CHAPTER 2. Incorporated Insurers [1140. - 1260.]
Chapter 2 enacted by Stats. 1935, Ch. 145.
§§ 1140–1260 · 123 sections
ARTICLE 1. General §§ 1140–1142 · 5 sections
- § 1140 Except as otherwise provided in this code, incorporated insurers are subject to the provisions of the general corporation law in like manner with other…
- § 1140.1 (a) A domestic incorporated life insurer may be organized under the Nonprofit Mutual Benefit Corporation Law. With the prior consent of the commissioner, an…
- § 1140.5 (a) Notwithstanding any other law, a copy of every form of proxy or written consent or authorization for use at any meeting or proceeding of shareholders or…
- § 1141 No director, trustee, officer or agent of any insurer shall be subject to personal liability by reason of any payment or any determination not to contest or…
- § 1142 In situations of hardship, financial embarrassment or where other good cause is shown the commissioner may, in his discretion, by written order, permit an…
ARTICLE 2. Restrictions on Activities §§ 1152–1155 · 5 sections
- § 1152 (a) Domestic incorporated stock insurers, except those governed by Sections 10530, 12373, and 12640.06, shall be governed by the provisions of this section…
- § 1153 An insurer shall not be admitted within three years from and after the time when it commences business as an insurer, nor within three years from and after the…
- § 1153.5 An admitted insurer which has been in business as an insurer less than three years from and after the time when it commenced business as an insurer shall…
- § 1154 After the period specified in Sections 1153 and 1153.5, the requirements of those sections shall no longer be applicable to any insurer specified therein and…
- § 1155 An insurer, within such limits as may be set by the board of directors, may contribute to community funds or to charitable, philanthropic, or benevolent…
ARTICLE 3. General Investments §§ 1170–1182 · 16 sections
- § 1170 Domestic incorporated insurers may invest their assets in the purchase of any of the securities specified in this article, or in loans upon such securities, if…
- § 1171 Such insurers may invest in obligations of the United States or obligations for which the faith and credit of the United States are pledged for payment of…
- § 1171.5 Such insurers may invest in obligations of the United States Postal Service.
- § 1172 Such insurers may invest in obligations of the Dominion of Canada, or the Commonwealth of Puerto Rico, or of any province of the Dominion of Canada, or of any…
- § 1173 Such insurers may invest in obligations issued under authority of law by any county, municipality, or school district in this State or in any other state, or…
- § 1174 Such insurers may invest in obligations of this State or those for which the faith and credit of this State are pledged for the payment of principal and…
- § 1175 Such insurers may invest in bonds of any permanent road division in this state, or any district organized under the laws of this state, when such bonds are…
- § 1175.5 Such insurers may invest in bonds of any county water district operating under Division 12 of the Water Code.
- § 1176.5 Such insurers may make, invest in or purchase loans which are guaranteed by the United States or any agency thereof pursuant to the provisions of the…
- § 1176.6 None of the provisions of the Insurance Code limiting or restricting loans by insurers or prescribing the security therefor shall apply to any loans which are…
- § 1177 Such insurers may invest in notes or bonds secured by mortgage guaranteed as to payment by a policy of mortgage insurance, and mortgage participation…
- § 1178 Such insurers may invest in collateral trust bonds or notes, secured by any of the following: (a) A deposit of obligations authorized for investment by this…
- § 1179 Such insurers may invest in farm loan bonds, consolidated farm loan bonds, collateral trust debentures, consolidated debentures, or other obligations issued…
- § 1180 Such insurers may invest in bonds issued under the “Home Owners’ Loan Act of 1933”; bonds, debentures and notes issued by any federal home loan bank, or…
- § 1181 Such insurers may also invest in registered warrants of this State, issued pursuant to law.
- § 1182 Domestic incorporated insurers may invest in an account or accounts in one or more banks, savings and loan associations, or credit unions to the extent the…
ARTICLE 3.5. Disclosure of Material Transactions §§ 1185–1187 · 3 sections
- § 1185 (a) Every domestic incorporated insurer shall file a report with the commissioner disclosing material acquisitions and dispositions of assets or material…
- § 1186 (a) No acquisitions or dispositions of assets shall be reported pursuant to Section 1185 if the acquisitions or dispositions are not material. For purposes of…
- § 1187 (a) No nonrenewals, cancellations, or revisions of ceded reinsurance agreements shall be reported pursuant to Section 1185 if the nonrenewals, cancellations,…
ARTICLE 4. Property Authorized for Excess Funds Investments §§ 1190–1202 · 40 sections
- § 1190 Any domestic incorporated insurer, which maintains in cash on hand or on deposit in a national or state bank, or in securities specified in Article 3…
- § 1191 Excess funds investments may be made in the stock of any corporation organized and carrying on business under the laws of this or any other state, or of the…
- § 1191.1 Excess fund investments may be made in the purchase and sale of exchange traded call options on common stock pursuant to this section. An insurer may sell…
- § 1191.5 (a)Excess fund investments may be made by a domestic life insurer having admitted assets aggregating in value not less than one hundred million dollars…
- § 1192 Excess funds investments may be made in: (a) Interest-bearing obligations issued by a nonaffiliate institution, as defined in paragraph (5) of subdivision (f)…
- § 1192.1 Excess funds investments may be made in bonds, notes or other obligations issued, assumed or guaranteed by the International Bank for Reconstruction and…
- § 1192.2 An insurer may lend on the security of a first lien on an unencumbered leasehold on real property if: (a) The real property subject to the leasehold is…
- § 1192.3 Excess fund investments may be made by a life insurer having admitted assets aggregating in value not less than two hundred million dollars ($200,000,000) in…
- § 1192.4 No domestic insurer shall have more than 10 percent of its capital and surplus invested in stock of corporations organized under the laws of the Dominion of…
- § 1192.5 Excess funds investments may be made in all deposits and debt obligations of banks or savings and loan associations whose accounts are insured by an agency or…
- § 1192.6 (a) An insurer, except an insurer authorized to transact mortgage guaranty insurance as defined in Section 119, may invest in a mortgage, mortgage-backed bond,…
- § 1192.7 (a) A domestic insurer having admitted assets aggregating in value not less than one hundred million dollars ($100,000,000) may make excess funds investments…
- § 1192.8 (a) A domestic life insurer having admitted assets aggregating in value not less than one hundred million dollars ($100,000,000) may make excess fund…
- § 1192.9 Notwithstanding Section 1100, a domestic insurer may make excess funds investments in shares of an investment company, as defined in the Federal Investment…
- § 1192.95 (a) Notwithstanding Section 1100, an insurer may make excess funds investments in investment pools and cash management pools established pursuant to this…
- § 1192.10 (a) Excess funds investments may be made in securities evidencing an undivided interest in, the right to receive payments from, or payable primarily from…
- § 1193 Excess funds investments may be made in bonds of any permanent road division, or any district of any state when such bonds are legal investments for savings…
- § 1194 Excess funds investments may be made in bonds issued by any county, municipality, or school district in this State to represent assessments for local…
- § 1194.1 Excess funds investments may be made in bonds issued pursuant to the Improvement Bond Act of 1915.
- § 1194.5 Excess funds investments may be made in any debt obligation issued by the United States, a federal agency or entity authorized to issue debt obligations by…
- § 1194.6 (a) Excess funds investments may be made by an insurer in bonds, notes, or other evidences of indebtedness payable in United States dollars, and issued by a…
- § 1194.7 Excess funds investments may be made in the stock of a Federal home loan bank. Any domestic incorporated insurer investing in the stock of a Federal home loan…
- § 1194.8 (a) Excess fund investments may be made by a domestic insurer in real estate and leases thereof and in making improvements thereon for business or residential…
- § 1194.81 Domestic incorporated insurers may invest in notes or bonds secured by a mortgage or other first lien upon unencumbered real property meeting the criteria of…
- § 1194.82 (a) An insurer may invest in notes or bonds secured by second mortgages or other second liens, including all inclusive or wraparound mortgages or liens, upon…
- § 1194.85 In any case in which a domestic insurer has requested the approval of the commissioner to make the investments specified in subdivision (a) or (c) of Section…
- § 1194.86 Every admitted incorporated insurer may purchase, hold, or convey real estate only for the following purposes and in the following manner: (a) The building in…
- § 1194.87 If, after a hearing, the commissioner is satisfied that an insurer is carrying upon its books any parcel or parcels of real estate at values exceeding the…
- § 1194.88 Every admitted incorporated insurer may, for the protection or enhancement of the value of real property acquired under the provisions of Section 1194.86, use…
- § 1194.9 If the commissioner shall decide, after due notice and hearing that the interest of any company having real estate acquired pursuant to the provisions of…
- § 1194.95 Excess funds investments may be made in an electronic computer or data processing machine or system to be used in connection with the business of the insurer;…
- § 1195 This article does not authorize investments in any obligation unless the obligation is interest or income-bearing or dividend-paying. An obligation is interest…
- § 1196 Excess funds investments shall not be made in any stock or obligation unless: (a) The stock or obligation qualifies as a sound investment. (b) In case of a…
- § 1196.1 (a) No domestic insurer shall acquire, directly or indirectly, any medium grade or lower grade obligation of any institution if, after giving effect to any…
- § 1197 Excess funds investments shall not be made in a loan or any other obligation to any one borrower or obligor, including all affiliates which shall be treated as…
- § 1198 Excess funds investments shall not be made in purchases of or loans upon shares of the capital stock of any one corporation in an amount exceeding 10 percent…
- § 1199 No domestic incorporated fire, life or marine insurer shall make excess funds investments in purchases of, or loans upon, more than 30 percent of the total in…
- § 1200 An excess funds investment shall not be made unless authorized or approved by the directors of the investor or by a committee thereof charged with the duty of…
- § 1201 The entry of approval shall show: (a) The fact of making such investment. (b) The amount thereof. (c) The name of each director voting to approve the…
- § 1202 The commissioner may, in his discretion and after hearing, by written order require the disposal of any investments made in violation of the provisions of this…
ARTICLE 4.5. Leeway Law § 1210 · 1 section
- § 1210 (a) A domestic incorporated insurer, after investing an amount equal to its required minimum paid-in capital in securities specified in Article 3 (commencing…
ARTICLE 4.6. Hedging §§ 1211–1212 · 2 sections
- § 1211 (a) For the purposes of this section the following definitions shall apply: (1) “Aggregate counterparty exposure” means the sum of the aggregate statement…
- § 1212 (a) Any domestic incorporated insurer having aggregate capital and surplus as of the preceding December 31 of at least twenty-five million dollars…
ARTICLE 4.7. Insurance Holding Company System Regulatory Act §§ 1215–1215.18 · 20 sections
- § 1215 As used in this article, the following terms shall have the respective meanings hereafter set forth, unless the context shall otherwise require: (a) An…
- § 1215.1 (a) Any domestic insurer, either by itself or in cooperation with one or more persons, may organize or acquire one or more subsidiaries subject to the…
- § 1215.2 (a) A person shall not make a tender offer for, or a request or invitation for tenders of, or enter into an agreement to exchange securities for or acquire in…
- § 1215.3 The following shall be violations of this article: (a) The failure to file the statement required under subdivision (a) of Section 1215.2. (b) Effectuation or…
- § 1215.4 (a) Every insurer that is authorized to do business in this state and that is a member of an insurance holding company system shall register with the…
- § 1215.5 (a) Transactions by registered insurers with their affiliates are subject to the following standards: (1) The terms shall be fair and reasonable and consistent…
- § 1215.6 (a) Subject to the limitation contained in this section, and in addition to the powers which the commissioner has under Article 4 (commencing with Section 730)…
- § 1215.7 (a) With respect to any insurer registered under Section 1215.4, and in accordance with subdivision (c), the commissioner shall also have the power to…
- § 1215.75 (a) (1) The commissioner is authorized to act as the groupwide supervisor for any internationally active insurance group in accordance with this section.…
- § 1215.8 (a) All information, documents, and copies thereof obtained by or disclosed to the commissioner or any other person in the course of an examination or…
- § 1215.9 The commissioner may, upon notice and opportunity for all interested persons to be heard, issue such rules, regulations, and orders as shall be necessary to…
- § 1215.10 (a) Whenever it appears to the commissioner that any insurer or any director, officer, employee, or agent thereof has committed or is about to commit a…
- § 1215.11 (a) Any insurer that fails to file a statement, report, or request for approval required by this article in a timely manner shall be subject to the late filing…
- § 1215.12 Whenever it appears to the commissioner that any person has committed a violation of this article which so impairs the financial condition of a domestic…
- § 1215.13 Whenever it appears to the commissioner that any person has committed a violation of this article which makes the continued operation of an insurer contrary to…
- § 1215.14 (a) For the purposes of this article only, every foreign insurer, except an insurer described in Article 2 (commencing with Section 12350) of Chapter 1 of Part…
- § 1215.15 (a) The provisions of this article shall not apply to any party or entity participating in any investment by a home protection company in its subsidiary or…
- § 1215.16 All laws and parts of laws of this state inconsistent with this article are hereby superseded with respect to matters covered by this article.
- § 1215.17 If any provision of this article or the application thereof to any person or circumstance is held invalid, the invalidity shall not affect other provisions or…
- § 1215.18 (a) If an order for liquidation or rehabilitation of a domestic insurer has been entered, the receiver appointed under that order shall have a right to recover…
ARTICLE 4.8. Business Transacted with Producer Controlled Insurer §§ 1216–1216.6 · 7 sections
- § 1216 This article may be cited as the Business Transacted with Producer Controlled Insurer Act.
- § 1216.1 As used in this article, the following terms have the following meanings: (a) “Accredited state” means a state in which the insurance department or regulatory…
- § 1216.2 This article shall apply to insurers as defined in subdivision (e) of Section 1216.1, either domiciled in this state or domiciled in a state that is not an…
- § 1216.3 (a) (1) The provisions of this section shall apply if, in any calendar year, the aggregate amount of gross written premium of business placed with a controlled…
- § 1216.4 The controlling producer shall, prior to the effective date of the policy, deliver written notice to the prospective insured disclosing the relationship…
- § 1216.5 (a) (1) If the commissioner believes that the controlling producer or any other person has not materially complied with this article, or any regulation or…
- § 1216.6 Controlled insurers and controlling producers who are not in compliance with Section 1216.3 of this act on its effective date shall have 60 days to do so and…
ARTICLE 5. Life Insurance Policies §§ 1220–1221 · 2 sections
- § 1220 Domestic incorporated life insurers may also invest any funds in loans upon any of their own policies in an amount not exceeding the reserve against such…
- § 1221 The amount thus loaned by an insurer upon its own policies shall be credited to the insurer in determining the amount of deposit required to comply with the…
ARTICLE 5.5. Life Insurance Policy Loans §§ 1230–1239.5 · 11 sections
- § 1230 The Legislature declares that the purpose of this article is to establish guidelines for life insurers to use in life insurance policies which contain a…
- § 1231 For the purposes of this article the “published monthly average” means: (a) Moody’s Corporate Bond Yield Average-Monthly Average Corporates as published by…
- § 1232 (a) Policies issued on or after the effective date of this article shall provide for policy loan interest rates at either of the following rates: (1) A…
- § 1233 If the maximum rate of interest is determined pursuant to paragraph (2) of subdivision (a) of Section 1232, the policy shall contain a provision setting forth…
- § 1234 The maximum rate for each policy shall be determined at regular intervals at least once every 12 months, but not more frequently than once in any three-month…
- § 1235 The life insurer shall do all of the following: (1) Notify the policyholder at the time a cash loan is made of the initial rate of interest on the loan. (2)…
- § 1236 The loan value of the policy shall be equivalent to the cash surrender value of the policy, the minimum requirements of which are specified in Sections 10160…
- § 1237 The substance of the pertinent provisions of Section 1232 and 1233 shall be set forth in the policies to which the provisions apply.
- § 1238 For the purposes of this section: (1) The rate of interest on policy loans permitted under this section includes the interest rate charged on reinstatement of…
- § 1239 No other provision of law shall apply to policy loan interest rates unless made specifically applicable to these rates.
- § 1239.5 The provisions of this article shall not apply to any insurance contract issued before the effective date of this article unless the policyholder agrees in…
ARTICLE 6. Foreign Investments §§ 1240–1242 · 5 sections
- § 1240 The following definitions shall apply in this article: (a) “Foreign currency” means a currency other than that of the United States. (b) “Foreign investment”…
- § 1241 (a) Subject to the limitation in Section 1242, and except for those foreign investments permitted under Section 1192.95, a domestic insurer may acquire foreign…
- § 1241.1 (a) No domestic insurer shall acquire any investment respecting a foreign jurisdiction, or any investment denominated in the currency of that foreign…
- § 1241.2 (a) The Legislature finds and declares all of the following: (1) The federal Securities and Exchange Commission has determined that business activities in…
- § 1242 (a) (1) Except as otherwise specified in Section 1241, a domestic insurer shall not acquire directly or indirectly through an investment subsidiary, an…
ARTICLE 7. Valuation of Investments §§ 1250–1254 · 5 sections
- § 1250 When any domestic incorporated insurer has, pursuant to the laws of this State, invested any of its funds in purchases of, or loans upon, the stock or…
- § 1251 A stock, bond or other evidence of debt if in default as to principal or interest, or if not amply secured, shall not be valued as an asset of the insurer…
- § 1252 All bonds or other evidences of debt held by an admitted incorporated insurer if amply secured and if not in default as to principal or interest may, in the…
- § 1253 Any such insurer may report such bonds or other evidence of debt at market value or book value, but in no event at an aggregate value exceeding the aggregate…
- § 1254 Any asset of an insurer which is found by the commissioner to be insolvent or threatened with insolvency shall be reduced in value, if necessary, to reflect…
ARTICLE 8. Reinsurance Transactions § 1260 · 1 section
- § 1260 Incorporated insurers or reciprocal insurers who are members of what is commonly known as a “group” or “fleet” may enter into reinsurance transactions between…