otherwise the percentage prescribed in subdivision (b) is that percentage, less than 100 percent, which is indicated in the valuation report to be the degree of that society’s actuarial solvency. The society may maintain those trusteed assets in excess of the value herein prescribed.

history: (History: Amended by Stats. 1982, Ch. 454, Sec. 114.)

article: 7. Financial Matters


text: The provisions of Sections 1596 to 1598, inclusive, shall apply to such society specified in Section 11127 and to the matters set forth in Sections 11127 and 11128.

article: 7. Financial Matters


text: The commissioner may require any society specified in Section 11127 to file with him annually and at such other times as he may determine, and in such form as he may prescribe, a statement showing the extent to which such society’s policyholders and creditors in the United States are protected by trusteed assets in the United States.

article: 7. Financial Matters


text: Every society transacting business in this state shall annually, on or before the first day of March, unless for cause shown such time has been extended by the commissioner, file with the commissioner, in such form as he may require, a statement under oath of its president, secretary or treasurer, or corresponding officers, of its affairs, financial condition and operations during the calendar year ending on the thirty-first day of December last preceding. Such statement shall contain items showing the reserve liabilities on all outstanding certificates classified according to the various mortality standards and interest assumptions for such certificates. The commissioner is authorized and empowered to address any additional inquiries to any such society in relation to its doings or condition, or any other matter connected with its transaction relative to the business contemplated by this chapter, and such officers of such society, as the commissioner may require, shall promptly reply in writing, and under oath, if so required to all such inquiries.

history: (History: Amended by Stats. 1981, Ch. 1131, Sec. 17. Operative July 1, 1982, by Sec. 29 of Ch. 1131.)

article: 7. Financial Matters


text: A synopsis of its annual statement and valuation report providing an explanation of the facts concerning the condition of the society thereby disclosed shall be printed and mailed to each benefit member of the society not later than June 1st of each year, or, in lieu thereof, such synopsis may be published in the society’s official paper and the issue containing same mailed to each benefit member of the society.

article: 7. Financial Matters


text: In addition to the annual report required by Section 11131, each society shall annually, on or before the first day of March, file with the commissioner a valuation of its certificates in force on December 31st last preceding: Provided, the commissioner may, in his discretion for cause shown, extend the time for filing such valuation for not more than two calendar months. Such report of valuation shall show, as reserve liabilities, the difference between the present mid-year value of the promised benefits provided in the certificates of such society in force and the present mid-year value of the future net rates as the same are in practice actually collected, not including therein any value for the right to make extra assessments and not including any amount by which the present mid-year value of future net contributions exceeds the present mid-year value of promised benefits on individual certificates. At the option of any society, in lieu of the above, the valuation may show the net tabular value which, in the case of monthly contributions, may be the means of the terminal reserve values for the end of the preceding and of the current certificate years. Such net tabular value as to certificates issued prior to the effective date of this chapter shall be determined in accordance with the provisions of law applicable thereto as of the date of issuance thereof and as to certificates issued on or after said date shall be not less than the reserves determined according to the commissioners’ reserve valuation method as hereinafter defined. If the rate or payment (by whatever name known) charged is less than the tabular net rate according to the basis of the valuation used, an additional reserve equal to the present value of the deficiency in such rates shall be set up and maintained as a liability.

article: 7. Financial Matters


text:
Except as otherwise provided in Section 10489.6, reserves according to the commissioners’ reserve valuation method, for the life insurance and endowment benefits of certificates providing for a uniform amount of insurance and requiring the payment of uniform rates shall be the excess, if any, of the present value, at the date of valuation, of such future guaranteed benefits provided for by such certificates, over the then present value of any future modified net rates therefor. The modified net rates for any such certificate shall be such uniform percentage of the respective contract payment for such benefits that the present value, at the date of issue of the certificate, of all such modified net rates shall be equal to the sum of the then present value of such benefits provided for by the certificate and the excess of (a) over (b), as follows:

(a) A net level annual payment equal to the present value at the date of issue, of such benefits provided for after the first certificate year, divided by the present value, at the date of issue, of an annuity of one per annum payable on the first and each subsequent anniversary of such certificate on which a payment falls due; provided, however, that such net level annual payment shall not exceed the net level annual payment on the 19-year payment whole life plan for insurance of the same amount at an age one year higher than the age at issue of such certificate.

(b) A net one-year term payment for such benefits provided for in the first certificate year.

Provided that for any certificate issued on or after January 1, 1986, for which the contract premium in the first policy year exceeds that of the second year and for which no comparable additional benefit is provided in the first year for such excess and which provides an endowment benefit or a cash surrender value or a combination thereof in an amount greater than such excess premium, the reserve according to the commissioners reserve valuation method as of any policy anniversary occurring on or before the assumed ending date defined herein as the first policy anniversary on which the sum of any endowment benefit and any cash surrender value then available is greater than such excess premium shall be the greater of the reserve as of such policy anniversary calculated as described in the preceding paragraph and the reserve as of such policy anniversary calculated as described in that paragraph, but with (i) the value defined in subdivision (a) of that paragraph being reduced by 15 percent of the amount of such excess first year premium, (ii) all present values of benefits and premiums being determined without reference to premiums or benefits provided for by the policy after the assumed ending date, (iii) the policy being assumed to mature on such date as an endowment, and (iv) the cash surrender value provided on such date being considered as an endowment benefit. In making the above comparison the mortality and interest bases stated in Sections 11136 and 11136.1 shall be used.

Reserves according to the commissioners’ reserve valuation method for (1) life insurance certificates providing for a varying amount of insurance or requiring the payment of varying rates, (2) group annuity and pure endowment contracts purchased under a retirement plan or plan of deferred compensation, established or maintained by an employer (including a partnership or sole proprietorship) or by an employee organization, or by both, other than a plan providing individual retirement accounts or individual retirement annuities under Section 408 of the Internal Revenue Code, as now or hereafter amended, (3) disability and accidental death benefits in all certificates and contracts, and (4) all other benefits, except life insurance and endowment benefits in life insurance certificates, shall be calculated by a method consistent with the principles of the first paragraph of this section, except that any extra premiums charged because of impairments or special hazards shall be disregarded in the determination of modified net premiums.

history: (History: Amended by Stats. 1982, Ch. 940, Sec. 7. Effective September 13, 1982.)

article: 7. Financial Matters


text: The present value of deferred payments due under incurred claims or matured certificates shall be deemed a liability of the society and shall be computed upon the mortality and interest basis assumed by the society for such valuation.

article: 7. Financial Matters


text:
Except as otherwise provided in Section 10489.4, such valuation shall be certified by a competent actuary or, at the expense of the society, verified by the actuary of the insurance supervisory official of the state of domicile of the society, and the legal minimum standard of valuation shall be as follows:

(a) All benefits promised by certificates issued prior to September 22, 1952, and the rates therefor shall be valued in accordance with the provisions of law applicable thereto as of the date of issuance, but not lower than the standards and interest assumptions used in the calculation of rates for such benefits.

(b) The minimum standard for the valuation of all certificates issued after September 21, 1952, and prior to January 1, 1972, shall be 3 percent per annum interest; in the case of certificates issued on and after January 1, 1972, and prior to January 1, 1980, the minimum standard for the valuation of all such certificates shall be 4 percent per annum interest; and in the case of certificates issued on and after January 1, 1980, the minimum standard for the valuation of all single premium certificates shall be 512 percent per annum interest and for the valuation of all other such certificates shall be 412 percent per annum interest, and the following tables:

(1) For all ordinary certificates of life insurance issued on the standard basis, excluding any disability and accidental death benefits in such certificates—the American Men Ultimate Table of Mortality, with Bowerman’s or Davis’ Extension thereof, or, at the option of the society, the Commissioners 1941 Standard Ordinary Mortality Table or the Commissioners 1958 Standard Ordinary Mortality Table, using actual age of the insured for male risks and an age not more than six years younger than the actual age of the insured for female risks, and for such policies issued on or after the operative date of Section 10163.2 (i) the Commissioners 1980 Standard Ordinary Mortality Table, or (ii) at the election of the company for any one or more specified plans of life insurance, the Commissioners 1980 Standard Ordinary Mortality Table with Ten-Year Select Mortality Factors, or (iii) any ordinary mortality table, adopted after 1980 by the National Association of Insurance Commissioners, or its successor, that is approved by regulation promulgated or bulletin issued by the commissioner for use in determining the minimum standard of valuation for such policies.

(2) For all industrial life insurance certificates issued on the standard basis, excluding any disability and accidental death benefits in such certificates—the 1941 Standard Industrial Mortality Table, for such certificates issued prior to the operative date of Section 10163.2, and for such policies issued on or after such operative date, the Commissioners 1961 Standard Industrial Mortality Table or any industrial mortality table, adopted after 1980 by the National Association of Insurance Commissioners, or its successor, that is approved by regulation promulgated or bulletin issued by the commissioner for use in determining the minimum standard of valuation for such policies.

(3) For annuity and pure endowment certificates, excluding any disability and accidental death benefits in such certificates—the 1937 Standard Annuity Mortality Table, or the Annuity Mortality Table for 1949 Ultimate, or the Individual Annuity Mortality Table for 1971, or any individual annuity mortality table, adopted after 1980 by the National Association of Insurance Commissioners, or its successor, that is approved by regulation promulgated or bulletin issued by the commissioner for use in determining the minimum standard of valuation for such contracts, or any modification of any of these tables approved by the commissioner.

(4) For disability benefits in or supplementary to ordinary certificates—Hunter’s Disability Table or the Class 3 Disability Table (1926), modified to conform to the contractual waiting period, or the tables of Period 2 disablement rates and the 1930 to 1950 termination rates of the 1952 Disability Study of the Society of Actuaries with due regard to the type of benefit, or the 1964 Commissioners Disability Table, or any tables of disablement rates and termination rates, adopted after 1980 by the National Association of Insurance Commissioners, or its successor, that are approved by regulation promulgated or bulletin issued by the commissioner for use in determining the minimum standard of valuation for such policies. Any such table shall, for active lives, be combined with a mortality table permitted for calculating the reserves for life insurance certificates.

(5) For accidental death benefits in or supplementary to certificates—The Inter-Company Double Indemnity Mortality Table or the 1959 Accidental Death Benefits Table, or any accidental death benefits table, adopted after 1980 by the National Association of Insurance Commissioners, or its successor, that is approved by regulation promulgated or bulletin issued by the commissioner for use in determining the minimum standard of valuation for such policies. Any such table shall be combined with a mortality table permitted for calculating the reserves for life insurance certificates.

(6) For temporary accident and health benefits in or supplementary to certificates—Class 3 Disability Table (1926) with Conference Modifications or the 1964 Commissioners Disability Table, or any tables of disablement rates and termination rates, adopted after 1980 by the National Association of Insurance Commissioners, or its successor, that are approved by regulation promulgated or bulletin issued by the commissioner for use in determining the minimum standard of valuation for such policies.

(7) For life insurance issued upon the substandard basis and other special benefits—such tables as may be approved by the commissioner.

(c) The commissioner may, in his discretion, accept other standards for valuation if he finds that the reserves produced thereby will not be less in the aggregate than reserves computed in accordance with the minimum valuation standard prescribed. Whenever the mortality experience under the certificates valued on the same mortality table is in excess of the expected mortality according to such table for a period of three consecutive years, the commissioner may require additional reserves when in his judgment deemed necessary on account of such certificates.

(d) Notwithstanding the provisions of subdivisions (a) and (b), any society, with the consent of the insurance supervisory official of the state of domicile of the society, and under such conditions, if any, which he may impose, may establish and maintain reserves on its certificates in excess of the reserves required thereunder, but the contractual rights of any insured member shall not be affected thereby.

history: (History: Amended by Stats. 2009, Ch. 234, Sec. 12. (AB 299) Effective January 1, 2010.)

article: 7. Financial Matters


text: Whenever the commissioner finds from any financial statement or valuation report made to him or her by any society authorized to do business in this state or from a filed report on examination of any such society that the admitted assets of the society are less than the sum of its required reserves and accrued liabilities, the commissioner shall determine the amount of that deficiency and shall issue a written requisition to the society to remove, repair, or make good that deficiency within such period as he or she shall designate, not less than 30 days nor more than six months from the service of the requisition, except that if the commissioner believes the interests of the certificate holders of such society will best be served by extending the period of time beyond six months, he or she may do so for such period or periods of time as he or she in his or her discretion deems best. The commissioner may also by official order prohibit the society, while that deficiency exists, from issuing any new contracts of insurance in this state, and in case of a domestic society, from issuing any new contracts in this state or elsewhere. If the society fails or is unable to make good the deficiency within the time specified in the order, the commissioner shall proceed against the society under the provisions of Article 14 (commencing with Section 1010) of Chapter 1 of Part 2 of Division 1 on the ground that its further transaction of business will be hazardous to its certificate holders, its creditors, or the public. In the case of a foreign society the commissioner may also, or in lieu of that proceeding, revoke its certificate of authority to do business in this state or refuse to issue a renewal certificate of authority.

history: (History: Amended by Stats. 1995, Ch. 166, Sec. 13. Effective January 1, 1996.)

article: 7. Financial Matters


text: The commissioner, or any person he may appoint, shall have the power of visitation and examination into the affairs of any domestic society. He may employ assistants for the purpose of such examination, and he, or any person he may appoint, shall have free access to all the books, papers and documents that relate to the business of the society. The minutes of the proceedings of the supreme governing or legislative body and of the board of directors or corresponding body of a society shall be in the English language. In making any such examination the commissioner may summon and qualify as witnesses under oath and examine its officers, agents and employees or other persons in relation to the affairs, transactions and condition of the society. The report of the commissioner or in his discretion a summary thereof, and such recommendations or statements of the commissioner as may accompany such report, shall be read at the first meeting of the board of directors or corresponding body of the society following the receipt thereof, and if directed so to do by the commissioner shall also be read at the first meeting of the supreme legislative or governing body of the society following the receipt thereof. The expense of each examination and of each valuation, including compensation and actual expense of examiners, shall be paid by the society examined or whose certificates are valued, upon statements furnished by the commissioner.

history: (History: Amended by Stats. 1980, Ch. 209, Sec. 5.)

article: 7. Financial Matters


text: No report of examination shall be adopted by the commissioner or filed by him as an official document except after a notice is given and a hearing held thereon, if demanded, in accordance with the provisions of Section 11141. The commissioner in his determination made upon the basis of his findings from the record of such hearing may direct the society to comply with such recommendations or take such other corrective steps as may be contained therein. In any action or proceeding in the name of the commissioner or instituted in his behalf against the society, such report, if adopted by the commissioner and filed as an official document shall be admissible in evidence and shall be prima facie evidence of the facts stated therein. Nothing herein contained shall preclude the commissioner from instituting any proceeding under Section 11137 of this chapter at any time or from using as proof in such proceeding any report of examination or part thereof, whether or not such report has been adopted and filed.

article: 7. Financial Matters


text: The commissioner, or any person whom he may appoint, may examine any foreign society, transacting or applying for admission to transact business in this State. He may employ assistants and he, or any person he may appoint, shall have free access to all books, papers and documents that relate to the business of the society. He may summon, qualify as witnesses under oath and examine any persons in relation to the affairs, transactions and condition of the society. He may in his discretion accept, in lieu of such examination, the examination of the insurance department of the state, territory, district, province or country where such society is organized. The compensation and actual expenses of the examiners making any examination or general or special valuation shall be paid by the society examined or by the society whose certificates obligations have been valued, upon statements furnished by the commissioner.

history: (History: Repealed and added by Stats. 1951, Ch. 1193.)

article: 7. Financial Matters


text: Pending, during or after an examination or investigation of a society, either domestic or foreign, the commissioner shall make public no financial statement, report or finding, nor shall he permit to become public any financial statement, report or finding affecting the status, standing or rights of any society, until a copy thereof shall have been served upon the society at its principal office and the society shall have been afforded a reasonable opportunity to answer any such financial statement, report or finding, and to make such showing in connection therewith as it may desire.

article: 7. Financial Matters


text:
No person shall cause or permit to be made, issued or circulated in any form:

(a) Any misrepresentation or false or misleading statement concerning the terms, benefits or advantages of any fraternal insurance contract now issued or to be issued in this State; or the financial condition of any society or the legal reserve system upon which it operates; or any other matter concerning any society;

(b) Any false or misleading estimate or statement concerning the dividends or shares of surplus paid or to be paid by any society on any insurance contract; or

(c) Any incomplete comparison of an insurance contract of one society with an insurance contract of another society or insurer for the purpose of inducing the lapse, forfeiture or surrender of any insurance contract.

article: 7. Financial Matters


text:
A comparison of insurance contracts is incomplete if it does not compare in detail:

(a) The gross rates, and the gross rates less any dividend or other reduction allowed at the date of the comparison;

(b) Any increase in cash values, and all the benefit provided by each contract for the possible duration thereof as determined by the life expectancy of the insured.

article: 7. Financial Matters


text:
A comparison of insurance contracts is incomplete if it omits from consideration:

(a) Any benefit or value provided in the contract,

(b) Any differences as to amount or period of premiums or payments,

(c) Any differences in limitations or conditions or provisions which directly or indirectly affect the benefits.

article: 7. Financial Matters


text: In any determination of the incompleteness or misleading character of any comparison or statement, it shall be presumed that the insured had no knowledge of any of the contents of the contract involved.

article: 7. Financial Matters


text: Any person who violates any provision of Sections 11142 to 11145 or knowingly receives any compensation or commission by or in consequence of such violation, shall upon conviction be punished by a fine not exceeding one thousand dollars ($1,000), or by imprisonment in the county jail for not more than six months, or by both fine and imprisonment.

history: (History: Amended by Stats. 1983, Ch. 1092, Sec. 183. Effective September 27, 1983. Operative January 1, 1984, by Sec. 427 of Ch. 1092.)

article: 7. Financial Matters


text: Compensation shall not be paid to any employee or officer by whatever name known of either of the parties to any contract of merger, consolidation or reinsurance for directly or indirectly aiding in effecting such contract. Except as fully expressed in such contract or itemized statement of expenses approved by the supervising insurance authorities, compensation for negotiating, aiding or promoting such a consolidation, merger or reinsurance shall not be paid to any person.

article: 8. Violations and Penalties

path: 2. CLASSES OF INSURANCE > 2. LIFE AND DISABILITY INSURANCE > 10. Fraternal Benefit Societies > 8. Violations and Penalties


text: Any person violating Section 11160 is guilty of a felony and punishable by a fine not exceeding ten thousand dollars ($10,000) or imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code, or both.

history: (History: Amended by Stats. 2011, Ch. 15, Sec. 214. (AB 109) Effective April 4, 2011. Operative October 1, 2011, by Sec. 636 of Ch. 15, as amended by Stats. 2011, Ch. 39, Sec. 68.)

article: 8. Violations and Penalties


text:
It is a felony, punishable by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code, for any officer, director, agent or employee of any fraternal benefit society to, directly or indirectly, for himself or as partner or agent of others:

(a) Borrow any of the funds of such society.

(b) Become endorser or surety for loans by the society to others.

(c) In any manner be obligor for moneys borrowed or loaned by such society.

history: (History: Amended by Stats. 2011, Ch. 15, Sec. 215. (AB 109) Effective April 4, 2011. Operative October 1, 2011, by Sec. 636 of Ch. 15, as amended by Stats. 2011, Ch. 39, Sec. 68.)

article: 8. Violations and Penalties


text: It is a felony, punishable by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code, for any officer, trustee, agent or employee of a fraternal benefit society to ask, receive, or consent or agree to receive anything of value for procuring or endeavoring to procure a loan to any person from the trust funds of, or funds belonging to, a fraternal benefit society.

history: (History: Amended by Stats. 2011, Ch. 15, Sec. 216. (AB 109) Effective April 4, 2011. Operative October 1, 2011, by Sec. 636 of Ch. 15, as amended by Stats. 2011, Ch. 39, Sec. 68.)

article: 8. Violations and Penalties


text: Any person not authorized pursuant to Section 11013 who solicits membership for, or in any manner assists in procuring membership in, any nonadmitted fraternal benefit society is guilty of a misdemeanor and punishable by fine not less than one hundred dollars ($100) nor more than four hundred dollars ($400).

history: (History: Amended by Stats. 1983, Ch. 1092, Sec. 185. Effective September 27, 1983. Operative January 1, 1984, by Sec. 427 of Ch. 1092.)

article: 8. Violations and Penalties


text: Any person who knowingly or willfully makes any false or fraudulent statement or representation in or with reference to any application for membership, or for the purpose of obtaining money or benefit from any fraternal benefit society is guilty of a misdemeanor and punishable by fine not less than one hundred dollars ($100) nor exceeding one thousand dollars ($1,000), or imprisonment in the county jail not less than 30 days nor exceeding one year, or both.

history: (History: Amended by Stats. 1983, Ch. 1092, Sec. 186. Effective September 27, 1983. Operative January 1, 1984, by Sec. 427 of Ch. 1092.)

article: 8. Violations and Penalties


text: Firemen's, policemen’s or peace officers’ benefit and relief associations now existing, or that may be formed hereafter for the purpose of aiding their members or dependents of their members in case of sickness, accident, distress, or death, shall be subject to this chapter, to the extent not preempted by the federal Employee Retirement Income Security Act of 1974 (ERISA). An association that operates strictly in accordance with this chapter shall not be subject to any other provision of this code or to any law of this state relating to insurance, whether now existing or hereafter enacted, except when expressly designated in that law.

history: (History: Amended by Stats. 2020, Ch. 365, Sec. 1. (SB 1192) Effective January 1, 2021.)

path: 2. CLASSES OF INSURANCE > 2. LIFE AND DISABILITY INSURANCE > 10A. Firemen's, Policemen's,or Peace Officers’ Benefit and Relief Associations


text:
(a) An association shall not operate or do business in this state without a certificate of authority. The commissioner shall issue a certificate of authority to any association unless the commissioner determines, after examination, that it does not comply with the provisions of this chapter. The filing fee for the application for the certificate of authority shall be one thousand four hundred ten dollars ($1,410).

(b) An association shall renew its certificate of authority within 30 days after a change in name or address or before a merger.

(c) (1) The commissioner may revoke the certificate of authority for an association that failed to renew its certificate of authority in compliance with subdivision (b), after giving reasonable written notice mailed to the last address of the association registered with the department.

(2) The commissioner may revoke the certificate of authority for an association that has a dissolved, suspended, or otherwise inactive status according to the records of the Secretary of State, after giving reasonable written notice mailed to the last address of the association registered with the department.

(3) To obtain a reissue of a certificate of authority revoked pursuant to this subdivision, an association shall apply to the commissioner pursuant to subdivision (a).

history: (History: Amended by Stats. 2024, Ch. 444, Sec. 6. (SB 577) Effective January 1, 2025.)

chapter: 10A. Firemen's, Policemen's,or Peace Officers’ Benefit and Relief Associations


text:
(a) (1) Each association that holds a certificate of authority pursuant to this chapter and that issues long-term disability or long-term care policies or contracts shall submit to the commissioner the opinion of a qualified actuary as to whether the reserves and related actuarial items that support the policies or contracts issued pursuant to this chapter, including policies and contracts issued by entities established by these associations that provide benefits described in this chapter, are expected to be adequate to satisfy contractual provisions, are based on reasonable assumptions, and are based on actuarial standards of practice published by the American Academy of Actuaries and the Actuarial Standards Board. An association that holds a certificate of authority pursuant to this chapter shall file its opinion no later than July 1, 2021, and that opinion shall have been completed no earlier than December 31, 2019. Thereafter, an association shall submit a new actuary opinion to the commissioner within no more than four years from the date of its last opinion on file with the commissioner.

(2) An association is considered to have issued a long-term care or disability policy or contract if it self-funds all or part of the resulting obligation. An association that markets long-term policies or contracts issued by an insurer that is admitted by the department to offer insurance products in the state is exempt from this reporting requirement.

(3) An association seeking a certificate of authority pursuant to this chapter shall file an opinion, to the extent feasible, that establishes that it would have adequate resources to provide benefits described in this chapter as required to satisfy its proposed contractual obligations.

(b) The opinion required by subdivision (a) shall include supporting memoranda from the same qualified actuary as to whether the reserves and related actuarial items held in support of the policies and contracts, when considered in light of the assets held by the association with respect to the reserves and related actuarial items, including, but not limited to, the investment earnings on the assets and the considerations anticipated to be received and retained under the policies and contracts, shall make adequate provision for the association’s obligations under the policies and contracts, including, but not limited to, the benefits and any administrative and operating expenses associated with the policies and contracts.

(c) The opinion required by subdivision (a) shall be governed by the following provisions:

(1) It shall include supporting memoranda consistent with actuarial standards of practice published by the American Academy of Actuaries and the Actuarial Standards Board.

(2) If the association fails to provide an opinion and supporting memoranda to the commissioner that meets the requirements of this section, the commissioner shall notify the association of the deficiencies in the filing, and shall make a specific request that identifies the issues that should be addressed in an amended filing. The requests shall be consistent with actuarial standards of practice published by the American Academy of Actuaries and the Actuarial Standards Board.

(d) Documents, materials, or other information, including the opinion with supporting memoranda, submitted pursuant to this section that are in the possession or control of the Department of Insurance and that are obtained by, created by, or disclosed to the commissioner or any other person pursuant to this section, are recognized by this state as being proprietary and to contain trade secrets. Those documents, materials, or other information shall be confidential by law and privileged, shall not be subject to disclosure by the commissioner pursuant to the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code), and shall not be subject to subpoena or discovery from the commissioner or admissible into evidence, in a private civil action if obtained from the commissioner. The commissioner shall not otherwise make those documents, materials, or other information public without the prior written consent of the association.

history: (History: Amended by Stats. 2021, Ch. 615, Sec. 313. (AB 474) Effective January 1, 2022. Operative January 1, 2023, pursuant to Sec. 463 of Stats. 2021, Ch. 615.)


text: An association that self-funds all or part of the benefits provided under this chapter shall include the following language, or other language approved by the commissioner, in all contracts that are not regulated by the department, and in certificates evidencing coverage under those contracts, in capital letters and in a minimum of 12-point type: “ALL OR A PORTION OF THE BENEFITS PROVIDED BY THIS CONTRACT ARE NOT SUBJECT TO REGULATION BY THE CALIFORNIA DEPARTMENT OF INSURANCE, AND THE CONTRACT IS NOT GUARANTEED BY THE CALIFORNIA LIFE AND HEALTH INSURANCE GUARANTEE ASSOCIATION.”

history: (History: Added by Stats. 2020, Ch. 365, Sec. 3. (SB 1192) Effective January 1, 2021.)


text: Each association that holds a certificate of authority pursuant to this chapter and that issues long-term disability or long-term care policies or contracts shall, upon written request from a member, make available to that member the contract for benefits, certificate evidencing coverage thereunder, or other plan document that describes the benefits being provided to that member, within 30 days of the request.

history: (History: Added by Stats. 2020, Ch. 365, Sec. 4. (SB 1192) Effective January 1, 2021.)


text: Such association may be incorporated or unincorporated, but if incorporated it shall neither issue nor be authorized to issue shares of stock.

history: (History: Added by Stats. 1935, Ch. 161.)


text:
The membership of such association shall consist solely of the following or any combination thereof:

(a) Members of police departments of municipal or public corporations or districts.

(b) Members of fire departments of municipal or public corporations or districts.

(c) Peace or law enforcement officers who are regular and salaried officers or employees of the state or of a single county or other political subdivision or public or municipal corporation.

(d) Persons who are emergency medical services personnel and employed by a fire department of a city, county, or district.

(e) Persons who at the time of becoming members of such association were qualified pursuant to subdivisions (a), (b), (c), or (d) of this section.

history: (History: Amended by Stats. 1986, Ch. 467, Sec. 1.)


text: Such association shall not pay, promise or agree to pay, either directly or indirectly, any consideration of any nature for the solicitation or procuring of members or applications for membership.


text: The trustees, directors or governing body of such association, by whatever name their office is known or designated, shall be elected by the membership of the association.


text: Moneys or property directly or indirectly contributed to such association by its members shall not be paid out as benefits to any persons other than its members, their dependents, or beneficiaries nominated in writing by them.


text: Such association shall be supported mainly by contributions from its members, whether in the form of fees, dues, assessments, or otherwise, and by donations made to it from time to time.


text: Any domestic insurer providing life insurance upon the assessment plan may transform itself into an incorporated life insurer issuing policies on a reserve basis with such name as its directors or trustees determine. If incorporated, such insurer may make the transformation by amendment of its articles and by-laws, either by a majority vote of its directors or trustees or in any other lawful manner. If unincorporated it may make the transformation by incorporating.

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

article: 1. Authorization and Effect

path: 2. CLASSES OF INSURANCE > 2. LIFE AND DISABILITY INSURANCE > 11. Change by Assessment Plan Insurer to Reserve Plan > 1. Authorization and Effect


text: After completing such transformation and procuring from the commissioner a certificate of authority to transact business in this State as an incorporated insurer issuing policies on a reserve basis, it may incur the obligations and enjoy the benefits of such insurer.

chapter: 11. Change by Assessment Plan Insurer to Reserve Plan

article: 1. Authorization and Effect


text: The transformed insurer is a continuation of the original insurer. Its officers elected before or during the transformation serve through their respective terms as provided in the articles and by-laws under which they were elected. Their successors shall be elected and serve as the law and its articles and by-laws provide after the transformation. Such transformation shall not affect existing suits, rights or contracts.

article: 1. Authorization and Effect


text: Any insurer so reorganized shall have assets representing a paid-in capital represented by shares of stock apart from any assets described in Section 11441. At least two hundred thousand dollars ($200,000) of that capital shall be paid up before the insurer issues any policies on the reserve plan.

history: (History: Amended by Stats. 1982, Ch. 454, Sec. 115.)

article: 2. Capital Adjustments

path: 2. CLASSES OF INSURANCE > 2. LIFE AND DISABILITY INSURANCE > 11. Change by Assessment Plan Insurer to Reserve Plan > 2. Capital Adjustments


text: All assets belonging before transformation to any such insurer or arising or accruing from policies issued upon the assessment plan, shall be used only for the benefit of the holders of such policies. Such assets shall not be used or considered as any part of the paid in capital provided for by section 11440.

article: 2. Capital Adjustments


text: If, at or after the time of the transformation, it appears, either from the last preceding annual report by such insurer to the commissioner, or from an investigation made by the commissioner, that the present value of the contributions to be received from the holders of policies on the assessment plan, together with all assets owned by the insurer that have been accumulated from assessments paid by members on that plan, are not equal to the present value of the benefits, including all matured liabilities, to be derived by members under the assessment plan, the insurer shall set aside and maintain a fund for the purpose set forth in section 11443. Such fund together with the present value of contributions and assets, shall equal the present value of such benefits.

article: 2. Capital Adjustments


text: The fund required by Section 11442 shall be used for the payment of matured liabilities arising under the assessment plan when other assets applicable thereto are exhausted. It may be derived from the excess over two hundred thousand dollars ($200,000) of the paid-in capital of the insurer. It need be maintained only during the existence of conditions set forth in Section 11442.

history: (History: Amended by Stats. 1982, Ch. 454, Sec. 116.)

article: 2. Capital Adjustments


text: Members of the insurer who are in good standing prior to the transformation may thereafter transfer their insurance, without change of amount and without medical examination, from the assessment plan to the nonassessable reserve basis at the reserve rates. The interest and the assets of the insurer credited to the person so transferring shall become a part of the assets of the insurer on the reserve basis.

article: 3. Transfer of Insurance

path: 2. CLASSES OF INSURANCE > 2. LIFE AND DISABILITY INSURANCE > 11. Change by Assessment Plan Insurer to Reserve Plan > 3. Transfer of Insurance


text: The insurer, after such transformation, shall exercise all the rights and powers and perform all the duties conferred or imposed by law upon insurers writing the classes of insurance written by it.

path: 2. CLASSES OF INSURANCE > 2. LIFE AND DISABILITY INSURANCE > 11. Change by Assessment Plan Insurer to Reserve Plan > 4. Powers of Insurer After Transformation


text: Such insurer shall exercise all the rights and powers and perform all the duties necessary to protect rights and contracts existing prior to reorganization.

article: 4. Powers of Insurer After Transformation


text: The commissioner shall exercise the powers and discharge the duties, concerning any such insurer, that are applicable to domestic insurers issuing policies of the same class. He or she shall issue a certificate of authority to transact the proper classes of insurance in this state to any such insurer which is solvent as to its reserve basis policies under Article 13 (commencing with Section 980) of Chapter 1 of Part 2 of Division 1, and has fully complied with the laws of this state.

history: (History: Amended by Stats. 1982, Ch. 454, Sec. 117.)


text: Any life insurer which has transformed its business pursuant to this chapter shall value its assessment policies according to the standard of valuation which would be used in the absence of the transformation, and shall value its nonassessable reserve basis policies according to the standard of valuation set forth in Article 3 (commencing with Section 10478) of Chapter 5. The various kinds of insurance written shall be governed by the provisions of this code applicable thereto.

history: (History: Amended by Stats. 1982, Ch. 454, Sec. 118.)

article: 5. Valuation of Policies

path: 2. CLASSES OF INSURANCE > 2. LIFE AND DISABILITY INSURANCE > 11. Change by Assessment Plan Insurer to Reserve Plan > 5. Valuation of Policies


text:
The following organizations and persons may receive transfers of property, conditioned upon their agreement to pay an annuity to the transferor or the transferor’s nominee, after obtaining from the commissioner a certificate of authority so to do:

(a) Any charitable, religious, benevolent or educational organization, pecuniary profit not being its object or purpose, after being in active operation for at least 10 years; provided, nevertheless, that 10 years of active operation shall not be required in case of:

(1) A nonprofit corporation organized and controlled by a hospital licensed by the State Department of Health Services as a general acute care hospital pursuant to Chapter 2 (commencing with Section 1250) of Division 2 of the Health and Safety Code; and

(2) An incorporated educational institution offering courses of instruction beyond high school, organized pursuant to Section 94757 of the Education Code, and which is, and for at least one year has been, qualified pursuant to Chapter 7 (commencing with Section 94700) of Part 59 of the Education Code to issue diplomas or degrees as defined in Sections 94724 and 94726 of that code;

(b) Every organization or person maintaining homes for the aged for pecuniary profit.

This section applies to organizations subject to and operating under Chapter 10 (commencing with Section 1770) of Division 2 of the Health and Safety Code.

(c) This section shall become operative on January 1, 1997.

history: (History: Repealed (in Sec. 292) and added by Stats. 1995, Ch. 758, Sec. 292.5. Effective January 1, 1996. Section operative January 1, 1997, by its own provisions.)

chapter: 12. Grants and Annuities Societies

path: 2. CLASSES OF INSURANCE > 2. LIFE AND DISABILITY INSURANCE > 12. Grants and Annuities Societies


text:
A person shall not transact in this state the business described in this chapter without first procuring a certificate of authority from the commissioner for that purpose. Application for that certificate shall be made on a form prescribed by the commissioner accompanied by a filing fee of four thousand two hundred thirty-three dollars ($4,233). The certificate shall not be granted until the applicant conforms to the requirements of this chapter and the laws of this state prerequisite to its issue. After the issuance, the holder shall continue to comply with the requirements of this chapter and the laws of this state. When a hearing is held under this section the proceedings shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, and the commissioner shall have all of the powers granted therein.

Subject to the annual fee provisions herein, every certificate of authority issued or held under this chapter shall be for an indefinite term and, unless sooner revoked by the commissioner, shall terminate upon occurrence of any of the following:

(a) Upon the holder’s ceasing to exist as a separate entity.

(b) Upon the winding up or dissolution, or expiration or forfeiture of the corporate existence of a corporate holder thereof.

(c) Upon winding up or dissolution of a holder not a corporation.

(d) In any event upon surrender by the holder of its certificate of authority and cancellation of the same by the commissioner.

The commissioner shall not cancel a surrendered certificate of authority until he or she is satisfied by examination, or otherwise, that the former holder has discharged its annuity liabilities to residents of this state or satisfactorily reinsured the same.

Notwithstanding the preceding provisions for a certificate of authority of indefinite term, each holder of a certificate of authority under this chapter shall owe and pay in advance to the commissioner an annual fee of one hundred thirty-six dollars ($136), on account of a certificate of authority until its final termination or revocation. The fee shall be for annual periods commencing on July 1 of each year and ending on June 30 of each year and shall be due on each March 1 and shall be delinquent on and after each April 1.

Each holder of a certificate of authority shall also be subject to the payment in advance of the following fees, as appropriate:

(1) Two hundred eighty-three dollars ($283) for each amended certificate of authority caused by a change of the name of the holder.

(2) Two hundred twelve dollars ($212) for the services and expenses of the commissioner in connection with the filing of amended articles by a holder.

(3) Eight hundred forty-nine dollars ($849) for all services and expenses of the commissioner in connection with the withdrawal of a holder of a certificate of authority under this chapter.

(e) Upon the receipt of a notice of filing of a petition by or against a certificate holder under the United States Bankruptcy Code for bankruptcy or reorganization, the commissioner shall cease imposing, billing, or collecting the annual fees due under this chapter and this section to the certificate holder.

(f) Upon notice of the suspension of the corporate status of the certificate holder for a period of 12 months by the Secretary of State, the commissioner shall terminate the certificate of authority and shall deem the certificate to be terminated.

history: (History: Amended by Stats. 2017, Ch. 534, Sec. 68. (AB 1699) Effective January 1, 2018.)


text:
(a) Before granting a certificate of authority or amended certificate of authority as a grants and annuities society to any applicant, the commissioner shall consider the qualifications of the applicant with respect to the following subjects:

(1) Minimum net worth and working capital.

(2) Lawfulness and quality of investments.

(3) Financial stability.

(4) Reinsurance agreements.

(5) Competency, character, and integrity of management.

(6) Ownership and control.

(7) Fairness and honesty of methods of doing business.

(8) Risk to the public.

(b) Upon consideration of all relevant qualifications, the commissioner shall issue a certificate of authority to an applicant, unless the commissioner finds that the applicant is materially deficient with respect to one or more of the subjects set forth in subdivision (a).

history: (History: Added by Stats. 1993, Ch. 225, Sec. 1. Effective January 1, 1994.)


text:
Upon granting to such organization or person a certificate of authority to receive such transfers, the commissioner shall require it to establish and maintain a reserve fund adequate to meet the future payments under its outstanding annuity contracts and in any event not less than an amount computed as follows:

(a) In the case of annuities payable under agreements made prior to January 1, 1950, in accordance with the standard of valuation based upon McClintock’s table of mortality among annuitants, with interest assumption at 312 percent per annum.

(b) In the case of annuities payable under agreements made on and after January 1, 1950, in accordance with the standard of valuation based upon the 1937 Standard Annuity Table, with interest assumption at 212 percent per annum, or other table of mortality derived from recent annuity experience, with interest assumption not higher than is currently yielded on safe securities, as may be prescribed by the commissioner.

For any failure on its part to establish and maintain such reserve fund, the commissioner shall revoke its certificate of authority.

history: (History: Amended by Stats. 1949, Ch. 338.)


text:
(a) The funds and other property, together with interest and dividends thereon and proceeds therefrom, conditioned upon issuance of the certificate holder’s contracts to pay annuities, shall be maintained under a separate trust agreement for reserves held for the benefit of California annuitants and shall be held legally and physically segregated from the other assets of the certificate holder. The amendments to this subdivision enacted during the 1993 portion of the 1993–94 Regular Session shall apply to any organization that is issued a new certificate of authority on or after January 1, 1994. Any grants and annuities society that holds a certificate of authority on January 1, 1994, and that is not in compliance with this subdivision as of that date, shall comply with these amendments by January 1, 1998.

(b) Nothing in subdivision (a) shall prevent the certificate holder from withdrawing from time to time, pursuant to an appropriate resolution of its board of trustees, that amount or amounts as are determined, in a manner which is satisfactory to the commissioner, to be excess over and above its reserve required to be maintained under the provisions of Section 11521.

(c) If the grants and annuities society will manage and direct investment of the reserve funds required under Section 11521, the California reserves may be held under a declaration of trust stating that the grants and annuities society will hold the funds in trust and invest funds or property held in trust in accordance with the requirements of this code. If a bank will manage or direct the investment of the California reserves fund, a trust agreement shall be executed with that institution that will act as a trustee.

history: (History: Amended by Stats. 1993, Ch. 225, Sec. 2. Effective January 1, 1994.)