text: Information submitted to the commissioner, as required by Section 929, shall be confidential pursuant to Section 7929.000 of the Government Code and exempt from the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code). Additionally, that information shall not be subject to subpoena or subpoena duces tecum. Testimony by the commissioner, the commissioner’s staff, an employee of the department, or a person to whom the report required by Section 929 was disclosed, regarding the contents of any report submitted pursuant to Section 929, shall be inadmissible as evidence in a civil proceeding.

history: (History: Amended by Stats. 2021, Ch. 615, Sec. 301. (AB 474) Effective January 1, 2022. Operative January 1, 2023, pursuant to Sec. 463 of Stats. 2021, Ch. 615.)

article: 10.4. Wildfire Risk Information Reporting


kind: section

code: INS

text:
(a) The commissioner shall post to the department’s Internet Web site a report on wildfire risk compiled from the data collected pursuant to Section 929.

(b) The report shall be updated every two years to reflect new data submitted by insurers.

(c) The report shall separately provide information each calendar year.

history: (History: Added by Stats. 2018, Ch. 616, Sec. 3. (SB 824) Effective January 1, 2019.)

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 > 10.4. Wildfire Risk Information Reporting


text:
(a) Failure to submit a report pursuant to Section 929 shall subject an admitted insurer to a civil penalty to be fixed by the commissioner, not to exceed five thousand dollars ($5,000) or, if the act was willful, a civil penalty not to exceed ten thousand dollars ($10,000).

(b) An insurer may request, and the commissioner may grant, a 30-day extension, if needed due to unintended or unforeseen delays, to submit the report. If the insurer fails to submit the report within 30 days of a written notice by the commissioner regarding the failure to submit the report, the commissioner may find that the failure to submit the report was willful and increase the civil penalty to an amount not to exceed ten thousand dollars ($10,000).

(c) The penalty imposed by this section shall be enforced by the commissioner and may be appealed by means of a remedy provided by Section 12940, or by Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. This subdivision is the sole means for enforcement of this section.


citation: INS § 930

text: The provisions of this article shall apply to all domestic, foreign, and alien insurers doing business in this state.

history: (History: Added by Stats. 1991, Ch. 986, Sec. 1.)

path: 1. GENERAL RULES GOVERNING INSURANCE > 2. THE BUSINESS OF INSURANCE > 1. General Regulations > 10.5. National Association of Insurance Commissioners


citation: INS § 931

text:
(a) Each domestic, foreign, and alien insurer doing business in this state shall annually, on or before the first day of March of each year, file with the National Association of Insurance Commissioners a copy of its annual statement convention blank, along with any additional filings as prescribed by the commissioner for the preceding year. The information filed with the National Association of Insurance Commissioners shall be in the same format and scope as that required by the commissioner and shall include the signed jurat page and the actuarial certification. Any amendments and addendums to the annual statement filing subsequently filed with the commissioner shall also be filed with the National Association of Insurance Commissioners.

(b) Each year, on or before the following dates, every domestic, foreign, and alien insurer doing business in this state shall make and file with the National Association of Insurance Commissioners, in the number, form, and methods prescribed by the commissioner, a copy of the quarterly statements exhibiting its condition and affairs for the period beginning on January 1 of the current calendar year through the end of each quarter of the current year as described below. These quarterly filings shall cover the period of time beginning January 1 of the current year through and including the last day of the quarter for which the report is being made. The first quarter filing shall be filed on or before May 15th of every year. The second quarter filing shall be filed on or before August 15th of every year. The third quarter filing shall be filed on or before November 15th of every year. If any of these dates fall on a day other than a business day, then the filing is due to the National Association of Insurance Commissioners by the first business day preceding that date. The information filed with the National Association of Insurance Commissioners shall include a jurat page. A copy of any amendments and addendums to the quarterly statement filings subsequently filed with the commissioner shall also be filed with the National Association of Insurance Commissioners.

(c) Foreign insurers that are domiciled in a state which has a law substantially similar to subdivision (a) of this section shall be deemed in compliance with this section.

history: (History: Amended by Stats. 2004, Ch. 599, Sec. 3. Effective January 1, 2005.)

article: 10.5. National Association of Insurance Commissioners


citation: INS § 932

text: In the absence of actual malice, members of the National Association of Insurance Commissioners, their duly authorized committees, subcommittees, and task forces, their delegates, National Association of Insurance Commissioners’ employees, and all others charged with the responsibility of collecting, reviewing, analyzing, and disseminating the information developed from the filing of the annual statement convention blanks shall be acting as agents of the commissioner under the authority of this article and shall not be subject to civil liability for libel, slander, or any other cause of action by virtue of their collection, review, and analysis or dissemination of the data and information collected from the filings required herein.


citation: INS § 933

text: All financial analysis ratios and examination synopses concerning insurers that are submitted to the department by the National Association of Insurance Commissioners’ Insurance Regulatory Information System are confidential and may not be disclosed by the department.


citation: INS § 934

text: The commissioner may suspend, revoke, or refuse to renew the certificate of authority of any insurer failing to file its annual or quarterly statement with the National Association of Insurance Commissioners when due or within any extension of time which the commissioner, for good cause, may grant.

history: (History: Amended by Stats. 2004, Ch. 599, Sec. 4. Effective January 1, 2005.)


text:
(a) The purpose of this article is to provide the requirements for maintaining a risk management framework, completing an Own Risk and Solvency Assessment (ORSA), and provide guidance and instructions for filing an ORSA Summary Report with the commissioner. The requirements of this article shall apply to all insurers domiciled in this state unless exempt pursuant to Section 935.6.

(b) The Legislature finds and declares that the ORSA Summary Report will contain confidential and sensitive information related to an insurer’s or insurance group’s identification of risks that are material and relevant to the insurer or insurance group filing the report. This information will include proprietary and trade secret information that has the potential for harm and competitive disadvantage to the insurer or insurance group if the information is made public. It is the intent of the Legislature that the ORSA Summary Report shall be a confidential document filed with the commissioner, that the ORSA Summary Report shall be shared only as stated in this article to assist the commissioner in the performance of his or her duties, and that in no event shall the ORSA Summary Report be subject to public disclosure.

history: (History: Added by Stats. 2013, Ch. 238, Sec. 1. (AB 584) Effective January 1, 2014. Section operative January 1, 2015, pursuant to Section 935.11.)

article: 10.6. Own Risk and Solvency Assessment

path: 1. GENERAL RULES GOVERNING INSURANCE > 2. THE BUSINESS OF INSURANCE > 1. General Regulations > 10.6. Own Risk and Solvency Assessment


text:
For purposes of this article, the following definitions apply:

(a) For the purpose of conducting an ORSA, the term “insurance group” shall mean those insurers and affiliates included within an insurance holding company system as defined in subdivision (e) of Section 1215.

(b) The term “insurer” shall have the same meaning as set forth in subdivision (f) of Section 1215, except that it shall not include agencies, authorities, or instrumentalities of the United States, its possessions and territories, the Commonwealth of Puerto Rico, the District of Columbia, or a state or political subdivision of a state.

(c) An “Own Risk and Solvency Assessment” or “ORSA” means a confidential internal assessment that is appropriate to the nature, scale, and complexity of an insurer or insurance group, conducted by that insurer or insurance group, of the material and relevant risks associated with the insurer’s or insurance group’s current business plan and the sufficiency of capital resources to support those risks.

(d) The term “ORSA Guidance Manual” means the current version of the Own Risk and Solvency Assessment Guidance Manual developed and adopted by the National Association of Insurance Commissioners (NAIC) and as amended from time to time. A change in the ORSA Guidance Manual shall be effective on the January 1 following the calendar year in which the changes have been adopted by the NAIC.

(e) An “ORSA Summary Report” means a confidential high-level summary of an insurer’s or insurance group’s ORSA.

article: 10.6. Own Risk and Solvency Assessment


text: An insurer shall maintain a risk management framework to assist the insurer with identifying, assessing, monitoring, managing, and reporting on its material and relevant risks. This requirement may be satisfied if the insurance group of which the insurer is a member maintains a risk management framework applicable to the operations of the insurer.

article: 10.6. Own Risk and Solvency Assessment


text: Subject to Section 935.6, an insurer, or the insurance group of which the insurer is a member, shall regularly conduct an ORSA consistent with a process comparable to the ORSA Guidance Manual. The ORSA shall be conducted no less than annually but also at any time when there are significant changes to the risk profile of the insurer or the insurance group of which the insurer is a member.

article: 10.6. Own Risk and Solvency Assessment


text:
(a) Upon the commissioner’s request, and no more than once each year, an insurer shall submit to the commissioner an ORSA Summary Report or any combination of reports that together contain the information described in the ORSA Guidance Manual, applicable to the insurer or the insurance group of which it is a member. Notwithstanding any request from the commissioner, if the insurer is a member of an insurance group, the insurer shall submit the report or reports required by this subdivision only if the commissioner is the lead state commissioner of the insurance group as determined by the procedures within the Financial Analysis Handbook adopted by the NAIC.

(b) The report shall include a signature of the insurer’s or insurance group’s chief risk officer or other executive having responsibility for the oversight of the insurer’s enterprise risk management process, attesting to the best of his or her belief and knowledge that the insurer applies the enterprise risk management process described in the ORSA Summary Report and that a copy of the report has been provided to the insurer’s board of directors or the appropriate committee thereof.

(c) An insurer may comply with subdivision (a) by providing the most recent and substantially similar report provided by the insurer, or by another member of an insurance group of which the insurer is a member, to the commissioner of another state, or to a supervisor or regulator of a foreign jurisdiction, provided that the report provides information that is comparable to the information described in the ORSA Guidance Manual. A report in a language other than English shall be accompanied by a translation of that report into the English language.

article: 10.6. Own Risk and Solvency Assessment


text:
(a) An insurer shall be exempt from the requirements of this article if both of the following apply:

(1) The insurer has annual direct written and unaffiliated assumed premiums, including international direct and assumed premiums, but excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, less than five hundred million dollars ($500,000,000).

(2) The insurance group of which the insurer is a member has annual direct written and unaffiliated assumed premiums, including international direct and assumed premiums, but excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, less than one billion dollars ($1,000,000,000).

(b) If an insurer qualifies for exemption pursuant to paragraph (1) of subdivision (a), but the insurance group of which the insurer is a member does not qualify for exemption pursuant to paragraph (2) of subdivision (a), then the ORSA Summary Report that may be required pursuant to Section 935.5 shall include every insurer within the insurance group. This requirement may be satisfied by the submission of more than one ORSA Summary Report for any combination of insurers provided any combination of reports includes every insurer within the insurance group.

(c) If an insurer does not qualify for exemption pursuant to paragraph (1) of subdivision (a), but the insurance group of which it is a member qualifies for exemption pursuant to paragraph (2) of subdivision (a), the only ORSA Summary Report that may be required pursuant to Section 935.5 shall be the report applicable to that insurer.

(d) An insurer that does not qualify for exemption pursuant to subdivision (a) may apply to the commissioner for a waiver from the requirements of this article based upon unique circumstances. In deciding whether to grant the insurer’s request for waiver, the commissioner may consider the type and volume of business written, ownership and organizational structure of the insurer or insurance group, and any other factor the commissioner considers relevant to the insurer or insurance group of which the insurer is a member. If the insurer is part of an insurance group with insurers domiciled in more than one state, the commissioner shall coordinate with the lead state commissioner and with the other domiciliary commissioners in considering whether to grant the insurer’s request for a waiver.

(e) Notwithstanding the exemptions stated in this section, the commissioner may do either one or both of the following:

(1) The commissioner may require that an insurer maintain a risk management framework, conduct an ORSA, and file an ORSA Summary Report based on unique circumstances, which include, but are not limited to, the type and volume of business written, ownership and organizational structure, federal agency requests, and international supervisor requests.

(2) The commissioner may require that an insurer maintain a risk management framework, conduct an ORSA, and file an ORSA Summary Report if the insurer (A) has Risk-Based Capital for a Company Action Level Event as described in Section 739.3, (B) meets one or more of the standards of an insurer that may be determined to be in hazardous financial condition as provided in Article 14.5 (commencing with Section 1065.1), and in regulations, or (C) otherwise exhibits qualities of a troubled insurer as determined by the commissioner.

(f) If an insurer that qualifies for an exemption pursuant to subdivision (a) subsequently no longer qualifies for that exemption due to changes in premiums as reflected in the insurer’s most recent annual statement or in the most recent annual statements of the insurers within the insurance group of which the insurer is a member, the insurer shall have one year following the year the threshold in subdivision (a) is exceeded to comply with the requirements of this article.

article: 10.6. Own Risk and Solvency Assessment


text:
(a) The ORSA Summary Report shall be prepared consistent with the ORSA Guidance Manual, subject to the requirements of this section. Documentation and supporting information shall be maintained and made available upon examination or upon request of the commissioner.

(b) The commissioner shall review the ORSA Summary Report submitted pursuant to Section 935.5 and any additional requests for information, using procedures similar to those currently used in the analysis and examination of multistate or global insurers and insurance groups.

article: 10.6. Own Risk and Solvency Assessment


text:
(a) Documents, materials, or other information, including the ORSA Summary Report, in the possession of or control of the Department of Insurance that are obtained by, created by, or disclosed to the commissioner or any other person under this article, are recognized by this state as being proprietary and contain trade secrets. These documents, materials, or other information shall be confidential by law and privileged, shall not be subject to disclosure pursuant to the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code), and shall not be subject to subpoena or discovery, or admissible in evidence, in any private civil action. However, the commissioner is authorized to use those documents, materials, or other information in the furtherance of any regulatory or legal action brought as a part of the commissioner’s official duties. The commissioner shall not otherwise make those documents, materials, or other information public without the prior written consent of the insurer.

(b) Neither the commissioner nor any other person who received documents, materials, or other ORSA-related information, including the ORSA Summary Report, through examination or otherwise, while acting under the authority of the commissioner, or with whom those documents, materials, or other information are shared pursuant to this article, shall be permitted or required to testify in any private civil action concerning those confidential documents, materials, or information, subject to subdivision (a).

(c) In order to assist in the performance of the commissioner’s regulatory duties, the commissioner:

(1) May, upon request, share documents, materials, or other ORSA-related information, including the confidential and privileged documents, materials, or information subject to subdivision (a), including proprietary and trade secret documents and materials, with other state, federal, and international financial regulatory agencies, including members of any supervisory college as described in Section 1215.7, with the NAIC, and with any third-party consultants designated by the commissioner, provided that the recipient agrees in writing to maintain the confidentiality and privileged status of the ORSA-related documents, materials, or other information and has verified in writing the legal authority to maintain confidentiality.

(2) May receive documents, materials, or other ORSA-related information, including otherwise confidential and privileged documents, materials, or information, including proprietary and trade secret information or documents, from regulatory officials of other foreign or domestic jurisdictions, including members of any supervisory college as described in Section 1215.7, and from the NAIC, and shall maintain as confidential or privileged any documents, materials, or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material, or information.

(3) Shall enter into a written agreement with the NAIC or a third-party consultant governing the sharing and the use of information provided pursuant to this article, consistent with this subdivision that shall do all of the following:

(A) Specify procedures and protocols regarding the confidentiality and security of information shared with the NAIC or a third-party consultant pursuant to this article, including procedures and protocols for sharing by the NAIC with other state regulators from states in which the insurance group has domiciled insurers. The agreement shall provide that the recipient agrees in writing to maintain the confidentiality and privileged status of the ORSA-related documents, materials, or other information and has verified in writing the legal authority to maintain confidentiality.

(B) Specify that ownership of information shared with the NAIC or a third-party consultant pursuant to this article remains with the commissioner and that the NAIC’s or a third-party consultant’s use of the information is subject to the direction of the commissioner.

(C) Prohibit the NAIC or third-party consultant from storing the information shared pursuant to this article in a permanent database after the underlying analysis is completed.

(D) Require prompt notice to be given to an insurer whose confidential information in the possession of the NAIC or a third-party consultant pursuant to this article when that information is subject to a request or subpoena to the NAIC or a third-party consultant for disclosure or production.

(E) Require the NAIC or a third-party consultant to consent to intervention by an insurer in any judicial or administrative action in which the NAIC or a third-party consultant may be required to disclose confidential information about the insurer shared with the NAIC or a third-party consultant pursuant to this article.

(F) In the case of an agreement involving a third-party consultant, provide for the insurer’s written consent.

(d) The sharing of information and documents by the commissioner pursuant to this article shall not constitute a delegation of regulatory authority or rulemaking, and the commissioner is solely responsible for the administration, execution, and enforcement of the provisions of this article.

(e) A waiver of any applicable privilege or claim of confidentiality in the documents, proprietary and trade secret materials, or other ORSA-related information shall not occur as a result of disclosure of the ORSA-related information or documents to the commissioner under this section or as a result of sharing as authorized in this article.

(f) Documents, materials, or other information in the possession or control of the NAIC or a third-party consultant pursuant to this article shall be confidential by law and privileged, shall not be subject to disclosure pursuant to the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code), and shall not be subject to subpoena or discovery, or admissible in evidence, in any private civil action.

history: (History: Amended by Stats. 2021, Ch. 615, Sec. 302. (AB 474) Effective January 1, 2022. Operative January 1, 2023, pursuant to Sec. 463 of Stats. 2021, Ch. 615.)

article: 10.6. Own Risk and Solvency Assessment


text: Any insurer failing, without just cause, to timely file the ORSA Summary Report as required in this article shall be subject to the late filing fees set forth in Section 924. The commissioner may reduce the penalty if the insurer demonstrates to the commissioner that the imposition of the penalty would constitute a financial hardship to the insurer.

article: 10.6. Own Risk and Solvency Assessment


text: If any provision of this article, or the application thereof to any person or circumstance, is held invalid, that determination shall not affect the provisions or applications of this article that can be given effect without the invalid provision or application, and to that end the provisions of this article are severable.

article: 10.6. Own Risk and Solvency Assessment


text: This article shall become operative on January 1, 2015.

history: (History: Added by Stats. 2013, Ch. 238, Sec. 1. (AB 584) Effective January 1, 2014. Note: This section prescribes a delayed operative date (Jan. 1, 2015) for Article 10.6, commencing with Section 935.1.)

article: 10.6. Own Risk and Solvency Assessment


text:
(a) The purpose of this article is to provide the Insurance Commissioner a summary of an insurer or insurance group’s corporate governance structure, policies, and practices to permit the commissioner to gain and maintain an understanding of the insurer’s corporate governance framework and outline the requirements for completing a corporate governance annual disclosure with the Insurance Commissioner. The requirements of this article shall apply to all insurers domiciled in this state.

(b) The Legislature finds and declares that the Corporate Governance Annual Disclosure and related information will contain confidential and sensitive information related to an insurer or insurance group’s internal operations and proprietary and trade secret information that, if made public, could potentially cause the insurer or insurance group competitive harm or disadvantage.

(c) This article shall not be construed to prescribe or impose corporate governance standards and internal procedures beyond that which is required under applicable state corporate law. Notwithstanding the foregoing, this article shall not be construed to limit the commissioner’s authority or the rights or obligations of third parties, under Article 4 (commencing with Section 729) relating to the examination of insurers.

history: (History: Added by Stats. 2015, Ch. 213, Sec. 1. (AB 553) Effective August 17, 2015.)

path: 1. GENERAL RULES GOVERNING INSURANCE > 2. THE BUSINESS OF INSURANCE > 1. General Regulations > 10.8. Corporate Governance Disclosure Act


text:
For the purposes of this article, the following definitions apply:

(a) “Corporate Governance Annual Disclosure (CGAD)” means a confidential report filed by the insurer or insurance group made in accordance with the requirements of this article.

(b) “Insurance group” means those insurers and affiliates included within an insurance holding company system as defined in subdivision (e) of Section 1215 (Insurance Holding Company System Regulatory Act).

(c) “Insurer” has the same meaning as set forth in subdivision (f) of Section 1215, except that it shall not include agencies, authorities, or instrumentalities of the United States, its possessions and territories, the Commonwealth of Puerto Rico, the District of Columbia, or a state or political subdivision of a state.

(d) An “ORSA Summary Report” means the report filed in accordance with subdivision (e) of Section 935.2.

(e) “Corporate Governance Annual Disclosure Model Regulation” means the current version of the Corporate Governance Annual Disclosure Model Regulation developed and adopted by the National Association of Insurance Commissioners (NAIC) and as amended from time to time. A change in the Corporate Governance Annual Disclosure Model Regulations shall be effective on the January 1 following the calendar year in which the changes have been adopted by the NAIC.

article: 10.8. Corporate Governance Disclosure Act


text:
(a) An insurer, or the insurance group of which the insurer is a member, shall, no later than June 1 of each calendar year, submit to the commissioner a CGAD that contains the information described in subdivision (b) of Section 936.5. Notwithstanding any request from the commissioner made pursuant to subdivision (c), if the insurer is a member of an insurance group, the insurer shall submit the report required by this section to the commissioner of the lead state for the insurance group, in accordance with the laws of the lead state, as determined by the procedures outlined in the most recent Financial Analysis Handbook adopted by the NAIC.

(b) The CGAD shall include a signature of the insurer or insurance group’s chief executive officer or corporate secretary attesting to the best of that individual’s belief and knowledge that the insurer has implemented the corporate governance practices therein and that a copy of the disclosure has been provided to the insurer’s board of directors or the appropriate committee thereof.

(c) An insurer not required to submit a CGAD under this section shall submit a CGAD upon the commissioner’s request.

(d) (1) For purposes of completing the CGAD, the insurer or insurance group may provide information regarding corporate governance at one or all of the following: the ultimate controlling parent level, an intermediate holding company level, or the individual legal entity level, depending upon how the insurer or insurance group has structured its system of corporate governance.

(2) The insurer or insurance group is encouraged to make the CGAD disclosures at one of the following levels:

(A) At the level at which the insurer’s or insurance group’s risk appetite is determined.

(B) At the level at which the earnings, capital, liquidity, operations, and reputation of the insurer are overseen collectively and at which the supervision of those factors are coordinated and exercised.

(C) At the level at which legal liability for failure of general corporate governance duties would be placed.

(3) If the insurer or insurance group determines the level of reporting based on the criteria listed in paragraph (2), it shall indicate which of the three criteria was used to determine the level of reporting and explain any subsequent changes in the level of reporting.

(e) The review of the CGAD and any additional requests for information shall be made through the lead state as determined by the procedures within the most recent Financial Analysis Handbook referenced in subdivision (a).

(f) Insurers providing information substantially similar to the information required by this article in other documents provided to the commissioner, including proxy statements filed in conjunction with Form B requirements, or other state or federal filings provided to the department, shall not be required to duplicate that information in the CGAD but shall only be required to cross reference the document in which the information is included.


text: The commissioner may, upon notice and opportunity for all interested parties to be heard, issue those rules, regulations, and orders as may be necessary to carry out the provisions of this article. Those rules and regulations shall be adopted, amended, or repealed in accordance with Administrative Procedure Act Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code.


text:
(a) The insurer or insurance group shall have discretion over the responses to the CGAD inquiries, provided the CGAD contains the material information necessary to permit the commissioner to gain an understanding of the insurer's or group's corporate governance structure, policies, and practices. The commissioner may request additional information that he or she deems material and necessary to provide him or her with a clear understanding of the corporate governance policies, the reporting or information system, or controls implementing those policies.

(b) Notwithstanding subdivision (a), the insurer or insurer group shall prepare the CGAD consistent with the NAIC Corporate Governance Annual Disclosure Model Regulation, subject to the requirements of this article. Documentation and supporting information shall be maintained and made available upon examination or upon request of the commissioner.


text:
(a) (1) Documents, materials, or other information, including the CGAD, in the possession or control of the department that are obtained by, created by, or disclosed to, the commissioner or any other person under this article are recognized by this state as being proprietary and to contain trade secrets. All those documents, materials, or other information shall be confidential by law and privileged, shall not be subject to disclosure by the commissioner pursuant to the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code), shall not be subject to subpoena, and shall not be subject to discovery from the commissioner or admissible in evidence in any private civil action if obtained from the commissioner in any manner.

(2) However, the commissioner is authorized to use the documents, materials, or other information in the furtherance of any regulatory or legal action brought as a part of the commissioner’s official duties. The commissioner shall not otherwise disclose or make public the documents, materials, or other information without the prior written consent of the insurer.

(3) This section shall not be construed to require written consent of the insurer before the commissioner may share or receive confidential documents, materials, or other CGAD-related information pursuant to subdivision (c) to assist in the performance of the commissioner’s regulatory duties.

(b) Neither the commissioner nor any person who received documents, materials, or other CGAD-related information, through examination or otherwise, while acting under the authority of the commissioner, or with whom those documents, materials, or other information are shared pursuant to this article shall be permitted or required to testify in any private civil action concerning any confidential documents, materials, or information described in subdivision (a).

(c) In order to assist in the performance of the commissioner’s regulatory duties, the commissioner may do both of the following:

(1) Upon request, share documents, materials, or other CGAD-related information, including the confidential and privileged documents, materials, or information described in subdivision (a), including proprietary and trade secret documents and materials with other state, federal, and international financial regulatory agencies, including members of any supervisory college as defined in Section 1215.7 (Insurance Holding Company System Regulatory Act), with the NAIC, and with third-party consultants pursuant to Section 936.7, provided that the recipient agrees in writing to maintain the confidentiality and privileged status of the CGAD-related documents, materials, or other information and has verified in writing the legal authority to maintain confidentiality.

(2) Receive documents, materials, or other CGAD-related information, including otherwise confidential and privileged documents, materials, or information, including proprietary and trade-secret information or documents, from regulatory officials of other state, federal, and international financial regulatory agencies, including members of any supervisory college as defined in Section 1215.7 (Insurance Holding Company System Regulatory Act), and from the NAIC, and shall maintain as confidential or privileged any documents, materials, or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the documents, materials, or information.

(d) The sharing of information and documents by the commissioner pursuant to this article shall not constitute a delegation of regulatory authority or rulemaking, and the commissioner is solely responsible for the administration, execution, and enforcement of this article.

(e) No waiver of any applicable privilege or claim of confidentiality in the documents, proprietary and trade-secret materials, or other CGAD-related information shall occur as a result of disclosure of that CGAD-related information or those documents to the commissioner under this section or as a result of sharing as authorized in this article.

history: (History: Amended by Stats. 2021, Ch. 615, Sec. 303. (AB 474) Effective January 1, 2022. Operative January 1, 2023, pursuant to Sec. 463 of Stats. 2021, Ch. 615.)


text:
(a) The commissioner may retain, at the insurer's expense, third-party consultants, including attorneys, actuaries, accountants, and other experts not otherwise a part of the commissioner’s staff as may be reasonably necessary to assist the commissioner in reviewing the CGAD and related information or the insurer's compliance with this article.

(b) Any person retained under subdivision (a) shall be under the direction and control of the commissioner and shall act in a purely advisory capacity.

(c) The NAIC and third-party consultants shall be subject to the same confidentiality standards and requirements as the commissioner.

(d) As part of the retention process, a third-party consultant shall verify to the commissioner in writing, with notice to the insurer, that it is free of a conflict of interest, and that it has internal procedures in place to monitor compliance with a conflict and to comply with the confidentiality standards and requirements of this article.

(e) A written agreement with the NAIC, a third-party consultant, or both, governing sharing and use of information provided pursuant to this article shall contain all of the following provisions and expressly require the written consent of the insurer prior to making public information provided under this article:

(1) Specific procedures and protocols for maintaining the confidentiality and security of CGAD-related information shared with the NAIC or a third-party consultant pursuant to this article.

(2) Procedures and protocols for sharing by the NAIC only with other state regulators from states in which the insurance group has domiciled insurers. The agreement shall provide that the recipient agrees in writing to maintain the confidentiality and privileged status of the CGAD-related documents, materials, or other information and has verified in writing the legal authority to maintain confidentiality.

(3) A provision specifying that ownership of the CGAD-related information shared with the NAIC or a third-party consultant remains with the department, and the NAIC’s or third-party consultant’s use of the information is subject to the direction of the commissioner.

(4) A provision that prohibits the NAIC or a third-party consultant from storing the information shared pursuant to this act in a permanent database after the underlying analysis is completed.

(5) A provision requiring the NAIC or third-party consultant to provide prompt notice to the commissioner and to the insurer or insurance group regarding any subpoena, request for disclosure, or request for production of the insurer’s CGAD-related information.

(6) A requirement that the NAIC or a third-party consultant consent to intervention by an insurer in any judicial or administrative action in which the NAIC or a third-party consultant may be required to disclose confidential information about the insurer shared with the NAIC or a third-party consultant pursuant to this article.


text: Any insurer or insurer group failing, without just cause, to timely file the CGAD as required in this article shall be subject to the late filing fees set forth in Section 924. The commissioner may reduce the penalty if the insurer or insurer group demonstrates to the commissioner that the imposition of the penalty would constitute a financial hardship to the insurer or insurer group.


text: The provisions of this article, other than Section 936.6, are severable. If any provision of this article, other than Section 936.6, or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.


citation: INS § 937

text:
The Legislature finds and declares all of the following:

(a) Since 2006, the state of California has funded and undertaken four comprehensive climate change assessments designed to assess the impacts and risks from climate change. The most recent, California’s Fourth Climate Change Assessment, identified that if greenhouse gas emissions continue to increase, the frequency of extreme wildfires will increase.

(b) The Department of Insurance’s review of the multistate Climate Risk Disclosure Survey in 2023 showed that insurance companies commonly identified that the purchase of reinsurance is a primary strategy for addressing increased risks from catastrophic events such as wildfires and the use of catastrophe modeling is a prominent risk assessment tool.

(c) It is in the state’s interest to expand insurance options for consumers in wildfire-distressed areas of California.

(d) It is in the state’s interest to understand the trends in the insurance markets and the reinsurance strategies and models used by insurance companies, not only to expand the writing of insurance policies, but to understand the systemic risk to the solvency of insurance companies that write policies in wildfire-distressed areas.

(e) Regularly updated information will support the ability of the department to further understand the California residential and commercial property insurance market by providing point-in-time information so the department can evaluate reinsurance trends across the market.

(1) The regularly updated information may include, but shall not be limited to, all of the following:

(A) The overview of a reinsurance program.

(B) The catastrophe program in place.

(C) The type of risk covered.

(D) The California-specific information.

(E) Year-over-year changes.

(f) Regularly updated data will allow the department to better analyze market trends and scenarios, which in turn will result in better, more informed communication to California consumers.

history: (History: Added by Stats. 2025, Ch. 542, Sec. 1. (SB 495) Effective January 1, 2026.)

path: 1. GENERAL RULES GOVERNING INSURANCE > 2. THE BUSINESS OF INSURANCE > 1. General Regulations > 10.85. Insurance and Climate Risk Market Intelligence Act


text:
(a) (1) On or before March 1, 2026, and on or before March 1 of every year thereafter, an admitted insurer in a group with written premiums in the prior year from fire, allied lines, private flood, homeowners, farmowners, and commercial nonliability lines totaling fifty million dollars ($50,000,000) or more shall submit a report to the commissioner that shall only include data and information necessary to understand its reinsurance program placement data and use of probabilistic catastrophic models for the previous year for policies.

(2) Reports filed on or before March 1, 2026, shall include data from the latest available reinsurance treaty year. Subsequent reports shall likewise include data from the latest reinsurance treaty year available when the report is due.

(3) The commissioner may specify the manner of submission, format, and content of the report required pursuant to paragraph (1).

(b) An insurance holding company system, as defined in subdivision (h) of Section 1215, may submit a consolidated report of the information required by this section for all insurers comprising the holding company system.

(c) Upon submission of a report pursuant to this section, the insurer shall promptly respond to inquiries from the commissioner or their representative regarding the information submitted in the report.

article: 10.85. Insurance and Climate Risk Market Intelligence Act


text: Notwithstanding Section 937.3, information submitted to the commissioner under this article shall be confidential pursuant to Section 7929.000 of the Government Code and exempt from the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code). Additionally, that information shall not be subject to subpoena or subpoena duces tecum. Testimony by the commissioner, the commissioner’s staff, an employee of the department, or a person to whom the report required by Section 937.1 was disclosed, regarding the contents of a report submitted pursuant to Section 937.1, shall be inadmissible as evidence in a civil proceeding.


text:
(a) The commissioner shall post to the department’s internet website an aggregated report based on the data collected under Section 937.1.

(b) The report shall include only data and indices aggregated sufficiently to avoid identification of individual company reinsurance practices.

(c) The aggregated report shall not identify an individual respondent or insurer and may be updated every year to reflect new data submitted by admitted insurers under Section 937.1.


text:
(a) Failure to submit a report under Section 937.1 shall subject an admitted insurer to a civil penalty to be fixed by the commissioner, not to exceed five thousand dollars ($5,000) for each 30-day period that the insurer is not in compliance, unless the failure to comply is willful, in which case the civil penalty shall be in an amount not to exceed ten thousand dollars ($10,000) for each 30-day period that the insurer is not in compliance, but not to exceed an aggregate amount of one hundred thousand dollars ($100,000). The commissioner shall collect the amount payable and may bring an action in the name of the people of the State of California to enforce collection. These penalties shall be in addition to other penalties provided by law.

(b) An insurer may request, and the commissioner may grant, a 30-day extension to submit a report pursuant to Section 937.1 if needed due to unintended or unforeseen delays. If the insurer fails to submit a report pursuant to Section 937.1 after the granted 30-day extension has passed, the commissioner may find that the failure to submit the report was willful and increase the civil penalty to an amount not to exceed ten thousand dollars ($10,000) for each 30-day period that the insurer is not in compliance, but not to exceed an aggregate amount of one hundred thousand dollars ($100,000).

(c) The penalty imposed by this section may be appealed by means of a remedy provided by Section 12940, or by Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.

(d) The commissioner may consider an insurer’s violation of this section or article as the basis for other enforcement action against an insurer, as authorized by law.


text: The commissioner may promulgate regulations that further the purposes of this article.


citation: INS § 938

text:
(a) The Department of Insurance shall implement specific data collections on the availability and affordability of insurance for heavy-duty trucks and truck fleets that utilize advanced fuels and related technologies to better understand emerging markets important to the State of California’s climate change goals, expand insurance options by establishing more robust data for consumers and insurers, and identify potential barriers to zero-emission technologies in the transportation sector. The focus of the data collections shall be zero-emission technologies that reduce greenhouse gas emissions and improve air quality when compared with conventional or fully commercialized alternatives, including those defined by the State Air Resources Board.

(b) The department shall issue a bulletin on or before February 1, 2024, to initiate the first data collection. Admitted insurers shall respond on or before May 1, 2024. Data collections shall include surveys and data calls from insurance companies licensed to write insurance through the admitted market. The surveys and data calls shall include, but are not limited to, all of the following information:

(1) Whether an insurance company offers insurance for zero-emission truck options.

(2) Loss experience information per claim over a specified time period, such as annually, including, but not limited to, all of the following:

(A) Type of loss, which may include both liability and physical damage type losses.

(B) Type of medium- and heavy-duty truck.

(C) Date of loss.

(D) Amount of losses incurred and paid in United States dollars.

(3) The number of vehicles covered under insurance policies,

(4) Policy level experience, including, but not limited to, premium per type of medium- and heavy-duty truck insured, the time the truck is insured from effective start date to end date of coverage, and type of coverage, which may include both liability and physical damage type coverage.

(5) Minimum, maximum, and average overall coverage limit of the policy, and per type of medium- and heavy-duty truck within a truck fleet.

(c) The information required by this section shall be submitted to the commissioner. The commissioner may specify, by bulletin, the manner of submission and format of the reporting required pursuant to subdivision (a).

(d) Notwithstanding subdivision (e), the commissioner shall publish information compiled from the data submitted pursuant to this section in the aggregate and shall not identify an individual respondent or insurer, except to support consumer understanding of insurance options as specified in subdivision (a) of Section 938.1. The commissioner shall establish and maintain a link on the department’s internet website that provides public access to the aggregate information required to be disclosed pursuant to this subdivision.

(e) Information submitted to the commissioner, as required by this section, shall be confidential pursuant to Section 7929.000 of the Government Code and exempt from the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code). Additionally, that information shall not be subject to subpoena or subpoena duces tecum. Testimony by the commissioner, the commissioner’s staff, an employee of the department, or a person to whom the reporting required by this section was disclosed, regarding the contents of any report submitted pursuant to this section, shall be inadmissible as evidence in a civil proceeding.

history: (History: Added by Stats. 2023, Ch. 347, Sec. 2. (AB 844) Effective January 1, 2024.)

path: 1. GENERAL RULES GOVERNING INSURANCE > 2. THE BUSINESS OF INSURANCE > 1. General Regulations > 10.9. Zero-Emission Heavy-Duty Truck Data Reporting


text:
(a) The Department of Insurance, in consultation with the State Air Resources Board, shall create a consumer-focused online insurance information resource tool, based on data collected pursuant to Section 938, for the public to use to readily find information and insurance options for battery-powered, hydrogen-powered, or other zero-emission advanced truck technology, including which insurance companies offer insurance for trucks or fleets using different zero-emission technologies and any relevant coverage limits or fleet size specifications, to provide a “one-stop” for the public.

(b) The Department of Insurance, in consultation with the State Air Resources Board, shall provide an assessment of all of the following:

(1) The availability and affordability of insurance for existing and emerging advanced fleet technologies being deployed for heavy-duty vehicles.

(2) The role of insurance markets in meeting the goals of Chapter 4.1 (commencing with Section 39710) of Part 2 of Division 26 of the Health and Safety Code and the greenhouse gas reduction and short-lived climate pollutant emissions reduction goals of the state.

(c) On or before January 1, 2025, the Department of Insurance, in consultation with the State Air Resources Board, shall create a strategy to address current and future insurance gaps for new heavy-duty truck technologies, including consideration for establishing a risk pool and other tools to offer insurance to truck fleet businesses and individual truck owners who are unable to find insurance in the private insurance markets. This strategy shall include an evaluation of all of the following:

(1) The number of companies offering insurance for zero-emission truck fleets, or individual zero-emission trucks, in the current market.

(2) The impact of existing electric and hydrogen truck insurance policies on emissions reductions from the heavy-duty truck sector.

(3) Availability of actuarial loss data for electric and hydrogen trucks, or fleets of those trucks.

(4) Coverage limits most appropriate for zero-emission truck fleets, based on the common size and characteristics of zero-emission trucking fleets.

(5) Additional insurance related information, including information collected pursuant to Section 938.

(6) Important timelines and specific checkpoints for monitoring insurance accessibility in advance of major regulatory deadlines for transitioning medium- and heavy-duty fleets to zero-emission technologies, and state goals for increasing the percentage of zero-emission trucks and buses in the state.

(d) The State Air Resources Board shall provide information necessary to support the Department of Insurance in the development of the evaluation described in subdivision (c), including, but not limited to, the information required by paragraphs (2) and (6) of subdivision (c).

article: 10.9. Zero-Emission Heavy-Duty Truck Data Reporting


citation: INS § 939

text: Except as otherwise expressly provided, all deposits of securities with the commissioner shall be subject to the provisions of this article.

history: (History: Added by Stats. 1937, Ch. 732.)

article: 11. Deposit of Securities

path: 1. GENERAL RULES GOVERNING INSURANCE > 2. THE BUSINESS OF INSURANCE > 1. General Regulations > 11. Deposit of Securities


citation: INS § 940

text: The commissioner shall accept and hold securities in trust for the policyholders or policyholders and creditors of an insurer and for their benefit, whenever (a) the law of another state or of a foreign country requires such a deposit with an officer of this state as a prerequisite to transacting insurance business in that state or country, or (b) the law of this state requires such a deposit with an officer of this state.

history: (History: Amended by Stats. 1965, Ch. 165.)

article: 11. Deposit of Securities


text: The commissioner shall require the payment of fifty-eight dollars ($58) in lawful money of the United States in advance for receiving and processing securities or deposit schedules for securities deposited pursuant to this article. An additional fee of twenty-nine dollars ($29) shall be payable for each withdrawal, substitution, or any other change in the securities comprising such deposit. There shall be no other or additional fee for attaching the commissioner’s seal to a securities deposit schedule for a deposit under this article.

history: (History: Amended by Stats. 1985, Ch. 770, Sec. 5.)

article: 11. Deposit of Securities


citation: INS § 941

text: Such deposited securities shall not be estimated above their par value nor above their market value, except that preferred stock shall be estimated only at its market value.

history: (History: Amended by Stats. 1974, Ch. 588.)

article: 11. Deposit of Securities


citation: INS § 942

text: The commissioner shall permit a deposit of those securities in the State Treasury, subject to the provisions of Section 11691, if applicable. The securities deposited with the Treasurer shall be maintained in electronic book entry or certificate form as security for policyholders or policyholders and creditors of the insurer to whom they respectively belong. The state is responsible for the custody and safe return of any money or securities so deposited. The Treasurer shall deposit these moneys under the provisions of Sections 16370 and 16375 of the Government Code.

history: (History: Amended by Stats. 2009, Ch. 234, Sec. 6. (AB 299) Effective January 1, 2010.)

article: 11. Deposit of Securities


citation: INS § 943

text: So long as the insurer continues solvent the commissioner shall permit it to collect the interest or dividends on the securities so deposited, and from time to time to withdraw any such securities on depositing other securities in the stead of those to be withdrawn. Such new securities shall be of the same value as those withdrawn and of the character mentioned in this article.

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

article: 11. Deposit of Securities


citation: INS § 944

text: Securities deposited under the provisions of this article shall not be withdrawn from the State treasury except upon the written order of the insurer making the deposits, with the endorsement of the commissioner thereon, or upon the order of some court of competent jurisdiction.

article: 11. Deposit of Securities


citation: INS § 945

text: If the deposit is of mortgages, it shall be accompanied either by full abstracts of title with the fees for examination of title, or by policies of title insurance or certificates of title issued by an admitted title insurer. The fees for appraisal of the property shall be paid by the insurer making the deposit. In any case where he ascertains that the expense thereof would not be unreasonable or such as to make the deposit impracticable, the commissioner may require a policy of title insurance or a guaranty that the abstract is correct and that it shows title to be in the proper parties, issued by a corporation authorized to issue such policies or guaranties in the State in which the security or some part thereof is located.

history: (History: Amended by Stats. 1937, Ch. 732.)

article: 11. Deposit of Securities


citation: INS § 946

text: If the deposit is of stocks or bonds, it shall be accompanied by the fees necessary for the appraisal thereof, except as otherwise provided by Article 3, Chapter 1, Part 2, Division 1, of this code.

history: (History: Amended by Stats. 1963, Ch. 1917.)

article: 11. Deposit of Securities


citation: INS § 948

text: Whenever an insurer has deposited with the commissioner the requisite security, in conformity with the requirements of this article, the commissioner shall issue to such insurer, under his official seal, a certificate of such deposit for each State or country requiring such certificate. Such certificate shall state the items and amount of securities so deposited, and their value.

article: 11. Deposit of Securities


citation: INS § 949

text: The commissioner shall require the payment of seventy-two dollars ($72), in advance, as a fee for each certificate issued pursuant to this article.

history: (History: Amended by Stats. 2017, Ch. 534, Sec. 17. (AB 1699) Effective January 1, 2018.)

article: 11. Deposit of Securities


citation: INS § 950

text: Whenever such a depositing insurer has paid, canceled, or reinsured all its unexpired policies outstanding in this State, and all its liabilities under such policies are extinguished, or assumed by other responsible insurers, it may apply to the commissioner for return of its deposit. Such application shall be in writing and verified. If on such application, and from an examination of the books of the insurer and of its officers under oath, the commissioner is satisfied that all of its policies are so paid, canceled, extinguished, or reinsured, he shall deliver up to the insurer the securities deposited.

article: 11. Deposit of Securities


citation: INS § 951

text: Pending such examination the securities requested to be withdrawn may continue subject to withdrawal and substitution as provided by section 943.

article: 11. Deposit of Securities


citation: INS § 952

text: Whenever the laws of any other state or country, by reason of which Section 940 is brought into force, are repealed and abrogated, then any deposit with the commissioner under and by reason of that section shall be delivered up to the depositing insurer.

history: (History: Amended by Stats. 1949, Ch. 1358.)

article: 11. Deposit of Securities


citation: INS § 953

text: Whenever a domestic insurer deposits securities with an officer of this State, in order to enable it to do business in another State pursuant to the laws of such other State, if such insurer thereafter ceases to do business in such other State and files conclusive evidence that all policies written in such other State have expired or been paid, canceled or reinsured, the securities shall on demand be returned to the depositing insurer.

article: 11. Deposit of Securities


citation: INS § 954

text: The commissioner shall make an annual examination of the securities received by him from each insurer. If it appears at any time that the securities deposited by any such insurer amount to less than the sum required for the purposes for which the deposit was made, he shall notify the insurer thereof. Unless the deficiency is made up within thirty days after the notice, the commissioner shall revoke the insurer’s certificate of authority, countermand all the certificates issued to the insurer under this article, and give notice thereof to the officers of the several States to whom the certificate has been transmitted.

article: 11. Deposit of Securities


citation: INS § 955

text: All appraisal fees collected by the commissioner under the provisions of this article shall be paid into the State treasury in trust and withdrawn as provided by law for withdrawal of trust funds from the State treasury.

article: 11. Deposit of Securities


citation: INS § 956

text: An account or accounts in one or more banks or savings and loan associations the accounts of which are insured by an agency or instrumentality of the federal government shall be accepted as securities comprising any part of any deposit made with the commissioner.

history: (History: Amended by Stats. 1971, Ch. 681.)

article: 11. Deposit of Securities


citation: INS § 970

text:
(a) The Wildfire Safety and Risk Mitigation Program is hereby established.

(b) The purpose of the program is to provide funding to one or more universities for the purpose of creating a research and educational center responsible for developing, demonstrating, and deploying a public wildfire catastrophe model that provides significant wildfire safety benefits to California communities and assists alignment of federal, state, and local wildfire risk reduction efforts.

(c) Projects eligible for a grant under this article include either of the following:

(1) The development of a public wildfire catastrophe model that can provide insight for state and local emergency planners, aid wildfire safety efforts that protect lives and property, increase research and development on wildfire risk mitigation strategies, inform actuarial analyses, create training opportunities for students and professionals, and support effective insurance regulation and financial oversight of insurance, risk assessments, and insurance company solvency risks and risk management.

(2) The development of outreach initiatives to identify and educate potential users of a public wildfire catastrophe model, including, but not limited to, state and local emergency planners, wildfire safety groups, agricultural and business groups, research organizations, and educators.

(d) For the purposes of this article, a “public wildfire catastrophe model” means a computerized process that uses the best available science to simulate potential property damage caused by major wildfires and has readily accessible documentation and programs, including, but not limited to, underlying data and algorithms, for use by public agencies, organizations, and individuals.

history: (History: Added by Stats. 2025, Ch. 541, Sec. 1. (SB 429) Effective January 1, 2026. Conditionally operative pursuant to Section 978.)

path: 1. GENERAL RULES GOVERNING INSURANCE > 2. THE BUSINESS OF INSURANCE > 1. General Regulations > 12. Wildfire Safety and Risk Mitigation Program


citation: INS § 971

text:
(a) The Wildfire Safety and Risk Mitigation Program shall be administered by the department.

(b) The department shall award grants on a competitive basis. The department shall establish minimum standards, funding schedules, and procedures for awarding grants. In determining these standards, the department shall do all of the following:

(1) Outline performance criteria and metrics.

(2) Ensure that the program is administered in furtherance of applicable insurance laws and regulations, including, but not limited to, Sections 2642.7, 2644.16, 2644.25, 2644.4.5, and 2644.9 of Title 10 of the California Code of Regulations.

(3) Consider research and development of modeling techniques and actuarial analyses specific to the effectiveness of actions to mitigate and prevent the risk of loss due to wildfires, including those actions at the property, community, and regional scale by utilities and local, state, and federal governments.

(4) Promote publicly accessible information to inform individual property and community-scale mitigation planning, focusing on reducing the primary risk factors for wildfire catastrophes through providing regional and property-level risk assessments.

(5) Leverage, to the maximum extent feasible, federal or private funding.

(6) Ensure activities undertaken pursuant to this article complement efforts by the federal government and private industries, including insurance, to achieve wildfire safety at the community scale.

(7) Ensure activities undertaken pursuant to this article complement wildfire mitigation priorities identified in local and state hazard mitigation plans and in after-action reports following federal major disaster declarations related to wildfires.

(8) Consider recommendations to the commissioner by the Public Wildfire Catastrophe Model Strategy Group.

article: 12. Wildfire Safety and Risk Mitigation Program


citation: INS § 972

text:
In evaluating grant proposals pursuant to this article, the department shall give priority to projects that demonstrate one or more of the following:

(a) A benefit to disadvantaged communities determined under Sections 39711 and 39713 of the Health and Safety Code, vulnerable communities as defined in subdivision (d) of Section 71340 of the Public Resources Code, and where insurance access has become a major challenge for the public due to wildfire risk.

(b) Assistance to state and local governments in protecting communities from devastating wildfire disasters and promoting equitable recovery.

(c) An educational benefit for California students to train a future workforce in the effective use of available data and modeling tools for planning, risk analysis and reduction, and actuarial approaches, with a focus on collaboration between multiple universities and public higher education institutions.

(d) The availability for use by governments and others in running scenarios to help reduce the risks of loss of life and property.

(e) The availability of publicly accessible information useful for property-level risk assessments with sufficient detail to be useful for community and property mitigation planning, focusing on reducing the primary risk factors for wildfire catastrophes, including property- and community-level actions.

(f) The understanding of environmental factors that affect the risk of loss, including extreme temperatures, drought, and other conditions.

(g) The ability to improve consumer information, relief, transparency, and understanding about catastrophe modeling.


citation: INS § 973

text:
(a) The department shall create a framework and multiyear plan with available data for the development, demonstration, and deployment of a public wildfire catastrophe model created pursuant to a grant provided by this article.

(b) The framework and plan shall be published on the department’s internet website upon completion.


citation: INS § 974

text: The Wildfire Safety and Risk Mitigation Account is hereby created within the Insurance Fund. Funds in the account shall fund the development, demonstration, and deployment of public wildfire catastrophe modeling.


citation: INS § 975

text: Upon implementation of the first round of grants issued pursuant to this article, the department shall identify, publish, and make available on its internet website key milestones for the completion of a public wildfire catastrophe model, including additional research, outreach, and operational steps needed to fully establish the model.


citation: INS § 976

text: The department shall provide recommendations to the Senate Committee on Insurance, Assembly Committee on Insurance, Assembly Committee on Emergency Management, Budget Committees, and the Governor for future budget allocations related to this article before September 1, 2026.


citation: INS § 977

text: This article shall not be construed to limit or conflict with the commissioner’s authority regarding rate regulation, or any other provisions of this code.


citation: INS § 978

text: This article shall be operative upon appropriation by the Legislature for these purposes.

history: (History: Added by Stats. 2025, Ch. 541, Sec. 1. (SB 429) Effective January 1, 2026.)


citation: INS § 980

text: As used in this article, “liability” includes liability for losses reported, expenses, taxes, and all other indebtedness not included in those categories.

article: 13. Insolvency

path: 1. GENERAL RULES GOVERNING INSURANCE > 2. THE BUSINESS OF INSURANCE > 1. General Regulations > 13. Insolvency


citation: INS § 984

text: Any mortgage insurer or any mortgage guaranty insurer is insolvent whenever provision for its liabilities and for unearned income would, after exhausting its required insurance surplus, impair its capital paid in so as to reduce it below two hundred fifty thousand dollars ($250,000) or below 75 percent of the aggregate par value of its issued capital stock.

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

article: 13. Insolvency


citation: INS § 985

text:
(a) On or after January 1, 1970, as used in this article and in subdivision (i) of Section 1011, “insolvency” means either of the following:

(1) Any impairment of minimum “paid-in capital” or “capital paid in,” as defined in Section 36, required in the aggregate of an insurer by the provisions of this code for the class, or classes, of insurance that it transacts anywhere.

(2) An inability of the insurer to meet its financial obligations when they are due.

(b) On or after January 1, 1970, an insurer cannot escape the condition of insolvency by being able to provide for all its liabilities and for reinsurance of all outstanding risks. An insurer must also be possessed of additional assets equivalent to the aggregate “paid-in capital” or “capital paid in” required by this code after making provision for all those liabilities and for that reinsurance.

(c) On or after October 1, 1967, as used in this code provision for reinsurance of all outstanding risks and “gross premiums without any deduction, received and receivable upon all unexpired risks” means the greater of: (1) the aggregate amount of actual unearned premiums, or (2) the amount reasonably estimated as being required to reinsure in a solvent admitted insurer the unexpired terms of the risks represented by all outstanding policies.

(d) On or after October 1, 1967, an insurer shall make provision for reinsurance of the outstanding risk on policies that provide premiums that are fully earned at inception and on policies that for any other reason do not provide for a return premium to the insured on cancellation prior to expiration.

(e) On or after October 1, 1967, the commissioner shall prescribe standards for reasonably estimating the amount required to reinsure that will provide adequate safeguards for the policyholders, creditors, and the public.

(f) On or after October 1, 1967, this section shall not be applicable to life, title, mortgage, or mortgage guaranty insurers.

(g) In the application of this section to disability insurance, as defined in Section 106, reserves for unearned premiums and amounts reasonably estimated as required to reinsure outstanding risks shall be determined in accordance with the provisions of Section 997.

history: (History: Amended by Stats. 2013, Ch. 321, Sec. 6. (AB 1391) Effective January 1, 2014.)

article: 13. Insolvency


text: In the case of the insolvency of an admitted insurer, the commissioner shall prepare a report, which shall be a public record, with respect to the causes and factors which contributed to that insolvency. The report shall be submitted to the Governor and to the Legislature no later than one year from the date of the insolvency.

history: (History: Added by Stats. 1990, Ch. 410, Sec. 1.)

article: 13. Insolvency


text: The costs incurred in investigating and preparing the report required by Section 985.5 shall be an expense of administration within the meaning of paragraph (1) of subdivision (a) of Section 1033.

history: (History: Added by Stats. 1990, Ch. 1562, Sec. 1.)

article: 13. Insolvency


citation: INS § 986

text:
A life insurer issuing policies on a reserve basis is insolvent whenever its assets are exceeded by the total of the following: (1) the amount necessary to provide for its liabilities; (2) the amount of paid-in capital, as defined in Section 36, required by the provisions of Sections 10510, 10511, and 10512; (3) the amount necessary to provide for reinsurance of all its outstanding risks at the following rates:

(a) In the case of contracts issued in a foreign country, upon the lives of residents thereof, by a domestic insurer authorized to and doing business in that foreign country, the rates shall be in accordance with the standard of mortality approved by the commissioner, as provided by law.

(b) In the case of group insurance, at the rates required by law for valuation thereof.

(c) In the case of all other outstanding risks written prior to January 1, 1892, at the rates based upon the American Experience Table of Mortality with interest at the rate of 412 percent per annum.

(d) In the case of all its other outstanding risks written from and after December 31, 1891, up to and including December 31, 1907, at rates based upon the Combined Experience or Actuaries’ Table of Mortality with interest at the rate of 4 percent per annum.

(e) In the case of all its other outstanding risks written from and after December 31, 1907, and prior to the operative date as to such risks of Article 3a (commencing with Section 10159.1), Chapter 1, Part 2, Division 2, at rates based upon the American Experience Table of Mortality with interest at the rate of 312 percent per annum, and, where applicable, in accordance with Section 10486.9.

(f) In the case of contracts of disability insurance, as defined in Section 106, according to the standards provided in Section 997.

(g) In the case of all other risks, according to the standards provided in Article 3a (commencing with Section 10489.1), Chapter 5, Part 2, Division 2.

history: (History: Amended by Stats. 1974, Ch. 447.)

article: 13. Insolvency


citation: INS § 987

text: A title insurer is insolvent whenever provision for its liabilities would, after exhausting its required surplus, so far impair its capital paid in as to reduce it below two hundred fifty thousand dollars ($250,000), or below 75 percent of the aggregate par value of its issued capital stock.

history: (History: Amended by Stats. 1961, Ch. 167.)

article: 13. Insolvency


citation: INS § 988

text:
(a) As used in this section:

(1) “Impaired” means a financial situation in which the assets of an insurer are less than the sum of the insurer’s minimum required capital, minimum required surplus and all liabilities as determined in accordance with the requirements for the preparation and filing of the annual statement of an insurer.

(2) “Chief executive officer” means the person, irrespective of title, designated by the board of directors or trustees of an insurer as the person charged with the responsibility of administering and implementing the insurer’s policies and procedures.

(b) Whenever an insurer is impaired, its chief executive officer shall immediately notify the commissioner, in writing of that impairment and shall also immediately notify in writing all of the board of directors or trustees of the insurer. Any officer, director, or trustee of an insurer shall notify the person serving as chief executive officer of the impairment of the insurer in the event the officer, director, or trustee knows or has reason to know that the insurer is impaired.

(c) Any person who violates this section shall, upon conviction thereof, be fined not more than fifty thousand dollars ($50,000) or be imprisoned in the county jail for not more than one year, or both.

history: (History: Added by Stats. 1990, Ch. 302, Sec. 1.)

article: 13. Insolvency


citation: INS § 989

text:
Any person who does any of the following is guilty of a misdemeanor punishable by not more than one year in county jail:

(a) Conceals any property belonging to an insurer.

(b) Transfers or conceals in contemplation of a state insolvency proceeding his or her own property or property belonging to an insurer.

(c) Conceals, destroys, mutilates, alters or makes a false entry in any document which affects or relates to the property of an insurer or withholds any such document from a receiver, trustee or other officer of a court entitled to its possession.

history: (History: Added by Stats. 1990, Ch. 302, Sec. 2.)

article: 13. Insolvency


citation: INS § 995

text:
(a) As used in this article, “contingent compensation arrangement” means an arrangement having as its purpose the payment of a variable commission by the insurer, depending on the overall operating profit on the insurance business produced and handled by the payee, with other provisions of the arrangement auxiliary or incidental to such purpose.

(b) As used in this article, “retrospective commission arrangement” means an arrangement having as its purpose the retention by the insurer of a fixed proportion of the gross premiums, or gross premiums plus policy fees with the balance of the premiums, or premiums plus policy fees, retained by the producer of the business, who assumes to pay therefrom all losses, all subordinate commissions, loss adjustment expenses and his profit, if any, with other provisions of the arrangement auxiliary or incidental to such purpose.

(c) The phrases defined in subdivisions (a) and (b) of this section shall not be deemed to include a contingent commission arrangement of a producer, managing general agent, surplus line broker, or general agent based wholly or partly on underwriting results, unless the arrangement guarantees an agreed return to the insurer which may exceed the underwriting profit actually earned by the insurer on business written through the producer, managing general agent, surplus line broker, or general agent.

(d) As used in this article, “policy fee” means any sum specified in the policy as paid, or payable, in addition to the specified premium, as a consideration for the policy; and does not include expenses customarily charged to the insured which are not recited in the policy.

(e) This article shall apply only to automobile and automobile liability insurance.

history: (History: Added by Stats. 1965, Ch. 1818.)

path: 1. GENERAL RULES GOVERNING INSURANCE > 2. THE BUSINESS OF INSURANCE > 1. General Regulations > 13.3. Obligations of Automobile Insurers and Their Agents Under Contingent and Retrospective Compensation Arrangements


text:
An agent, broker, surplus line broker, general agent or other person operating under a contingent or retrospective compensation arrangement with any insurer shall promptly notify the insurer of every policy claim against the insurer of which he has knowledge with sufficient particulars to enable the insurer to establish an adequate claim reserve. Every insurer so notified of a policy claim or receiving independent knowledge of any policy claim shall promptly make a record thereof and establish a claim reserve for the same.

If the commissioner has reason to believe such agent, broker, general agent or other person is not so notifying the insurer, he shall give the insurer seven days written notice of such belief and if the insurer does not correct the situation within seven days thereafter he may examine such agent, broker, general agent or other person at the expense of the insurer.

In the case of any arrangement whereby the producer receives from the insurer an initial percentage commission to be augmented if loss ratios or profits are more favorable than a stated standard, the insurer shall establish a contingent commission reserve for the amount, if any, which will become due to the producer because of such favorable loss ratios or profits.

Notwithstanding any provision of the contingent or retrospective arrangement, such claims and contingent commission reserves shall be a liability of the insurer.

Nothing contained in this section is intended to prohibit reasonable arrangements between a managing general agent, surplus line broker or general agent and an insurer which provide (a) for the amount of claim reserve to be recommended by the managing general agent, surplus line broker or general agent to the insurer, without particulars other than those needed by the insurer to establish the claim reserve on its books, or (b) for the handling of claim reserves on smaller claims of not more than two thousand dollars ($2,000) each on a bulk or group basis, upon recommendation of the amount by the managing general agent, surplus line broker or general agent, or (c) for the handling of losses not exceeding five hundred dollars ($500) each by the managing general agent, surplus line broker or general agent without establishment of claim reserves, or (d) for the reporting of losses and recommended reserves by the managing general agent, surplus line broker, or general agent on a monthly basis.

article: 13.3. Obligations of Automobile Insurers and Their Agents Under Contingent and Retrospective Compensation Arrangements


text:
An insurer shall not claim as an asset by reason of any provision of a contingent or retrospective compensation arrangement, any account due from the other party pursuant to such an arrangement in an amount in excess of the money actually held by such party in a trusteed bank account for such insurer, unless such party is solvent without giving effect to any contingent or retrospective compensation not specifically acknowledged in writing by the insurer as settled in amount and payable in cash, or usable as an absolute offset against the insurer, within 90 days.

If the commissioner has reason to doubt the solvency of any person dealing with an insurer under a contingent or retrospective commission arrangement, he may examine him at the expense of the insurer.

Nothing contained in this section is intended to modify any provision contained in Section 1735 of this code.


text:
Every person operating under a retrospective or contingent compensation arrangement with any insurer shall report to the insurer within a reasonable time, and policy by policy, the full premium charge including any policy fee made to the insured and the amount of premium and policy fee, if any, collected from the insured in respect to each such policy. Such reporting need not be policy by policy in a case where such arrangement covers only policies which are all uniform in coverage, uniform as to premium and such premium is not over ten dollars ($10) annually.

If the commissioner has reason to believe any such person is not complying with this section, he shall give the insurer seven days written notice of such belief and if the insurer does not correct the situation within seven days thereafter, he may examine such person at the expense of the insurer.

Nothing contained in this section is intended to prohibit or invalidate use of the bordereau method of accounting or accounting by transmission of computer data by a managing general agent, surplus line broker, or general agent, nor to require him to report premium collections to an insurer where the managing general agent, surplus line broker, or general agent is liable to pay the insurer bordereau or accounting balances in full whether collected or not.


text: An insurer, notwithstanding the provisions of any contingent or retrospective compensation arrangement with any person, shall maintain as a liability, as part of its unearned premium reserve the unearned portion of all premium charges made to insureds without deduction for uncollected charges.


text: An insurer, notwithstanding the provisions of any contingent or retrospective compensation arrangement with any person, shall report and pay the premium tax liability set forth in the Revenue and Taxation Code on the basis that it has received the full premium charge including policy fees made to the insureds under policies less return premiums as permitted by law.


text: The provisions of Sections 995.1, 995.2, and 995.3 permitting the commissioner, in certain situations, to examine a person operating under a contingent or retrospective commission arrangement with an insurer at the expense of the insurer, and the other provisions of this article, shall not prevent the insurer from making a contract in advance with such person that in such event the person will reimburse the insurer for such expense. If in the course of examining such person the commissioner finds such person also operates under such contingent or retrospective commission arrangements with other insurers, he may prorate the expense of examination on an equitable basis among all the insurers so dealing with the person.


text: The purposes of Section 816 and the provisions of this article are to promote the solvency of insurers and the producers dealing with them under contracts, arrangements and practices therein described; to protect the public from unjustifiable claims practices and the inconvenience, hardship and possible loss attendant upon the insolvency of any of the insurers or persons described therein; and to prevent any frauds or mistakes which may arise from any of the contracts, arrangements or practices described therein. In furtherance of these purposes the commissioner shall at least 90 days prior to charging any person with a violation of Section 816 or the provisions of this article make reasonable rules and regulations clarifying or defining any word, term or phrase used in Section 816 or in this article, including establishment of detailed standards to determine solvency as that word is used in Section 995.2. Such rules and regulations shall be adopted, amended or repealed in accordance with the procedures provided in Chapter 4.5 (commencing with Section 11371) of Part 1 of Division 3 of Title 2 of the Government Code.


citation: INS § 997

text:
(a) For statement purposes as defined in Article 10 (commencing with Section 900), for insolvency calculations as defined in Article 13 (commencing with Section 980), and for the valuation of the liabilities of insurers for all other purposes, every admitted insurer shall maintain an active life reserve which shall place a sound value on its liabilities under all disability policies and which shall not be less than the reserve according to the standards set forth in regulations issued by the commissioner and, in no event, less in the aggregate than the pro rata gross unearned premium reserve for the policies. The promulgation of the regulations by the commissioner or any changes or amendments thereof shall be in accordance with the procedure provided in Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code.

Subdivisions (b), (c), and (d) shall control the amounts of reserves and liabilities, other than for specific claim losses, upon all individual disability policies until the effective date of regulations issued by the commissioner as provided in the next preceding paragraph. The regulations, in lieu of subdivisions (b), (c), and (d), shall control the amounts of the reserves and liabilities during the time the regulations continue in force. In the event the regulations shall cease to be in effect, the reserves and liabilities again shall be controlled by subdivisions (b), (c), and (d) during the time no such regulations shall be in force.

(b) Every admitted insurer which issues one or more of the following three types of individual disability policies shall maintain a reserve not less than the minimum reserve required under this subdivision:

(1) Policies which are guaranteed renewable for life or to a specified age at guaranteed premium rates.

(2) Policies which are guaranteed renewable for life or to a specified age but under which the insurer has reserved the right to change the scale of premiums.

(3) Policies, other than those described in paragraph (1) of subdivision (c), in which the insurer has reserved the right to cancel or to refuse renewal for one or more reasons, but has agreed implicitly or explicitly that, prior to a specified time or age, it will not cancel or decline renewal solely because of deterioration of health after issue.

During the period within which the renewability of the policy is guaranteed or the insurer’s right to cancel the policy or to refuse renewal thereof is limited, the minimum reserve shall be an amount computed on the basis of two-year preliminary term tabular mean reserves employing the following assumptions:

Mortality and Interest: those assumptions specified in Article 3 (commencing with Section 10478) and Article 3a (commencing with Section 10489.1) of Chapter 5 of Part 2 of Division 2, for the determination of minimum policy reserve liabilities for ordinary life insurance.

Morbidity or other contingency: any tables adopted by the National Association of Insurance Commissioners, or its successor, that is approved by regulation promulgated by the commissioner for use in determining the minimum standard of valuation for use in valuing individual disability insurance policies, or any modification of these tables approved by the commissioner, or any tables based upon individual insurer’s own experience and approved by the commissioner.

For each benefit, each company shall establish reserves that place a sound value on the liabilities for the benefit.

These mean reserves shall be diminished or offset by appropriate credit for the valuation net deferred premiums. In no event, however, shall the aggregate reserves for all policies valued on the mean reserve basis, diminished by any credit for deferred premiums, be less than the gross pro rata unearned premiums under the policies.

Negative reserves for any benefit may be offset against positive reserves for other benefits in the same individual or family policy, but if all benefits of the policy collectively develop a negative reserve, credit shall not be taken for the amount.

(c) Every admitted insurer which issues one or more of the following types of individual disability policies shall maintain the minimum unearned premium reserve required under this subdivision:

(1) Selected group disability policies issued under or subject to an agreement that, except for stated reasons, the insurer will not cancel or refuse to renew the coverage of individual insureds prior to a specified age unless all coverage under the same group is terminated.

(2) Any type of individual disability policy not included in one of the three types described in subdivision (b) and not included in paragraph (1) of this subdivision.

The minimum unearned premium reserve shall be the pro rata unearned portion of gross premiums in force and, subject to the limitations contained in Sections 922.2 to 922.8, inclusive, shall be reduced by premiums paid or credited for risks reinsured in solvent insurers.

(d) Provided the reserve on all policies to which the method or basis is applied is not less in the aggregate than the required amount determined according to the applicable standards specified in subdivisions (b) and (c), an insurer may use any reasonable assumptions as to the interest rate, mortality rates or the rates of morbidity or other contingency, and may introduce an assumption as to the voluntary termination of policies. Also, subject to the preceding conditions, the insurer may employ methods other than the methods stated in subdivisions (b) and (c) in determining a sound value of its liabilities under such policies, including, but not limited to, any of the following:

(1) The use of midterminal reserves in addition to either the gross pro rata unearned premium reserves described in subdivision (c) or the net pro rata unearned premium reserve.

(2) Optional use of either the level premium, the one-year preliminary term or the two-year preliminary term method.

(3) Prospective valuation on the basis of actual gross premiums with reasonable allowance for future expense.

(4) The use of approximations such as those involving age groupings, groupings of several years of issue, average amounts of indemnity.

(5) The computation of the reserve for one policy benefit as a percentage of, or by other relation to, the aggregate policy reserves, exclusive of the benefit or benefits so valued.

(6) The use of a composite annual claim cost for all or any combination of the benefits included in the policies valued.

For statement purposes the net reserve liability for active lives may be shown as the mean reserve with offsetting asset items for net unpaid and deferred premiums or it may be shown as the excess of the mean reserve over the amount of net unpaid and deferred premiums, or, regardless of the underlying method of calculation, it may be divided between the gross pro rata unearned premium reserve and a balancing item for the “additional reserve.”

history: (History: Amended by Stats. 1984, Ch. 193, Sec. 89.)

article: 13.5. Disability Insurance Reserves

path: 1. GENERAL RULES GOVERNING INSURANCE > 2. THE BUSINESS OF INSURANCE > 1. General Regulations > 13.5. Disability Insurance Reserves


citation: INS § 1010

text:
(a) The provisions of this article shall apply to all persons, except the State Compensation Insurance Fund, subject to examination by the commissioner, or purporting to do insurance business in this state, or in the process of organization with intent to do such business therein, or from whom the commissioner’s certificate of authority is required for the transaction of business, or whose certificate of authority is revoked or suspended.

(b) Notwithstanding subdivision (a), if any of the conditions set forth in Section 1011 exists with respect to the State Compensation Insurance Fund, and the commissioner would otherwise file a verified application with the superior court or proceed under Section 1013 against the fund, the commissioner shall instead issue a report to the Governor, the President pro Tempore of the Senate, and the Speaker of the Assembly setting forth the conditions that exist and recommending a course to remedy those conditions. The Governor, in consultation with the Legislature, shall direct a course of action to be implemented by the fund’s board of directors, or if additional legislative action is necessary, recommend a course of action to the Legislature, or both.

history: (History: Amended by Stats. 2006, Ch. 740, Sec. 3.9. Effective January 1, 2007.)

path: 1. GENERAL RULES GOVERNING INSURANCE > 2. THE BUSINESS OF INSURANCE > 1. General Regulations > 14. Proceedings in Cases of Insolvency and Delinquency