CHAPTER 4. General Mutual Insurers
Chapter 4 added by Stats. 1963, Ch. 1772.
§§ 4010–4097.20 · 63 sections
ARTICLE 1. General Provisions §§ 4010–4019 · 12 sections
- § 4010 A “mutual” insurer is an insurance corporation without capital stock owned by its policyholders collectively, who have the right to vote in the election of its…
- § 4011 The provisions of Section 36 shall apply to domestic mutual insurers as well as foreign mutual insurers.
- § 4012 Domestic mutual insurers, incorporating or qualifying to transact any or all of the classes of insurance designated in Sections 100 through 123 and 700. 01,…
- § 4013 (a) Each policyholder of a domestic mutual insurer, other than the holder of a reinsurance contract, is a member of the insurer during the policy period, as…
- § 4014 Any person, government or governmental agency, state or political subdivision thereof, public or private corporation, board, association, estate, trustee or…
- § 4015 With respect to the management, records, and affairs of a domestic mutual insurer qualified to transact any or all of the classes of insurance designated in…
- § 4016 Each member of a domestic mutual insurer is entitled to one vote upon each matter coming to a vote at meetings of members.
- § 4016.1 Notice of all meetings of members whether annual or special shall be given in writing to the members entitled to vote by the secretary, or an assistant…
- § 4016.2 (a) The presence in person or by proxy of 5 percent of the members of a domestic mutual insurer entitled to vote at any meeting shall constitute a quorum for…
- § 4017 A member shall have the right to vote in person or by his written proxy filed with the corporate secretary not less than five days prior to the meeting. No…
- § 4018 No member’s vote upon any proposal to divest the insurer of its business or assets, or the major part thereof, shall be registered or taken except in person or…
- § 4019 This chapter does not apply to a mutual insurer that has converted to a mutual legal reserve insurer pursuant to former Chapter 9 (commencing with Section…
ARTICLE 2. Directors §§ 4020–4023 · 4 sections
- § 4020 The affairs of every domestic mutual insurer shall be managed by a board of directors consisting of not less than 5 directors nor more than 15 directors.
- § 4021 Directors shall be elected by the members of a domestic mutual insurer at the annual meeting of members. Directors may be elected for terms of not more than…
- § 4022 A director of a mutual insurer shall be a policyholder thereof.
- § 4023 As to an insurer operating as an authorized insurer only in the State of California, a majority of the members of the insurer’s board of directors shall be…
ARTICLE 3. Management and Exclusive Agency Contracts §§ 4030–4034 · 5 sections
- § 4030 A domestic mutual insurer shall not hereafter make any contract whereby any person is granted or is to enjoy in fact the management of the insurer to the…
- § 4031 Any such contract shall provide that any such manager or producer of its business shall within 90 days after expiration of each calendar year furnish the…
- § 4032 The commissioner shall disapprove any such contract if he finds that it: (a) Subjects the insurer to excessive charges; or (b) Is to extend for an unreasonable…
- § 4033 The commissioner may, after a hearing held thereon, withdraw his approval of any such contract theretofore approved by him, if he finds that the bases of his…
- § 4034 The holder of any such contract described in this Article shall be subject to examination by the commissioner pursuant to Article 4 (beginning with Section…
ARTICLE 4. Loans §§ 4040–4044 · 3 sections
- § 4040 A mutual insurer may borrow money to defray the expenses of its organization, provide it with surplus funds, or for any purpose of its business, upon a written…
- § 4042 The issuance of any document evidencing any such loan shall require the commissioner’s securities permit under Article 8 of Chapter 1, Part 2, Division 1…
- § 4044 This section shall not apply to loans obtained by the insurer in ordinary course of business from banks and other financial institutions, nor to loans secured…
ARTICLE 5. Dividends to Policyholders §§ 4050–4052 · 3 sections
- § 4050 The directors of a domestic mutual insurer may from time to time apportion and pay or credit to its members dividends only out of that part of its surplus…
- § 4051 A dividend otherwise proper may be payable out of such savings, earnings, and gains even though the insurer’s total surplus is then less than the aggregate of…
- § 4052 The payment of any such dividends on a workers’ compensation policy shall be subject to the provisions of Section 11738 and for that purpose a mutual policy…
ARTICLE 6. Nonassessable Policies §§ 4060–4064 · 5 sections
- § 4060 A domestic mutual insurer while maintaining unimpaired surplus funds not less in amount than one and one-half times the minimum paid-in capital stock required…
- § 4061 The commissioner shall not authorize a domestic insurer to extinguish the contingent liability of any of its members or in any of its policies to be issued,…
- § 4062 A foreign or alien mutual insurer may issue nonassessable policies to its members in this State pursuant to its charter and the laws of its domicile.
- § 4063 The commissioner shall revoke the certificate of a domestic mutual insurer to issue policies without contingent liability if (a) At any time the insurer’s…
- § 4064 During the absence of such certificate the insurer shall not issue any policy without providing therein for the contingent liability of the policyholder, nor…
ARTICLE 7. Insolvency § 4070 · 1 section
- § 4070 Such an insurer is insolvent if its surplus becomes less than the amount of paid-in capital required of a capital stock company to qualify to transact the same…
ARTICLE 8. Applicable Insurance Laws §§ 4080–4081 · 2 sections
- § 4080 Such an insurer shall be subject to all the provisions of this code and all the applicable rules and regulations of the commissioner. Such code provisions and…
- § 4081 Any county mutual fire insurer, or two or more such insurers, may merge into a general mutual insurer described in this chapter by following the procedure in…
ARTICLE 9. Merger, Consolidation, Reinsurance, or Transfer of Assets and Liabilities §§ 4090–4096 · 7 sections
- § 4090 By following the procedure specified in this article, any domestic mutual insurer described in this article may merge, consolidate, or otherwise unite with or…
- § 4091 The plan and agreement by which any such transaction is to be effected shall be approved by a resolution of the majority of the board of directors of each…
- § 4092 When any such plan and agreement shall have been approved by the commissioner, with any changes required by him, the same shall be approved in the case of each…
- § 4093 If the vote is in the affirmative, a certified copy of all proceedings relating to the proposed transaction shall be filed with the commissioner. If one of the…
- § 4094 Any plan of merger, consolidation, or other unification under this article shall provide that all rights and properties of the parties to the plan of merger,…
- § 4095 In the event a mutual insurer is merged, consolidated, or part of a reorganization under the procedures specified in this article, and the surviving,…
- § 4096 In the event a domestic mutual insurer is merged, consolidated, or a part of a reorganization under the procedures specified in this article, and the…
ARTICLE 10. Conversion of an Incorporated Medical Malpractice Mutual Insurer into an Incorporated Stock Insurer §§ 4097–4097.20 · 21 sections
- § 4097 (a) A domestic incorporated medical malpractice mutual insurer, issuing nonassessable policies on a reserve basis may be converted into an incorporated stock…
- § 4097.01 The definitions in this section apply to the following terms when used in this article. (a) “Adoption date” means the date the board of directors adopts the…
- § 4097.02 The plan of conversion shall include appropriate proceedings for amending the mutual company’s articles of incorporation to give effect to the conversion from…
- § 4097.03 For the conversion of a medical malpractice mutual insurer, the plan of conversion shall provide for either a demutualization in compliance with Section…
- § 4097.04 For the demutualization of a mutual insurer into a stock insurer or for the demutualization of a mutual holding company into a stock corporation, the plan for…
- § 4097.05 A plan of conversion adopted by a medical malpractice mutual insurer to establish a mutual holding company shall provide that the medical malpractice mutual…
- § 4097.06 (a) The commissioner shall examine the plan submitted pursuant to subdivision (b) of Section 4097.02. If the plan provides for the establishment of a mutual…
- § 4097.07 The meeting of members prescribed by subdivision (c) of Section 4097.02 shall be called by the board of directors, the chairperson of the board, or the…
- § 4097.08 Nothing in this article shall be deemed to prohibit the inclusion in the plan of conversion of provisions under which the insurer’s officers, directors,…
- § 4097.09 No director, officer, agent, or employee of the mutual company shall receive any fee, commission, or other valuable consideration whatsoever, other than…
- § 4097.10 At any time before that plan of conversion becomes effective as provided in Section 4097.11, the mutual company may, by resolution of at least two-thirds of…
- § 4097.11 (a) Upon consent by the commissioner to the plan of conversion of a mutual insurer and filing of the plan of conversion in accordance with the provisions of…
- § 4097.12 (a) Upon the effective date of a plan of conversion in accordance with Section 4097.05, the mutual insurer immediately becomes a stock corporation, the…
- § 4097.13 (a) Prior to, and for a period of five years following, the effective date of the plan of conversion, no person or group of persons acting in concert shall…
- § 4097.14 Unless otherwise provided in the plan of conversion, the directors and officers of the mutual company shall serve as directors and officers of the converted…
- § 4097.15 (a) Notwithstanding any other provision of law and except as otherwise provided in subdivision (b), actions concerning any plan of conversion, proposed plan of…
- § 4097.16 The offer or sale of securities, including any debt securities, issued pursuant to the plan of conversion developed and approved in accordance with the…
- § 4097.17 The commissioner shall have the authority from time to time, to make, amend, and rescind any rules and regulations as may be necessary to carry out the…
- § 4097.18 Upon completion of the act of conversion and issuance of the certificate of authority under Section 4097.11, the Secretary of State shall accept for filing a…
- § 4097.19 (a) The amended articles of incorporation of a converted company that have been adopted pursuant to a plan of conversion and filed with the Secretary of State…
- § 4097.20 If the name of a mutual insurer converting to a stock insurer pursuant to this article includes the word “mutual,” the new stock insurer may continue to use…