text:
(a) As used in this section:

(1) “Carrier” means a specialized health care service plan, and any of the following entities which offer coverage comparable to the coverages offered by a specialized health care service plan: an insurer issuing group disability coverage; a nonprofit hospital service plan; or other entity responsible for either the payment of benefits for or the provision of services under a group contract.

(2) “Insolvency” means that the Director of the Department of Managed Health Care has determined that the specialized health care service plan is not financially able to provide specialized health care services to its enrollees and (A) the Director of the Department of Managed Health Care has taken an action pursuant to Section 1386, 1391, or 1399 of the Health and Safety Code, or (B) an order requested by the commissioner or the Attorney General has been issued by the superior court under Section 1392, 1393, or 1394.1 of the Health and Safety Code.

(3) “Specialized health care service plan” means any plan authorized to issue only specialized health care service plan contracts as defined in Section 1345 of the Health and Safety Code.

(b) In the event of the insolvency of a specialized health care service plan, upon order of the commissioner which shall be issued following his or her receipt of a notice issued by the Director of the Department of Managed Health Care pursuant to Section 1394.8 of the Health and Safety Code, all carriers that participated in the enrollment process with the insolvent specialized health care service plan at a group’s last regular open enrollment period for the same type of specialized health care service benefits shall offer the group’s enrollees in the insolvent specialized health care service plan a 30-day enrollment period commencing upon the date of insolvency. Each such carrier shall offer enrollees of the insolvent specialized health care service plan the same specialized coverage and rates that it had offered to the enrollees of the group at its last regular open enrollment period.

history: (History: Amended by Stats. 2000, Ch. 857, Sec. 58. Effective January 1, 2001.)

article: 14.8. Group Enrollment from Health Care Service Plans


kind: section

code: INS

text:
(a) The commissioner shall have the administrative authority to assess penalties against any person, including a natural person or other entity, for violations of this article.

(b) Upon a showing of a violation of this article in any civil action, a court may also assess the penalties prescribed in this section.

(c) Whenever the commissioner has reasonable cause to believe or determines after a public hearing that any person has violated this article he or she shall make and serve upon the person an notice of hearing. The notice shall state the commissioner’s intent to assess the administrative penalties, the time and place of the hearing, and the conduct, condition or grounds upon which the commissioner is holding the hearing and assessing the penalties. The hearings shall occur within 30 days after the notice is served. Within 30 days after the hearing the commissioner shall issue an order specifying the penalty. The penalties resulting from the hearing shall be paid to the Insurance Fund, but may be spent only when appropriated by the Legislature.

(d) Any person who violates this article is liable for administrative penalties of no less than twenty-five thousand dollars ($25,000).

history: (History: Added by Stats. 1990, Ch. 1043, Sec. 11.)

division: 1. GENERAL RULES GOVERNING INSURANCE

part: 2. THE BUSINESS OF INSURANCE

chapter: 1. General Regulations

path: 1. GENERAL RULES GOVERNING INSURANCE > 2. THE BUSINESS OF INSURANCE > 1. General Regulations > 14.8. Group Enrollment from Health Care Service Plans


citation: INS § 1070

text: Any insurer, upon payment of the fees and costs therefor and surrender to the commissioner of its certificate of authority, may apply to withdraw from this State. Such application shall be in writing, duly executed, accompanied by evidence of due authority for such execution, and properly acknowledged.

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

article: 15. Withdrawal of Insurers

path: 1. GENERAL RULES GOVERNING INSURANCE > 2. THE BUSINESS OF INSURANCE > 1. General Regulations > 15. Withdrawal of Insurers


text: Whenever an admitted insurer fails to take any step necessary to maintain continuance of its certificate of authority, or whenever the certificate of authority admitting an insurer is canceled or revoked, or whenever an admitted insurer as an entity ceases doing an insurance business in this state for any reason, such insurer shall apply to withdraw as an insurer and shall withdraw as such insurer from this state pursuant to this article. Every certificate of authority hereafter granted is so granted subject to this withdrawal requirement. Acceptance of every such certificate of authority is an agreement by the accepting insurer that it will conform to the provisions of this article.

history: (History: Amended by Stats. 1965, Ch. 1191.)

article: 15. Withdrawal of Insurers


text:
The withdrawal procedure and fees prescribed by this article shall not be required of a nonsurviving admitted constituent to a merger or consolidation into another admitted insurer in accordance with the applicable statutes and the commissioner’s prior written consent given pursuant to subdivision (c) of Section 1011, provided the commissioner is satisfied by documents, authenticated so as to be admissible in evidence over objection, filed with him or her, that:

(a) The constituent has discharged all of its liabilities to residents of this state in the manner provided by Section 1071.5;

(b) There will be an admitted insurer directly available to the constituent’s policyholders: (1) to obtain policy changes and endorsements, (2) to receive payment of premiums and refund unearned premiums, (3) to serve notice of claim, proof of loss, summons, process, and other papers, and (4) for purposes of suit;

(c) The constituent shall timely file with the commissioner appropriate financial statements reporting its insurance business done in this state during the calendar year of the merger or consolidation and all appropriate tax returns required by law for the period, and shall timely pay all taxes found to be due on account of the business; and

(d) The constituent has surrendered its current California certificate of authority to the commissioner for cancellation as of the effective date of the merger.

The withdrawal procedure and fees prescribed by this article shall not be required of an insurer that has been liquidated by a final order of a court of record of this or any sister state provided a certified copy of the order reciting the fact of liquidation and discharge of all obligations has been filed with the commissioner.

history: (History: Amended by Stats. 2013, Ch. 321, Sec. 11. (AB 1391) Effective January 1, 2014.)

article: 15. Withdrawal of Insurers


citation: INS § 1071

text: The commissioner shall publish such application for withdrawal, daily, for one week, in each of two daily newspapers of general circulation, one published in the city of San Francisco, and the other in the city of Sacramento. The expense of such publication shall be paid in advance by the insurer.

article: 15. Withdrawal of Insurers


text: Every insurer which withdraws as an insurer, or is required to withdraw as an insurer, from this State shall, prior to such withdrawal, discharge its liabilities to residents of this State. In the case of its policies insuring residents of this State it shall cause the primary liabilities under such policies to be reinsured and assumed by another admitted insurer. In the case of such policies as are subject to cancellation by the insurer, it may cancel such policies pursuant to the terms thereof in lieu of such reinsurance and assumption.

history: (History: Added by Stats. 1945, Ch. 1041.)

article: 15. Withdrawal of Insurers


citation: INS § 1072

text: The commissioner shall make, or cause to be made by the insurance authority of the State where the insurer is organized, an examination of the books and records of the insurer. If, upon such examination, he finds that the insurer has no outstanding liabilities to residents of this State and no policies in favor of the residents of this State uncanceled or the primary liabilities under which have not been reinsured and assumed by another admitted insurer, as required by Section 1071.5, he shall cancel the insurer’s certificates of authority, if unexpired, and he shall permit the insurer to withdraw. The commissioner may, in his discretion, waive any or all of the above requirements if, after such examination, he finds it to be in a solvent condition. The cost and expense of all such examinations shall be paid as prescribed in Section 736.

history: (History: Amended by Stats. 1947, Ch. 1008.)

article: 15. Withdrawal of Insurers


citation: INS § 1073

text: Whenever any insurer withdraws from business in this State, and whenever for any reason the commissioner revokes or cancels the certificate of authority admitting any insurer, the commissioner shall thereafter cause a notice of the revocation, cancellation or withdrawal to be published in one daily newspaper published in the city of San Francisco and one daily newspaper published in the city of Los Angeles. The expense of such publication shall be paid by the insurer.

article: 15. Withdrawal of Insurers


citation: INS § 1074

text: Upon the failure of such insurer to pay the expense of such advertising within thirty days after the presentation of the bill therefor, the commissioner shall collect such fee from the surety in the bond furnished in accordance with the provisions of Article 12 of this chapter or out of securities furnished thereunder.

article: 15. Withdrawal of Insurers


citation: INS § 1076

text: The withdrawing insurer shall pay to the commissioner a fee of one thousand four hundred ten dollars ($1,410) for all services and expenses in connection with the withdrawal.

history: (History: Amended by Stats. 2017, Ch. 534, Sec. 19. (AB 1699) Effective January 1, 2018.)

article: 15. Withdrawal of Insurers


citation: INS § 1077

text:
As used in this article:

(a) “Insurer” means and includes every person engaged as indemnitor, surety, or contractor in the business of entering into contracts of life or disability insurance or of annuities.

(b) “Exceeded its powers” means any of the following conditions:

(1) The insurer has refused to permit examination of its books, papers, accounts, records, or affairs by the commissioner, his or her deputies, employees, or duly commissioned examiners.

(2) A domestic insurer has unlawfully removed from this state books, papers, accounts, or records necessary for an examination of the insurer.

(3) The insurer has failed to promptly comply with the applicable financial reporting statutes or rules and departmental requests relating thereto.

(4) The insurer has neglected or refused to observe an order of the commissioner to make good, within the time prescribed by law, any prohibited deficiency in its capital, capital stock, or surplus.

(5) The insurer is continuing to transact insurance or write business after its license has been revoked or suspended by the commissioner.

(6) The insurer, by contract or otherwise, has unlawfully, or has in violation of an order of the commissioner, or has without first having obtained written approval of the commissioner, if approval is required by law, done any of the following:

(A) Totally reinsured its entire outstanding business.

(B) Merged or consolidated substantially its entire property or business with another insurer.

(7) The insurer engaged in any transaction in which it is not authorized to engage under the laws of this state.

(8) The insurer refused to comply with a lawful order of the commissioner.

(c) “Consent” means agreement to administrative supervision by the insurer.

history: (History: Added by Stats. 1991, Ch. 986, Sec. 8.)

article: 15.5. Administrative Supervision

path: 1. GENERAL RULES GOVERNING INSURANCE > 2. THE BUSINESS OF INSURANCE > 1. General Regulations > 15.5. Administrative Supervision


text:
The provisions of the article shall apply to all of the following:

(a) All domestic life or disability insurers, except the State Compensation Insurance Fund.

(b) Any other life or disability insurer doing business in this state whose state of domicile has asked the commissioner to apply the provisions of this article as regards that insurer.

(c) Notwithstanding subdivision (a), the State Compensation Insurance Fund may give its consent to administrative supervision pursuant to paragraph (5) of subdivision (a) of Section 1077.2.

history: (History: Amended by Stats. 2006, Ch. 740, Sec. 4.6. Effective January 1, 2007.)

article: 15.5. Administrative Supervision


text:
(a) An insurer may be subject to administrative supervision by the commissioner if, upon examination or at any other time it appears in the commissioner’s discretion that any of the following applies:

(1) The insurer’s condition renders the continuance of its business hazardous to the public or to its insureds.

(2) The insurer appears to have exceeded its powers granted under its certificate of authority and applicable law.

(3) The insurer has failed to comply with the applicable provisions of the Insurance Code.

(4) The business of the insurer is being conducted fraudulently.

(5) The insurer gives its consent.

(b) If the commissioner determines that the conditions set forth in subdivision (a) exist, the commissioner shall do all of the following:

(1) Notify the insurer of his or her determination.

(2) Furnish to the insurer a written list of the requirements to abate this determination.

(3) Notify the insurer that it is under the supervision of the commissioner and that the commissioner is applying and effectuating the provisions of the article. The action by the commissioner shall be subject to review pursuant to Section 12940.

(c) If placed under administrative supervision, the insurer shall have 60 days, or another period of time as designated by the commissioner, to comply with the requirements of the commissioner subject to the provisions of this article.

(d) If it is determined after notice and hearing that the conditions giving rise to the supervision still exist at the end of the supervision period specified above, the commissioner may extend the period.

(e) If it is determined that none of the conditions giving rise to the supervision exist, the commissioner shall release the insurer from supervision.

article: 15.5. Administrative Supervision


text:
(a) Notwithstanding any other provision of law, and except as set forth in this section, proceedings, hearings, notices, correspondence, reports, records, and other information in the possession of the commissioner or the department relating to the supervision of any insurer are confidential except as provided by this section.

(b) The personnel of the department shall have access to these proceedings, hearings, notices, correspondence, reports, records, or information as permitted by the commissioner.

(c) The commissioner may open the proceedings or hearings or disclose the notices, correspondence, reports, records, or information to a department, agency, or instrumentality of this or another state of the United States if the commissioner determines that the disclosure is necessary or proper for the enforcement of the laws of this or another state of the United States.

(d) The commissioner may open the proceedings or hearings or make public the notices, correspondence, reports, records, or other information if the commissioner deems that it is in the best interest of the public or in the best interest of the insurer, its insureds, creditors, or the general public.

(e) This section does not apply to hearings, notices, correspondence, reports, records, or other information obtained upon the appointment of a receiver for the insurer by a court of competent jurisdiction.

article: 15.5. Administrative Supervision


text:
During the period of supervision, the commissioner or his or her designated appointee shall serve as the administrative supervisor. The commissioner may provide that the insurer may not do any of the following things during the period of supervision, without the prior approval of the commissioner or his or her appointed supervisor:

(a) Dispose of, convey, or encumber any of its assets or its business in force.

(b) Withdraw any of its bank accounts.

(c) Lend any of its funds.

(d) Invest any of its funds.

(e) Transfer any of its property.

(f) Incur any debt, obligation, or liability.

(g) Merge or consolidate with another company.

(h) Approve new premiums or renew any policies.

(i) Enter into any new reinsurance contract or treaty.

(j) Terminate, surrender, forfeit, convert, or lapse any insurance policy, certificate, or contract, except for nonpayment of premiums due.

(k) Release, pay, or refund premium deposits, accrued cash, or loan values, unearned premiums, or other reserves on any insurance policy, certificate, or contract.

(l) Make any material change in management.

(m) Increase salaries and benefits of officers or directors or the preferential payment of bonuses, dividends, or other payments deemed preferential.

article: 15.5. Administrative Supervision


text: During the period of supervision the insurer may contest an action taken or proposed to be taken by the supervisor specifying the manner wherein the action being complained of would not result in improving the condition of the insurer by requesting reconsideration by the commissioner. Denial of the insurer’s request upon reconsideration entitles the insurer to seek judicial review under Section 12940.

article: 15.5. Administrative Supervision


text: Nothing contained in this article shall preclude the commissioner from initiating judicial proceedings to place an insurer in conservation, rehabilitation, or liquidation proceedings or other delinquency proceedings, however designated under the laws of this state, regardless of whether the commissioner has previously initiated administrative supervision proceedings under this article against the insurer.

article: 15.5. Administrative Supervision


text: The commissioner may adopt reasonable rules necessary for the implementation of this article.

article: 15.5. Administrative Supervision


text: Notwithstanding any other provision of law, the commissioner may meet with a supervisor appointed under this article and with the attorney or other representative of the supervisor, without the presence of any other person, at the time of any proceedings or during the pendency of any proceeding held under authority of this article to carry out the commissioner’s duties under this article or for the supervisor to carry out his or her duties under this article.

article: 15.5. Administrative Supervision


text: There shall be no liability on the part of, and no cause of action of any nature shall arise against, the commissioner or the department or its employees or agents for any action taken by them in the performance of their powers and duties under this article.

article: 15.5. Administrative Supervision


text: The authority granted pursuant to this article is in addition to, and not in lieu of, any other provision of this code.

article: 15.5. Administrative Supervision


citation: INS § 1080

text:
Any domestic incorporated mutual life insurer or disability insurer or life and disability insurer issuing nonassessable policies on a reserve basis may merge, consolidate or otherwise unite with or become a part of, or may reinsure all of its policies with, and, upon the assumption of all of its liabilities, may transfer its assets to, any incorporated mutual insurer admitted to transact the business of life, disability or life and disability insurance in this State. The plan and agreement by which any such transaction is to be effected shall be submitted to the commissioner who shall examine the same and may require such provisions to be inserted in the agreement and such actions to be taken in connection with the transaction as he may deem necessary in order that the transaction shall be mutually fair and equitable between the respective members and policyholders of the companies parties to the transaction.

When any such plan and agreement shall have been approved by the commissioner the same shall be approved in the case of each domestic insurer party to the merger or consolidation or the reinsuring of its policies and transferring of its assets by two-thirds of the votes cast by the members thereof represented in person or by proxy at a meeting called to consider the same. Notice of said meeting and its purpose shall be given by mail at least 30 days before the day fixed for the meeting to members whose insurance shall have been in force for at least one year prior to such meeting, at their addresses appearing on the books maintained at the home office of the company. With respect to those members whose addresses do not appear on such books of the company notice shall be deemed to have been given if published at least once in some newspaper of general circulation in the county in which the principal office of the company is located. At such meeting the presence in person or by proxy of 5 percent of such members of such insurer shall constitute a quorum. In the absence of a quorum the members present at the meeting in person or by proxy may adjourn the meeting to a later date. No further notice need be given of the date to which the meeting is adjourned. If the vote is in the affirmative a certified copy of all proceedings relating to the proposed transaction shall be filed with the commissioner. If one of the insurance companies is a foreign company there shall be filed with the commissioner evidence of such approval, consent or other authorization as may be required by the laws of the state of incorporation of said foreign insurance company evidencing the power of the foreign insurance company to assume and carry out the agreement by which such transaction is effected. If the commissioner finds that the proceedings have been in accordance with the law and his requirements he shall approve the agreement which shall thereupon become effective.

history: (History: Added by Stats. 1957, Ch. 979.)

article: 16. Approval of Reinsurance Plans

path: 1. GENERAL RULES GOVERNING INSURANCE > 2. THE BUSINESS OF INSURANCE > 1. General Regulations > 16. Approval of Reinsurance Plans


citation: INS § 1090

text: An insurer which is insolvent, retiring from business in this state other than by merger or consolidation into an admitted insurer with the commissioner’s prior written consent, or the required paid-in capital of which is impaired, shall not reinsure its business until its plan to effect such reinsurance is first submitted to the commissioner and approved by him.

history: (History: Amended by Stats. 1969, Ch. 1055.)

article: 16. Approval of Reinsurance Plans


citation: INS § 1091

text: The retiring insurer shall pay to the commissioner a fee of one thousand seven hundred ninety-four dollars ($1,794) for filing the documents initiating approval proceedings under this article. If the plan be approved and consummated the retiring insurer shall apply for withdrawal under Article 15 of this chapter and that fee shall also cover the services and expenses of the commissioner in connection with the withdrawal.

history: (History: Amended by Stats. 2017, Ch. 534, Sec. 20. (AB 1699) Effective January 1, 2018.)

article: 16. Approval of Reinsurance Plans


citation: INS § 1100

text: In this state, all investments and deposits of the assets of an insurer, all purchases on behalf of an insurer, and all sales made of the property and effects of an insurer shall be made in its own name, or in that of a corporation authorized to act as a trustee under the laws of this state, or in the name of a nominee of such a corporation in accordance with any law of this state permitting such a trustee to make use of nominees, or in the name of a qualified custodian, qualified subcustodian, or qualified depository (as defined in Section 1104.9) or in the name of a nominee of a qualified custodian, qualified subcustodian, or qualified depository, provided that the nominee is not a corporation and, as to any nominee which is a partnership, the partnership shall consist solely of the employees, officers, or directors of the qualified custodian, qualified subcustodian, or qualified depository or a corporation which is a member of the same holding company system as the nominee, or any combination thereof, or in the name of a nominee approved by the commissioner.

history: (History: Amended by Stats. 1988, Ch. 1466, Sec. 1.5.)

article: 17. Loans and Investments

path: 1. GENERAL RULES GOVERNING INSURANCE > 2. THE BUSINESS OF INSURANCE > 1. General Regulations > 17. Loans and Investments


text:
Every admitted incorporated insurer may under a certificate of authority issued pursuant to the provisions of Article 3 (commencing with Section 699), engage in this state in the type of loan transactions otherwise permitted by law without obtaining any other license or certificate.

Pursuant to the authority contained in Section 1 of Article XV of the State Constitution, the restrictions upon rates of interest contained in Section 1 of Article XV of the California Constitution shall not apply to any obligation of, loans made by, or forbearances of, any incorporated admitted insurer.

This section creates and authorizes incorporated admitted insurers as an exempt class of persons pursuant to Section 1 of Article XV of the Constitution.

history: (History: Amended by Stats. 1981, Ch. 979, Sec. 1.)

article: 17. Loans and Investments


citation: INS § 1101

text:
(a) An admitted insurer’s officers, directors, trustees, and any persons who have authority in the management of the insurer’s funds, shall not, unless otherwise provided in this code:

(1) Receive any money or valuable thing for negotiating, procuring, recommending, or aiding in, any purchase by or sale to such insurer of any property, or any loan from such insurer.

(2) Be pecuniarily interested as principal, coprincipal, agent, attorney, or beneficiary, in any such purchase, sale, or loan.

(3) Directly or indirectly purchase, or be interested in the purchase of, any of the assets of the insurer.

(b) This section shall not apply to:

(1) The purchase or exchange of stock of an admitted insurer by an admitted insurer or between admitted insurers nor to any merger, consolidation, or corporate reorganization of such insurers, and shall not apply as to such purchase, merger, exchange, consolidation, or reorganization, nor to the officers, directors, trustees, or any persons having authority in the management of such insurers funds in respect to any such transaction, and no such transaction shall be either void or voidable, if:

(i) The transaction is just and reasonable as to the insurers involved at the time it is authorized or approved and if no such officer, director, trustee, or other person having authority in the management of such insurers funds receives any money or other valuable thing, other than his or her usual compensation for his or her regular duties, for negotiating, procuring, recommending, or aiding in such transaction, and, either of the following apply:

(ii) Any interest in such transaction on the part of any officers, directors, trustees, or persons who have authority in the management of any such insurer’s funds is disclosed or known to its board of directors or committee, authorizing, approving, or ratifying the transaction, and noted in the minutes thereof, and the board or committee authorizes, approves, or ratifies the transaction in good faith by a vote sufficient for the purpose without counting the vote or votes of any interested officers, directors, trustees, or persons who have authority in the management of the funds of any such insurer.

(iii) The fact of such interest is disclosed or known to the shareholders in the case of a stock insurance company, or in the case of a mutual insurer to the policyholders, and they approve or ratify the transaction in good faith by a vote or written consent of a majority of the shares or policyholders, as the case may be, entitled to vote, unless the consent or vote of more than a majority is otherwise required, in which event the vote or written consent shall be that so otherwise required.

Any such officer, director, trustee, or other person who has such interest may be counted in determining the presence of a quorum at any meeting that authorizes, approves, or ratifies such transaction.

(2) Any transaction relating to an insurer if the transaction meets the other requirements of subdivision (b) and such officers, directors, and trustees of the insurer do not in the aggregate own more than 5 percent of the stock of any corporation with which the insurer is entering into a transaction.

(3) Any transaction if prior to its consummation the insurer has applied for and obtained from the commissioner a certificate of exemption in respect to the specific transaction therein described and such transaction is consummated in conformity with such certificate and the representations and disclosures made in, or in connection with, the application therefor.

(4) To obtain the certificate of exemption the insurer shall file with the commissioner a written application, accompanied by a filing fee of seven hundred five dollars ($705). The application shall be verified as provided in Section 834, be in a form as the commissioner shall require and shall contain all of the following:

(A) A specific description of the particular transaction for which the certificate is sought.

(B) Copies of all contracts and other legal documents involved or to be involved in the transaction.

(C) A description of all assets involved in the transaction.

(D) The names, titles, capacities, and business relationships of all persons in any way involved in the transaction who are connected with the insurer or any of its affiliates, officers, directors, managers, or controlling persons or entities in any of the capacities described in this section.

(E) A description of any and all considerations on either or any side of the transaction.

(F) Evidence that its governing board has specifically authorized the filing of the application.

(G) Such other information, opinions, or matters as the commissioner may require.

The commissioner may issue such certificate of exemption if he or she finds, with or without a hearing, that the transaction is fair, just, and equitable, and not hazardous to policyholders, stockholders, or creditors. The commissioner may impose such conditions, including, but not limited to, disclosure of the circumstances and terms of the transaction either before or after its consummation either publicly or to such persons and entities as he or she may designate and the approval of the transaction by such persons or entities as he or she may designate. He or she may also require that a report of the transaction be filed with him or her subsequent to its consummation in such form and containing such information as he or she may prescribe.

The certificate of exemption issued pursuant to paragraph (3) of subdivision (b) shall only exempt the transaction from the prohibitions of this section and shall not affect the rights or remedies of any persons under any other law.

The amendment made to this section at the 1955 General Session shall not apply to contracts, sales, transfers, or other transactions entered into prior to the effective date hereof.

The commissioner shall not issue a certificate of exemption under paragraph (3) of subdivision (b) in respect to any transaction consummated prior to the effective date of the amendment made to this section at the 1967 Regular Session.

(c) Whenever it appears to the commissioner that any insurer, or any director, officer, employee, or agent thereof, has committed or is about to commit a violation of this section, the commissioner may apply to the superior court for the county in which the principal office of the insurer is located, or if such insurer has no such office in this state, then to the Superior Court for the County of Los Angeles, or for the City and County of San Francisco, for an order enjoining such insurer, or such director, officer, employee, or agent thereof, from violating or continuing to violate this section, and for such other equitable relief as the nature of the case and the interests of the insurer’s policyholders, creditors, and shareholders or the public may require.

history: (History: Amended by Stats. 2017, Ch. 534, Sec. 21. (AB 1699) Effective January 1, 2018.)

article: 17. Loans and Investments


text: An officer, excluding a director who holds no other office, or employee of an admitted insurer shall not receive any money or valuable thing directly or indirectly as a brokerage commission on reinsurance ceded by such insurer and an insurer shall not pay such commissions. This provision shall not apply to brokerage or commissions authorized by the board of directors of the ceding insurer as compensation for services actually rendered nor to dividends received by any such officer or employee upon the stock of a corporation in which such officer or employee or his immediate family does not own a controlling interest or in fact exercises control.

history: (History: Added by Stats. 1951, Ch. 592.)

article: 17. Loans and Investments


citation: INS § 1102

text: The financial obligation of any officer, director, trustee, or other person having authority in the management of an insurer’s funds shall not be guaranteed by such insurer in any capacity, and any such guarantee shall be void.

history: (History: Amended by Stats. 1937, Ch. 736.)

article: 17. Loans and Investments


citation: INS § 1103

text: Whenever an insurer is injured or made to suffer loss by reason of any violation of the provisions of sections 1101, 1102 or 1104, such insurer may recover from the guilty officer, director, trustee or other person, or any one or more of them jointly or severally damages sufficient to compensate such insurer for such loss.

article: 17. Loans and Investments


citation: INS § 1104

text:
An admitted insurer shall not make any loan, other than a policy loan, to any officer, director, trustee or other person having authority in the management of its funds, nor shall such officer, director, trustee or other person accept any such loan.

This section does not prohibit a loan to, or for the benefit of, an employee for the purpose of paying the premiums on a life insurance policy on the life of such employee.

history: (History: Amended by Stats. 1963, Ch. 1929.)

article: 17. Loans and Investments


text:
The commissioner may from time to time require any domestic admitted insurer to report to him, in such detail as he may prescribe, the moneys and securities owned by it, the place where such moneys and securities are deposited and, in the case of moneys and securities deposited outside the State, the reason for maintaining each such deposit outside the State.

Whenever the commissioner after hearing following notice, finds that such moneys or securities are maintained on deposit outside the State in excess of legal requirements and of the reasonable needs of the business of such insurer, he may order such insurer to transfer to, and maintain in, this State money and securities to the extent of such excess and to cease, pending such transfer, from unnecessary transfers of moneys and securities from this State to any place outside this State.

history: (History: Added by Stats. 1947, Ch. 1073.)

article: 17. Loans and Investments


text: Every person who is directly or indirectly the beneficial owner of more than 10 percent of any class of stock of a domestic insurer or who is a director or officer of such insurer shall file in the office of the Insurance Commissioner on or before the 31st day of October, 1965, or within 10 days after he becomes such a beneficial owner, director or officer, a statement, in such form as the commissioner may prescribe, of the amount of all stock of such insurer of which he is the beneficial owner, and within 10 days after the close of each calendar month thereafter, if there has been a change in such ownership during such month, shall file in the office of the commissioner a statement, in such form as the commissioner shall prescribe, indicating his ownership at the close of the calendar month and such changes in his ownership as have occurred during such calendar month.

history: (History: Added by Stats. 1965, Ch. 38.)

article: 17. Loans and Investments


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

history: (History: Amended by Stats. 1967, Ch. 1074.)

article: 17. Loans and Investments


text: It shall be unlawful for any beneficial owner of an insurer, or director or officer thereof, described in Section 1104.2, to, directly or indirectly, sell any stock of such insurer if he or his principal does not own the stock sold, or, if he or his principal owns the stock, he does not deliver it against such sale within 20 days thereafter, or does not within five days after such sale deposit it in the mails or other usual channels of transportation; but no person shall be deemed to have violated this section if he proves that notwithstanding the exercise of good faith he was unable to make such delivery or deposit within such time, or that to do so would cause undue inconvenience or expense.

article: 17. Loans and Investments


text: The provisions of Section 1104.3 shall not apply to any purchase and sale, or sale and purchase, and the provisions of Section 1104.4 shall not apply to any sale of stock of a domestic insurer (not then or theretofore held in an investment account), by a dealer in the ordinary course of his business and incidental to the establishment or maintenance by him of a primary or secondary market (other than on an exchange as defined in the Securities Exchange Act of 1934) for such stock. The commissioner may, by such rules and regulations as he deems necessary or appropriate in the public interest, define and prescribe terms and conditions with respect to stock held in an investment account and transactions made in the ordinary course of business and incident to the establishment or maintenance of a primary or secondary market.

article: 17. Loans and Investments


text: The provisions of Sections 1104.2, 1104.3, and 1104.4 shall not apply to foreign or domestic arbitrage transactions unless made in contravention of such rules and regulations as the commissioner may adopt in order to carry out the purposes of this article.

article: 17. Loans and Investments


text: The term “stock” as it is used in Sections 1104.2, 1104.3, 1104.4, 1104.5 and 1104.8 means any stock or similar security, or any security, convertible, with or without consideration, into such stock or carrying any warrant or right to subscribe to or purchase such stock, or any such warrant or right, or any other security which the commissioner shall deem to be of similar nature and consider necessary or appropriate, by such rules and regulations as he may prescribe in the public interest or for the protection of investors, to treat as stock.

article: 17. Loans and Investments


text:
The provisions of Sections 1104.2, 1104.3, and 1104.4 shall not apply to a domestic insurer if:

(a) Its stock shall be registered, or shall be required to be registered, pursuant to Section 12 of the Securities Exchange Act of 1934, as amended; or if

(b) Such domestic insurer shall not have any class of its stock held of record by 100 or more persons on the last business day of the year next preceding the year in which stock of the insurer would be subject to the provisions of Sections 1104.2, 1104.3, and 1104.4 except for the provisions of this subdivision.

article: 17. Loans and Investments


text:
(a) (1) As used in this section, “qualified custodian” means: (A) commercial banks (as defined in Section 105 of the Financial Code), savings and loan associations (as defined in Section 5102 of the Financial Code), and trust companies (other than trust departments of title insurance companies), or any entity approved by the commissioner as a qualified custodian; (B) that is either (i) domiciled and has a principal place of business in this state or (ii) a national banking association with a trust office located in this state; and (C) that either has a net worth of at least one hundred million dollars ($100,000,000) or is able to demonstrate to the satisfaction of the commissioner that it is financially secure. The commissioner may consider, among other factors, evidence of the following in order to determine whether a custodian is financially secure for the purpose of this subdivision: (i) its obligations under an agreement approved by the commissioner pursuant to subdivision (c) are guaranteed by its parent holding company, (ii) its parent holding company has a net worth of at least one hundred million dollars ($100,000,000), or (iii) it is a member of a holding company system with a net worth of at least one hundred million dollars ($100,000,000).

(2) (A) As used in this section, “qualified depository” means an entity that is located in this state or a reciprocal state and is (i) a depository that provides for the long-term immobilization of securities or a clearing corporation that is also a depository, and that in either case has been approved by or registered with the United States Securities and Exchange Commission, (ii) a Federal Reserve bank, or (iii) an entity approved by the commissioner as a qualified depository.

(B) A “qualified depository” may also include an entity that is located outside the United States, if it is a securities depository and clearing agency, incorporated or organized under the laws of a country other than the United States, (i) that operates a transnational system for securities or equivalent book entries (specifically Euroclear and Cedel, or successors to all or substantially all of their operations), or (ii) that operates a central system for securities or equivalent book entries, but solely for securities issued by, or by entities within, the country in which the securities depository and clearing agency is incorporated or organized. The depository shall meet all qualifying requirements imposed by this section upon Euroclear or Cedel.

(3) As used in this section, “qualified subcustodian” means an entity located in this state or a reciprocal state (A) that holds securities of the domestic insurer, and maintains an account through which the securities are held, in this state or a reciprocal state and (B) that has shareholder equity of at least one hundred million dollars ($100,000,000) or is able to demonstrate to the satisfaction of the commissioner that it is financially secure. The qualified subcustodian shall be: (A) a commercial bank, a savings and loan association, or a trust company (other than trust departments of title insurance companies); (B) a subsidiary of a qualified custodian; or (C) any entity approved by the commissioner as a qualified subcustodian. The commissioner may consider, among other factors, evidence of the following in order to determine whether a subcustodian is financially secure for the purpose of this subdivision: (i) its obligations are guaranteed by its parent company, (ii) its parent holding company has shareholder equity of at least one hundred million dollars ($100,000,000), or (iii) it is a member of a holding company system with shareholder equity of at least one hundred million dollars ($100,000,000). A “qualified subcustodian” may also include an entity that is located outside the United States that is used by the domestic insurer for the purpose of obtaining access to a qualified depository located outside the United States. The qualified foreign subcustodian shall be a banking institution or trust company, incorporated or organized under the laws of a country other than the United States, that is regulated by that country’s government or an agency thereof, and that has shareholders’ equity in excess of two hundred million dollars ($200,000,000), whether in United States dollars or the equivalent of United States dollars, as of the close of its most recently completed fiscal year; or a majority-owned direct or indirect subsidiary of a qualified United States bank or bank holding company, if the subsidiary is incorporated or organized under the laws of a country other than the United States and has shareholders’ equity in excess of one hundred million dollars ($100,000,000), whether in United States dollars or the equivalent of United States dollars, as of the close of its most recently completed fiscal year; or is able to demonstrate to the satisfaction of the commissioner that it is financially secure. The commissioner may consider, among other factors, evidence of the following in order to determine whether a qualified foreign subcustodian is financially secure for purposes of this subdivision: (i) its obligations are guaranteed by its parent company, (ii) its parent holding company has shareholder equity of at least two hundred million dollars ($200,000,000), or (iii) it is a member of a holding company system with shareholder equity of at least two hundred million dollars ($200,000,000).

(4) As used in this section, “subsidiary” means: (A) an entity all of whose voting securities (other than director qualifying shares, if any) are owned, directly or indirectly, by a qualified custodian; or (B) any affiliated entity approved by the commissioner as a subsidiary of a qualified custodian. For the purpose of this section, an affiliated entity means an entity that (A) controls or is controlled, either directly or indirectly or through one or more intermediaries, by a qualified custodian or (B) is under the common control, directly or indirectly, as or with a qualified custodian.

(5) As used in this section, “entity approved by the commissioner as a qualified custodian,” “entity approved by the commissioner as a qualified depository,” “entity approved by the commissioner as a qualified subcustodian,” and “entity approved by the commissioner as a subsidiary of a qualified custodian” mean those entities that meet the conditions or standards established by the commissioner. The commissioner shall charge and collect in advance a one-time fee of two thousand two hundred forty-one dollars ($2,241) to review an application for approval of any entity pursuant to this section.

(6) As used in this section, “reciprocal state” has the same meaning as in subdivision (f) of Section 1064.1.

(7) As used in this section, “moneys” means cash held incidental to securities transactions occurring in the ordinary course of business with respect to securities held pursuant to the custodial agreements under this section.

(8) (A) Except as provided in subparagraph (B), as used in this section, “insurer,” “domestic insurer,” and “domestic admitted insurer” mean any insurer, other than a domestic life insurer that is incorporated or that has its principal place of business in this state. Except as provided in subparagraph (B), no portion of this section applies to domestic life insurers nor shall this section affect the interpretation of any other portion of this code with respect to domestic life insurers nor is it intended to create a precedent for the application of its provisions to those insurers. However, the exclusion of domestic life insurers from this section shall not be construed to diminish the commissioner’s existing authority over those insurers under any other provision of this code.

(B) Domestic life insurers that are wholly owned by any insurer other than a domestic life insurer or are part of an insurance holding company system whose other insurer affiliates are not domestic life insurers may elect to be subject to this section by affirmatively stating that election in the statement otherwise required to be filed by that system pursuant to Section 1215.4.

(b) Notwithstanding Section 1104.1, a domestic admitted insurer may maintain its securities and moneys in a reciprocal state, subject to the requirements of this section, through a custodian account located in California in or with a qualified custodian, and that qualified custodian may maintain those securities or moneys in a qualified depository or qualified subcustodian, either or both of which may be located in a reciprocal state. In addition, a domestic insurer that has foreign investments or any other investments that require delivery outside of the United States upon sale or maturity that qualify under Section 1240, 1241, or 10506, or any other provision of this code, may maintain those securities or moneys in or with a qualified depository located in a jurisdiction outside the United States. However, the aggregate amount of general account investments so deposited shall not exceed the lesser of 5 percent of the total admitted assets of the insurer or 25 percent of the excess of admitted assets over the sum of paid-up capital, liabilities, and surplus required by Section 700.02. However, unless exempted by the commissioner, not more than 50 percent of that amount of assets that an insurer is authorized to invest pursuant to Section 1241 or 1241.1 may be maintained in any single country in a qualified depository as defined in clause (ii) of paragraph (2) of subdivision (a) and as to life companies not more than 12.5 percent of that amount of assets that an insurer is authorized to invest pursuant to Section 1241 or 1241.1 may be maintained in any single country in a qualified depository as defined in clause (ii) of paragraph (2) of subdivision (a). The percentage or dollar value of admitted assets and paid-up capital and liabilities shall be determined by the insurer’s last preceding annual statement of conditions and affairs made as of the preceding December 31 that has been filed with the commissioner pursuant to law. A broker or agent, as defined in the Federal Securities Exchange Act of 1934 (15 U.S.C. Sec. 78c et seq.), may not serve as a qualified custodian, qualified subcustodian, or qualified depository under this section. However, no otherwise qualified custodian or subcustodian shall be disqualified on account of its activities as a broker or dealer, as so defined, when the activities are incidental to its custodial or other business.

(c) Securities shall not be deposited in or with a qualified custodian, qualified depository, or qualified subcustodian except as authorized by an agreement between the insurer and the qualified custodian, if the agreement is satisfactory to and has been approved by the commissioner. The agreement shall require that the securities be held by the qualified custodian for the benefit of the insurer and that the books and records of the qualified custodian shall so designate. The agreement shall further require that beneficial title to the securities remain in the insurer and shall require that the qualified subcustodian and qualified depository be the agents of the qualified custodian. The agreement shall also specifically require that the qualified custodian shall exercise the standard of care of a professional custodian engaged in the banking or trust company industry and having professional expertise in financial and securities processing transactions and custody would observe in these affairs. This section does not affect the burden of proof under applicable law with respect to the assertion of liability in any claim, action, or dispute alleging any breach of, or failure to observe, that standard of care.

(d) An agreement between the qualified custodian and the insurer shall not be approved by the commissioner unless the qualified custodian agrees therein to comply with this section. Except when the agreement is submitted in conjunction with an application for an original certificate of authority or variable life and variable annuity qualification, a fee of seven hundred forty-eight dollars ($748) shall be paid to the commissioner at the time of filing the agreement for approval. However, a fee shall not be required if the form of the agreement has been previously submitted for approval and approved by the commissioner as certified by the insurer and qualified custodian submitting the agreement to the commissioner. The agreement shall be deemed approved unless, within 60 days after receipt by the commissioner of that agreement and any required filing fee, the commissioner has disapproved the agreement in writing citing specific reasons for disapproval.

(e) Notwithstanding the maintenance of securities with an out-of-state qualified depository or qualified subcustodian pursuant to agreement, if the commissioner has reasonable cause to believe that the domestic insurer (1) is conducting its business and affairs in a manner as to threaten to render it insolvent, or (2) is in a hazardous condition or is conducting its business and affairs in a manner that is hazardous to its policyholders, creditors, or the public, or (3) has committed or is committing or has engaged or is engaging in any act that would constitute grounds for rendering it subject to conservation or liquidation proceedings, or if the commissioner determines that irreparable loss and injury to the property and business of the domestic insurer has occurred or may occur unless the commissioner acts immediately, then the commissioner may, without hearing, order the insurer and the qualified custodian promptly to effect the transfer of the securities back to a qualified custodian, qualified subcustodian, or qualified depository located in this state from any qualified depository or qualified subcustodian located outside of this state (the transfer order). Upon receipt of the transfer order, the qualified custodian shall promptly effect the return of the securities. Notwithstanding the pendency of any hearing or action provided for in subdivision (f), the transfer order shall be complied with by those persons subject to that order. Any challenge to the validity of the transfer order shall be made in accordance with subdivision (f). It is the responsibility of both the insurer and the qualified custodian to oversee that compliance with the transfer order is completed as expeditiously as possible. Upon receipt of a transfer order, there shall be no trading of the securities without specific instructions from the commissioner until the securities are received in this state, except to the extent trading transactions are in process on the day the transfer order is received by the insurer and the failure to complete the trade may result in loss to the insurer’s account. Issuance of a transfer order does not affect the qualified custodian’s liabilities with regard to the securities that are the subject of the order.

(f) At the same time the transfer order is served, the commissioner shall issue and also serve upon the insurer a notice of hearing to be held at a time and place fixed therein which shall not be less than 20 nor more than 45 days after the service thereof. Upon request of the insurer and agreement of the department, the hearing may be held within a shorter time but in no event less than 10 days after the service of the notice of hearing. The transfer order and notice of hearing may be served by certified mail, express mail, messenger, telegram, or any other means calculated to give prompt actual notice to (1) the California office of the insurer designated in the agreement, its home office as shown on its most recently filed annual or quarterly statement, or its California agent for service of process; and (2) the California office of the qualified custodian designated in the agreement. If, as a result of the hearing, any of the statements as to conduct, conditions, or grounds for the transfer order are found to be true, or if other conditions or grounds are discovered or become known at the hearing and are found to be true, the commissioner shall affirm the transfer order and may make additional order or orders, pertaining to the transfer order, as may be reasonably necessary.

The insurer subject to the transfer order is entitled to judicial review in the state of the commissioner’s order issued as a result of the hearing.

Alternatively, at any time prior to the commencement of the hearing on the transfer order, the insurer may waive the hearing and have judicial review in this state of the transfer order by petition for writ of mandate and declaratory relief without first exhausting administrative remedies or procedures. In that event the insurer is not entitled to any extraordinary remedies prior to trial.

No person other than the insurer has standing at the hearing by the commissioner or for any judicial review of the transfer order.

history: (History: Amended by Stats. 2020, Ch. 184, Sec. 5. (SB 1255) Effective January 1, 2021.)

article: 17. Loans and Investments


citation: INS § 1105

text:
This article shall not prevent:

(a) The purchase by any person of any asset which the commissioner requires to be sold, at a price approved by the commissioner.

(b) The borrowing in accordance with its terms by any person upon a policy of life insurance upon his own life.

(c) The payment of a fee to any attorney for legal services rendered to any such insurer.

(d) The receipt of advances under agency contracts by agents of life insurers.

(e) Any admitted insurer’s officers, directors, trustees or other persons who have authority in the management of the funds of such insurer from entering into any transaction with such insurer if:

(1) Such transaction is pursuant to a permit issued by the Insurance Commissioner under authority granted to him by other provisions of this code or is such as requires his approval prior to its consummation under other provisions of this code;

(2) The application for any such permit or the request for any such approval sets forth under oath the complete details concerning all such transactions with any such officers, directors, trustees or other persons; and

(3) Where the commissioner in his permit or approval specifically finds that the consummation of such transaction will not be unfair, unjust or inequitable to such insurer or to any of its stockholders or policyholders.

(f) Any transaction between an insurer and a person having authority in the management of the insurer’s funds (except officers, directors, and trustees), if such insurer is subject to registration and reporting under the Insurance Holding Company System Regulatory Act (Article 4.7 (commencing with Section 1215) of Chapter 2 of this part), or subject to substantially similar registration and reporting requirements under the laws of its domicile.

(g) An admitted insurer making a loan for the purchase of a principal residence by, and acquiring, at a price not to exceed the fair market value thereof, the principal residence from, an officer or person having authority in management of the insurer’s funds, nor shall such officer or person be prohibited from accepting such loan or acquisition, in connection with the relocation of the place of employment at the request of the insurer, either during the course of employment or upon initial employment of such officer or person having authority in management of the insurer’s funds.

Any loan permitted under this subdivision shall be secured by a first trust deed or first mortgage, shall not exceed 90 percent of the fair market value of the property, shall carry an interest rate no more favorable than that rate given to other employees of such insurer not subject to the limitations of this article and shall be subject to the approval of the insurer’s board of directors or delegated committee thereof.

This subdivision shall not apply to directors and trustees of insurers.

history: (History: Amended by Stats. 1980, Ch. 812, Sec. 1.)

article: 17. Loans and Investments


citation: INS § 1106

text: Any person violating, or wilfully aiding another in the violation of, Sections 1101, 1101.1, 1102, 1103, 1104 or the commissioner’s order issued pursuant to Section 1104.1 is guilty of a misdemeanor. The commissioner shall, after a hearing upon due notice, revoke, or deny the renewal of, the certificate of authority of a domestic admitted insurer persisting for more than 60 days from and after the commissioner’s order issued pursuant to Section 1104.1 in failure to comply with such order. The proceedings shall be conducted in accordance with Chapter 5 of Part 1 of Division 3 of Title 2 of the Government Code and the commissioner shall have the powers granted therein.

history: (History: Amended by Stats. 1951, Ch. 592.)

article: 17. Loans and Investments


citation: INS § 1107

text: In accordance with either subdivision (e) of Section 1001 or Section 1101.1 of the Corporations Code, an insurer may apply for the insurance commissioner’s approval of the terms and conditions of the covered transactions and the fairness of such terms and conditions to deliver consideration other than securities which shall be in such form, contain such information and be accompanied by such documents as the commissioner deems appropriate or requires.

history: (History: Added by Stats. 1978, Ch. 795.)

article: 17. Loans and Investments


text: The commissioner shall require the payment of three hundred seventy-four dollars ($374), as fee for the determination referred to in Section 1107.

history: (History: Amended by Stats. 2017, Ch. 534, Sec. 23. (AB 1699) Effective January 1, 2018.)

article: 17. Loans and Investments


citation: INS § 1110

text:
This article does not apply to combination automobile insurance policies in which one insurer issues a policy covering certain classes of insurance on a risk, and another insurer covers certain other classes of insurance on the same risk. This article applies to:

(a) The issuance of a policy in which more than one insurer indemnifies the insured severally, jointly, or jointly and severally with other insurers for all or a specified portion of a risk.

(b) The issuance of a policy which is subject to an automatic reinsurance agreement under which several insurers participate with the insurer or insurers issuing the policy to the same extent as though they were primary insurers, and the contract is negotiated upon the basis of such reinsurance and the policy makes reference to the fact of such reinsurance.

(c) Policies issued pursuant to a plan providing for the allocation among various insurers of risks who have been unable to procure such insurance without resort to the plan.

history: (History: Added by Stats. 1943, Ch. 872.)

article: 18. Multiple Insurer Operations

path: 1. GENERAL RULES GOVERNING INSURANCE > 2. THE BUSINESS OF INSURANCE > 1. General Regulations > 18. Multiple Insurer Operations


citation: INS § 1111

text: Insurers desiring to issue policies to which this article is applicable, and to pay commissions to persons who are licensed as insurance agents, but not as agents for all insurers participating in the risk, and who are not licensed as insurance brokers, may file with the commissioner in such form as he may require, a statement of the plan under which they intend to operate, and a list of the insurers that will operate under the plan. If the commissioner finds that the nature of the plan is not such that the interests of the insuring public will be jeopardized by permitting an agent of one or more of the insurers to act in a transaction with or for all the insurers, or for the particular insurer paying the commission without being licensed as agent for such insurer or as an insurance broker, he may issue a permit authorizing the operation of the plan by or on behalf of the insurers listed in the application, and the payment of commissions pursuant to the plan as approved by the commissioner shall be lawful.

article: 18. Multiple Insurer Operations


citation: INS § 1112

text: Within 10 days after the withdrawal of an insurer from the plan or from the time additional insurers participate in the plan, notice of the change shall be given the commissioner in writing, and unless such notice is so given, the permit theretofore issued by the commissioner shall expire on the tenth day after such change. Unless the permit expires as provided in the preceding sentence, it shall remain in force continuously unless the commissioner after hearing finds that the insurers have deviated materially from the plan, and that it is against public interest to continue its operation.

article: 18. Multiple Insurer Operations


citation: INS § 1113

text: For filing application for a permit issued pursuant to this article, the commissioner shall charge and collect the sum of one hundred seven dollars ($107).

history: (History: Amended by Stats. 2017, Ch. 534, Sec. 24. (AB 1699) Effective January 1, 2018.)

article: 18. Multiple Insurer Operations


citation: INS § 1140

text: Except as otherwise provided in this code, incorporated insurers are subject to the provisions of the general corporation law in like manner with other corporations.

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

chapter: 2. Incorporated Insurers

article: 1. General

path: 1. GENERAL RULES GOVERNING INSURANCE > 2. THE BUSINESS OF INSURANCE > 2. Incorporated Insurers > 1. General


text:
(a) A domestic incorporated life insurer may be organized under the Nonprofit Mutual Benefit Corporation Law. With the prior consent of the commissioner, an existing domestic incorporated life insurer organized under the general corporation law may be converted to a domestic incorporated life insurer under the Nonprofit Mutual Benefit Corporation Law pursuant to Section 911 of the Corporations Code. The consent shall be obtained by filing an application accompanied by any information that the commissioner may require, and by submitting a filing fee of seven thousand dollars ($7,000).

(b) Except as otherwise provided in this code, a domestic incorporated life insurer organized under the Nonprofit Mutual Benefit Corporation Law shall be subject to that law in the same manner as other corporations organized under that law. In the case of a conflict between the Insurance Code and the Nonprofit Mutual Benefit Corporation Law, the provisions of the Insurance Code shall prevail.

(c) A life insurer organized under the Nonprofit Mutual Benefit Corporation Law shall have the same powers held by, and shall be subject to all provisions of this code applicable to, a domestic incorporated stock life insurer, except for Section 1140. An insurer so organized shall have a surplus (in lieu of paid-in capital and surplus) at least equal to the sum of the paid-in capital and surplus required of a stock insurer admitted for the same classes. In addition, an insurer so organized shall be subject to the same premium tax obligations as a stock insurer.

(d) Officers, directors, and other managers of domestic life insurers organized under the Nonprofit Mutual Benefit Corporation Law shall not be entitled to any rights, preferences, or privileges that are not allowed for the officers, directors, or managers of an insurer of the same class organized under the general corporation law.

(e) For a life insurer organized under the Nonprofit Mutual Benefit Corporation Law, all references in this code to “shareholders” shall be interpreted to mean “members,” and all references to “shares,” “stocks,” or “securities” shall mean “memberships,” as defined in the Nonprofit Mutual Benefit Corporation Law.

(f) The issuance of memberships to policyholders that are not natural persons shall be subject to the provisions of Article 8 (commencing with Section 820) of Chapter 1 of Part 2 of Division 1. A domestic incorporated life insurer organized under the Nonprofit Mutual Benefit Corporation Law shall have at least one member. The redemption of memberships, other than for policyholders that are not natural persons, shall be subject to the same rules as those applicable to the payment of dividends by a domestic incorporated stock life insurer.

history: (History: Added by Stats. 2004, Ch. 376, Sec. 1. Effective January 1, 2005.)

article: 1. General


text:
(a) Notwithstanding any other law, a copy of every form of proxy or written consent or authorization for use at any meeting or proceeding of shareholders or stockholders of any domestic insurer to evidence authority to cast the vote of any shareholder or stockholder, or to record the consent or the authorization of any shareholder or stockholder to any action of the insurer, and a copy of every solicitation, announcement, or advertisement used to obtain, or to influence any shareholder or stockholder to sign, any proxy, or written consent or authorization shall be filed with the commissioner, accompanied by a filing fee of one hundred thirty-six dollars ($136), by the person intending to use, issue, publish, or circulate the document. This document shall not be used, issued, published, or circulated before a period of 10 days following the date of its filing, or any shorter period that may be designated by the commissioner, has elapsed. Within the 10-day or a shorter period, the commissioner may disapprove of any document filed with him or her pursuant to this section, stating his or her reasons therefor in writing, in which case, the document shall not be used, issued, published, or circulated.

(b) Any person who fails to make the filing required by this section and who thereafter uses any document required to be filed, uses the document before it has been filed with the commissioner for the period required, or uses the document after receiving written notice that the document has been disapproved by the commissioner is guilty of a misdemeanor. It shall be unlawful to use any proxy or consent obtained in violation of this section. The superior court of the State of California in and for the county in which is located the principal place of business of the insurer shall have jurisdiction to enforce this section and the regulations promulgated pursuant to this section, and to grant appropriate relief upon the verified petition of the commissioner, the domestic insurer, or any of its shareholders or stockholders.

(c) The purposes of this section are: to ensure that the shareholders, stockholders, or other persons entitled to vote or give written consents or authorizations are provided with adequate and accurate information regarding the affairs of the insurers in which they have interests, the interests of those soliciting proxies or written consents or authorizations and of those upon whose behalf the solicitations are made, and the matters as to which proxies, written consents, or authorizations are solicited; and to prevent fraud or deception in connection with proxies, proxy statements, or other proxy solicitations. The commissioner may make rules and regulations in furtherance of the purposes of this section. These rules and regulations may differ as to different classes and types of insurers.

(d) This section shall not apply to any domestic insurer having fewer than 100 shareholders or stockholders and shall not apply to any domestic insurer if 95 percent or more of its stock is owned or controlled by a parent or an affiliated insurer and the remaining shares of stock are owned by fewer than 500 shareholders or stockholders. Any domestic insurer that files with the federal Securities and Exchange Commission forms of proxies, consents, and authorizations complying with the requirements of the federal Securities Exchange Act of 1934 (15 U.S.C. Sec. 78a et seq.) and the amendments thereto and the applicable regulations thereunder, is exempt from this section.

history: (History: Amended by Stats. 2017, Ch. 534, Sec. 25. (AB 1699) Effective January 1, 2018.)

article: 1. General


citation: INS § 1141

text: No director, trustee, officer or agent of any insurer shall be subject to personal liability by reason of any payment or any determination not to contest or seek recovery of any payment made subsequent to June 4, 1944, or hereafter made, by or on behalf of such insurer on account of any tax, license, fee, deposit or other charge paid pursuant to the terms of any statute, law or ordinance of this or any other State, county, city or taxing authority, unless prior to such payment or determination such statute, law or ordinance shall have been judicially rendered invalid by action of the State court having final appellate jurisdiction in the premises or by action of the Supreme Court of the United States. This section is applicable not only to directors, trustees, officers and agents of insurers generally but also to reciprocal or interinsurance exchanges, members of their subscribers’ boards, their attorneys in fact and any director, trustee, officer and agent thereof.

history: (History: Added by Stats. 1945, Ch. 27.)

article: 1. General


citation: INS § 1142

text:
In situations of hardship, financial embarrassment or where other good cause is shown the commissioner may, in his discretion, by written order, permit an insurer to acquire by gift, devise, bequest or other transfer an asset, or a part thereof, not otherwise permissible, or retain an asset, however obtained. Such order, or any amendments thereto, shall specify the asset and the mode of acquisition or retention which is to be permitted and shall specify such reasonable time as the commissioner may determine in his discretion for the retention, or further retention of such asset. At the end of such time or earlier if he determines circumstances warrant such action the commissioner may invoke the procedure of Section 1202 for the purpose of requiring the insurer to dispose of the asset, or a part thereof, so acquired or held.

This section shall not apply to any asset of an insurer which:

(1) Has been held for 25 years or more, and

(2) Consists entirely of corporate securities, and

(3) The value does not exceed more than one-tenth of 1 percent of the total assets of the insurer.

The insurer may retain such an asset.

history: (History: Added by Stats. 1965, Ch. 1547.)

article: 1. General


citation: INS § 1152

text:
(a) Domestic incorporated stock insurers, except those governed by Sections 10530, 12373, and 12640.06, shall be governed by the provisions of this section and, if the insurer is subject to registration pursuant to Sections 1215.4 and 1215.5, as to payment or distribution of dividends to stockholders. Such insurers may make dividends only from earned surplus.

(b) No dividends shall be declared out of earned surplus derived from the mere net appreciation in the value of assets not yet realized, nor shall any dividends be declared from any part of such earned surplus derived from an exchange of assets, unless and until such earned surplus have been realized or unless the assets received are currently realizable in cash.

(c) An insurer may declare and distribute a dividend otherwise prohibited by this section if (1) following payment of the dividend the insurer’s surplus as regards policyholders is (A) reasonable in relation to its outstanding liabilities and (B) adequate to its financial needs as prescribed in Section 1215.5, and (2) the commissioner has given approval for the dividend prior to payment.

(d) For purposes of this section, “earned surplus” means unassigned funds, as required to be reported on the insurer’s annual statement.

history: (History: Amended by Stats. 1993, Ch. 974, Sec. 1.8. Effective January 1, 1994.)

article: 2. Restrictions on Activities

path: 1. GENERAL RULES GOVERNING INSURANCE > 2. THE BUSINESS OF INSURANCE > 2. Incorporated Insurers > 2. Restrictions on Activities


citation: INS § 1153

text:
An insurer shall not be admitted within three years from and after the time when it commences business as an insurer, nor within three years from and after the time when it is first incorporated, unless assets equal to the sum of its liabilities and the minimum capital and surplus required for admission are maintained in cash or one or more of the following:

(a) Securities specified in Sections 1170 to 1175, inclusive.

(b) Premiums that are in the course of collection, or agents’ balances representing premiums, on policies effected not more than 90 days prior to the date on which these premiums or balances are valued for the purpose of this section, and earned service fees receivable, not over 90 days due, and evidences of debt representing those assets.

(c) In the case of a life insurer, the amount of current deferred premiums receivable, after deducting therefrom the amount of the loading.

(d) Interest accrued and dividends declared, receivable on any of the assets specified in subdivisions (a) to (c), inclusive, no part of which interest or dividends has been due in excess of one year.

(e) Amount of reinsurance recoverable from admitted insurers.

(f) With the prior approval of the commissioner, any investments authorized by this code if the following conditions are met:

(1) The insurer has previously been authorized to write life or health insurance, or is seeking authority to write life or health insurance.

(2) The solvency of the insurer is guaranteed by another insurer (the “guaranteeing insurer”) that meets the following criteria:

(A) The guaranteeing insurer has an ownership interest of at least 50 percent in the insurer.

(B) The guaranteeing insurer, which may be a reciprocal or interinsurance exchange, has been admitted to do business in this state for not less than 10 years.

(C) The guaranteeing insurer has maintained a surplus of admitted assets over all liabilities of at least five hundred million dollars ($500,000,000) for not less than three years.

(3) The commissioner, in his or her discretion, determines that the proposed investment is sound in relation to the insurer’s business plan and operations.

history: (History: Amended by Stats. 1998, Ch. 495, Sec. 1. Effective January 1, 1999.)

article: 2. Restrictions on Activities


text: An admitted insurer which has been in business as an insurer less than three years from and after the time when it commenced business as an insurer shall maintain its assets during the balance of such three-year period in the types of assets specified in Section 1153, excepting such of its assets as are in excess of the sum of its liabilities and the surplus and capital requirements for admission. On its failure so to do, the commissioner may revoke its certificate of authority. The proceedings shall be conducted in accordance with Chapter 5 of Part 1 of Division 3 of Title 2 of the Government Code, and the commissioner shall have all the powers granted therein.

history: (History: Amended by Stats. 1951, Ch. 543.)

article: 2. Restrictions on Activities


citation: INS § 1154

text:
After the period specified in Sections 1153 and 1153.5, the requirements of those sections shall no longer be applicable to any insurer specified therein and shall no longer affect or modify the application or nonapplication of any section of this code.

The provisions of Sections 1153 and 1153.5 shall not govern or limit the investments of any insurer formed by merger, consolidation, or reinsurance of the entire business of any one or more admitted insurers if any one or more of the merged, consolidated, reinsuring or reinsured insurers was, prior to such consolidation, merger, or reinsurance, admitted, or authorized to do business as an insurer in any state, for a period of three or more years.

history: (History: Amended by Stats. 1949, Ch. 339.)

article: 2. Restrictions on Activities


citation: INS § 1155

text: An insurer, within such limits as may be set by the board of directors, may contribute to community funds or to charitable, philanthropic, or benevolent instrumentalities conducive to public welfare or civic betterment.

history: (History: Added by Stats. 1951, Ch. 564.)

article: 2. Restrictions on Activities


citation: INS § 1170

text:
Domestic incorporated insurers may invest their assets in the purchase of any of the securities specified in this article, or in loans upon such securities, if those purchases or loans conform to all the following conditions:

(a) Such securities are not in default as to principal or interest at the date of investment.

(b) In the case of a purchase, the purchase price does not exceed the market value of the securities at the date of investment.

(c) In the case of a loan not governed by the provisions of Section 1194.81, the amount loaned does not exceed eighty-five per cent of such market value at the date of investment.

history: (History: Amended by Stats. 2009, Ch. 234, Sec. 7. (AB 299) Effective January 1, 2010.)

article: 3. General Investments

path: 1. GENERAL RULES GOVERNING INSURANCE > 2. THE BUSINESS OF INSURANCE > 2. Incorporated Insurers > 3. General Investments


citation: INS § 1171

text: Such insurers may invest in obligations of the United States or obligations for which the faith and credit of the United States are pledged for payment of principal and interest.

article: 3. General Investments


text: Such insurers may invest in obligations of the United States Postal Service.

history: (History: Added by Stats. 1973, Ch. 464.)

article: 3. General Investments


citation: INS § 1172

text: Such insurers may invest in obligations of the Dominion of Canada, or the Commonwealth of Puerto Rico, or of any province of the Dominion of Canada, or of any political subdivision of the Commonwealth of Puerto Rico, or obligations for which are pledged the faith and credit either of the dominion, or the commonwealth, or of any province of the dominion, or of any political subdivision of the commonwealth, for the payment of principal and interest, if within 10 years immediately preceding the investment such province or such political subdivision was not in default for more than 90 days in the payment of principal or interest upon any legally authorized obligation issued by it.

history: (History: Amended by Stats. 1963, Ch. 476.)

article: 3. General Investments


citation: INS § 1173

text: Such insurers may invest in obligations issued under authority of law by any county, municipality, or school district in this State or in any other state, or in any province of the Dominion of Canada or in any political subdivision of the Commonwealth of Puerto Rico, if the obligor has not within two years next preceding the investment defaulted for more than 90 days in the payment of any part of either principal or interest upon any legally authorized obligation issued by it, and the obligations of the state or province or political subdivision in which it is located are legal for investment under the provisions of Sections 1172 or 1174.

article: 3. General Investments


citation: INS § 1174

text: Such insurers may invest in obligations of this State or those for which the faith and credit of this State are pledged for the payment of principal and interest, and in obligations of any other State in the United States, if within ten years immediately preceding the investment such State was not in default for more than ninety days in the payment of any part of principal or interest of any debt duly authorized by the Legislature of such State to be contracted by such State since the first day of January, 1878.

history: (History: Amended by Stats. 1937, Ch. 738.)

article: 3. General Investments


citation: INS § 1175

text: Such insurers may invest in bonds of any permanent road division in this state, or any district organized under the laws of this state, when such bonds are legal investments for savings banks of this state, or have been certified as legal investments for savings banks pursuant to Division 10 (commencing with Section 20000) of the Water Code, or when the statutes or laws providing for the issuance of such bonds provide that such bonds shall be entitled to the same force or value or use as bonds issued by any municipality, or such law specifically states that such bonds shall be legal investments for either savings banks, insurance companies, all trust funds, state school funds or any funds which may be invested in bonds of cities, counties, cities and counties, school districts, or municipalities in the state, or when such bonds have been investigated and approved by a commission or board now or hereafter authorized by law to conduct such investigation and give such approval when such law specifies that upon that approval the bonds are legal investments for insurers, or which the commissioner approves in writing as legal for investment of the funds of insurers. The commissioner in determining whether to approve any bonds as legal investments which do not otherwise qualify as such pursuant to any part of this code, shall, at the expense of any insurer requesting approval, make an adequate independent investigation of such bonds and the security therefor. A copy of the data secured in such investigation and the resulting opinion of the commissioner shall be furnished to the insurer.

history: (History: Amended by Stats. 1984, Ch. 193, Sec. 90.)

article: 3. General Investments


text: Such insurers may invest in bonds of any county water district operating under Division 12 of the Water Code.

history: (History: Added by Stats. 1953, Ch. 1653.)

article: 3. General Investments


text: Such insurers may make, invest in or purchase loans which are guaranteed by the United States or any agency thereof pursuant to the provisions of the “Servicemen’s Readjustment Act of 1944” or any act of Congress supplementary or amendatory thereof.

history: (History: Added by Stats. 1945, Ch. 26.)

article: 3. General Investments


text: None of the provisions of the Insurance Code limiting or restricting loans by insurers or prescribing the security therefor shall apply to any loans which are fully guaranteed by the United States or any agency thereof pursuant to the provisions of the “Servicemen’s Readjustment Act of 1944” or any act of Congress supplementary or amendatory thereof; and in any case in which payment of a portion of any loan is guaranteed by the United States or any agency thereof pursuant to the provisions of the “Servicemen’s Readjustment Act of 1944” or any act of Congress supplementary or amendatory thereof, the guaranteed portion of such loan shall not be deemed a part of said loan for the purposes of any provision of the Insurance Code limiting the amount which may be loaned by an insurer upon the security of real property or improvements thereon shall be applicable to such loan.

article: 3. General Investments


citation: INS § 1177

text: Such insurers may invest in notes or bonds secured by mortgage guaranteed as to payment by a policy of mortgage insurance, and mortgage participation certificates issued by a mortgage insurer in accordance with the provisions of this code.

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

article: 3. General Investments


citation: INS § 1178

text:
Such insurers may invest in collateral trust bonds or notes, secured by any of the following:

(a) A deposit of obligations authorized for investment by this article or Articles 4, 5, or 6 of this chapter having a market value at least fifteen per cent in excess of the par value of the collateral trust bonds or notes issued.

(b) A deposit of obligations authorized for investment by this article or Articles 4, 5, or 6 of this chapter, together with other securities, the combined market value of the deposit being at least twenty per cent in excess of the par value of the collateral trust bonds or notes issued, with the par value of the collateral trust bonds or notes not exceeding the market value of the deposited obligations which are authorized for investment by this article or Articles 4, 5, or 6 of this chapter.

(c) A deposit of obligations authorized for investment by this article, or Articles 4, 5, or 6 of this chapter, together with other securities, and conforming to the following requirements:

(1) The combined market value of the deposit is at least thirty per cent in excess of the par value of the collateral trust bonds or notes issued.

(2) The par value of such collateral trust bonds or notes issued does not exceed the market value of deposited obligations authorized for investment by this article.

(3) The deposited collateral consists of obligations authorized for investment by this article, or Articles 4, 5, or 6 of this chapter, having a market value of at least seventy-five per cent of the par value of such collateral trust bonds or notes issued.

article: 3. General Investments


citation: INS § 1179

text: Such insurers may invest in farm loan bonds, consolidated farm loan bonds, collateral trust debentures, consolidated debentures, or other obligations issued under the Federal Farm Loan Act, approved July 17, 1916, as amended (Title 12 U.S.C. Sections 636 to 1012 inclusive, and Sections 1021 to 1129 inclusive), and the Farm Credit Act of 1933, as amended (Title 12 U.S.C. Sections 1131 to 1138f inclusive), and the Farm Credit Act of 1971 (Title 12 U.S.C. Sections 2001 to 2259 inclusive). Under this section such insurers may invest in farm loan bonds and consolidated farm loan bonds issued by federal land banks, consolidated collateral trust debentures and all other debentures issued by federal intermediate credit banks, debentures issued by the Central Bank for Cooperatives and consolidated debentures issued by banks for cooperatives.

history: (History: Amended by Stats. 1973, Ch. 138.)

article: 3. General Investments


citation: INS § 1180

text: Such insurers may invest in bonds issued under the “Home Owners’ Loan Act of 1933”; bonds, debentures and notes issued by any federal home loan bank, or consolidated federal home loan bank notes, bonds and debentures issued by the Federal Home Loan Bank Board in accordance with the provisions of the Federal Home Loan Bank Act, and mortgage, mortgage participation, pass-through or trust certificates, or obligations or other securities issued or guaranteed by the Federal Home Loan Mortgage Corporation, pursuant to Section 305 or Section 306 of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. Secs. 1454, 1455), by the Government National Mortgage Association, pursuant to Section 306 or Section 313 or Title III of the National Housing Act (12 U.S.C. Secs. 1721, 1723(e)), or by the Federal National Mortgage Association pursuant to 12 U.S.C. Sections 1717–1719.

history: (History: Amended by Stats. 1980, Ch. 811, Sec. 2. Effective July 28, 1980.)

article: 3. General Investments


citation: INS § 1181

text: Such insurers may also invest in registered warrants of this State, issued pursuant to law.

history: (History: Added by Stats. 1937, Ch. 738.)

article: 3. General Investments


citation: INS § 1182

text: Domestic incorporated insurers may invest in an account or accounts in one or more banks, savings and loan associations, or credit unions to the extent the account or accounts are insured by an agency or instrumentality of the federal government. As used in this section, an account may include a certificate of deposit.

history: (History: Amended by Stats. 2009, Ch. 234, Sec. 8. (AB 299) Effective January 1, 2010.)

article: 3. General Investments


citation: INS § 1185

text:
(a) Every domestic incorporated insurer shall file a report with the commissioner disclosing material acquisitions and dispositions of assets or material nonrenewals, cancellations, or revisions of ceded reinsurance agreements unless the acquisitions and dispositions of assets or material nonrenewals, cancellations, or revisions of ceded reinsurance agreements have been submitted to the commissioner for review, approval, or information purposes pursuant to other provisions of this code, laws, regulations, or other requirements.

(b) The report shall be filed within 15 days after the end of the calendar month in which any of the foregoing transactions occur.

(c) One complete copy of the report, including any exhibits or other attachments filed as part thereof, shall be filed with the department and the National Association of Insurance Commissioners.

(d) All reports obtained by, or disclosed to the commissioner pursuant to this article, shall be given confidential treatment and shall not be subject to subpoena and shall not be made public by the commissioner, the National Association of Insurance Commissioners, or any other person, except to insurance departments of other states, without the prior written consent of the insurer to which it pertains unless the commissioner, after giving the insurer who would be affected thereby, notice and an opportunity to be heard, determines that the interest of policyholders, shareholders, or the public will be served by the publication thereof, in which event the commissioner may publish all or any part thereof in such manner as he or she may deem appropriate.

history: (History: Added by Stats. 1994, Ch. 662, Sec. 1. Effective January 1, 1995.)

path: 1. GENERAL RULES GOVERNING INSURANCE > 2. THE BUSINESS OF INSURANCE > 2. Incorporated Insurers > 3.5. Disclosure of Material Transactions


citation: INS § 1186

text:
(a) No acquisitions or dispositions of assets shall be reported pursuant to Section 1185 if the acquisitions or dispositions are not material. For purposes of this article, a material acquisition (or the aggregate of any series of related acquisitions during any 30-day period) or disposition (or the aggregate of any series of related dispositions during any 30-day period) is one that is nonrecurring and not in the ordinary course of business and involves more than 5 percent of the reporting insurer’s total admitted assets as reported in its most recent statutory statement filed with the insurance department of the insurer’s state of domicile.

(b) Asset acquisitions subject to this article include every purchase, lease, exchange, merger, consolidation, succession, or other acquisition other than the construction or development of real property by or for the reporting insurer or the acquisition of materials for that purpose. Asset dispositions also include every sale, lease, exchange, merger, consolidation, mortgage, hypothecation, assignment (whether for the benefit of creditors or otherwise), abandonment, destruction, or other disposition.

(c) The following information is required to be disclosed in any report of a material acquisition or disposition of assets:

(1) Date of the transaction.

(2) Manner of acquisition or disposition.

(3) Description of the assets involved.

(4) Nature and amount of the consideration given or received.

(5) Purpose of, or reason for, the transaction.

(6) Manner by which the amount of consideration was determined.

(7) Gain or loss recognized or realized as a result of the transaction.

(8) Name of the person from whom the assets were acquired or to whom they were disposed.

(d) Insurers shall report material acquisitions and dispositions on a nonconsolidated basis unless the insurer is part of a consolidated group of insurers which utilizes a pooling arrangement or 100 percent reinsurance agreement that affects the solvency and integrity of the insurer’s reserves and that insurer ceded substantially all of its direct and assumed business to the pool. An insurer is deemed to have ceded substantially all of its direct and assumed business to a pool if the insurer has less than one million dollars ($1,000,000) total direct plus assumed written premiums during a calendar year that are not subject to a pooling arrangement and the net income of the business not subject to the pooling arrangement represents less than 5 percent of the insurer’s capital and surplus.

article: 3.5. Disclosure of Material Transactions