reglab/statecodes huggingface dataset:
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 3 - Reciprocal Insurers › ARTICLE 7 - Dividends › Section 1420.

1420. Savings or credits may be returned to the subscribers irrespective of the source from which such savings or credits accrue whenever such returns do not constitute an impairment of the assets or reserves required to be maintained.
(Amended by Stats. 1967, Ch. 581.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 3 - Reciprocal Insurers › ARTICLE 8 - Reports and Examination › Section 1430.

1430. The attorney shall make a report, under oath, to the commissioner covering each calendar year. Such report shall be made annually during the time limited for the filing of annual statements by insurers transacting the same class of insurance. It shall show the financial condition of the exchange.
The attorney shall at any time furnish such additional information and reports, other than names and addresses of subscribers, as the commissioner requires. The attorney shall not be required to furnish the names or addresses of any subscribers except in case of an unpaid final judgment against the exchange.
(Enacted by Stats. 1935, Ch. 145.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 3 - Reciprocal Insurers › ARTICLE 8 - Reports and Examination › Section 1431.

1431. The assets, business affairs and records of every exchange and its attorney shall be subject to examination by the commissioner at any reasonable time. The cost and expense of such examination shall be paid as prescribed in Section 736.
(Amended by Stats. 1947, Ch. 1008.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 3 - Reciprocal Insurers › ARTICLE 8 - Reports and Examination › Section 1432.

1432. The commissioner has:
(a) The right of examination of and supervision over reciprocal or interinsurance exchanges, their attorneys, agents and brokers.
(b) The right to hold and conduct hearings in the manner and under the same procedure as in the case of other insurers.
(Enacted by Stats. 1935, Ch. 145.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 3 - Reciprocal Insurers › ARTICLE 8 - Reports and Examination › Section 1433.

1433. The commissioner’s right of examination shall include the right to examine the records containing the names and addresses of the subscribers. Any information obtained from such records shall be confidential and the disclosure thereof, except under order of court, constitutes a breach of official duty.
(Enacted by Stats. 1935, Ch. 145.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 3 - Reciprocal Insurers › ARTICLE 8 - Reports and Examination › Section 1434.

1434. Where the principal office of the attorney is located in another State, the commissioner, in lieu of examination may accept a certified copy of the report of examination made by the insurance authority of another State.
(Enacted by Stats. 1935, Ch. 145.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 3 - Reciprocal Insurers › ARTICLE 9 - Suits › Section 1450.

1450. The exchange may sue or be sued in its own name as in the case of an individual. Any judgment rendered against the exchange shall be binding upon each subscriber only in such proportion as his interests may appear.
(Enacted by Stats. 1935, Ch. 145.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 3 - Reciprocal Insurers › ARTICLE 9 - Suits › Section 1451.

1451. No action shall lie against any subscriber, upon any obligation made or incurred in the name of the exchange, until a final judgment has been obtained against the exchange and remains unsatisfied for thirty days.
(Enacted by Stats. 1935, Ch. 145.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 3 - Reciprocal Insurers › ARTICLE 9 - Suits › Section 1452.

1452. Process may be served upon the commissioner as provided in Article 1 (commencing with Section 12919) of Chapter 2 of Division 3.
(Amended by Stats. 1970, Ch. 949.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 3 - Reciprocal Insurers › ARTICLE 9 - Suits › Section 1453.

1453. A judgment rendered in any case where service of process has been made on the commissioner shall be binding against the subscribers as their interests appear.
(Enacted by Stats. 1935, Ch. 145.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 3 - Reciprocal Insurers › ARTICLE 10 - Policy › Section 1470.

1470. In any form of policy prescribed by this code, the attorney may insert provisions or conditions required by the plan of reciprocal or interinsurance if the plan is not inconsistent with, or in conflict with, any law of this State.
(Enacted by Stats. 1935, Ch. 145.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 3 - Reciprocal Insurers › ARTICLE 12 - Agents and Brokers › Section 1500.

1500. The provisions of this code regarding the appointment, licensing, qualification and regulation of insurance agents, brokers and solicitors, apply neither to the attorney-in-fact of a reciprocal or interinsurance exchange, nor to the salaried representatives of such exchange or attorney who receive no commissions, but do apply in the case of any agent, broker or solicitor of any reciprocal or interinsurance exchange who receives any commission.
(Amended by Stats. 1947, Ch. 577.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 3 - Reciprocal Insurers › ARTICLE 13 - Penalties › Section 1510.

1510. Any attorney-in-fact or representative of such an attorney who exchanges, or solicits or negotiates the exchange of, any contracts of insurance of the kind and character specified in this chapter, except as provided in section 1511, without compliance by the attorney with the provisions of this chapter, is guilty of a misdemeanor.
(Enacted by Stats. 1935, Ch. 145.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 3 - Reciprocal Insurers › ARTICLE 13 - Penalties › Section 1511.

1511. For the purpose of organization, and upon issuance of permit by the commissioner, powers of attorney and applications for such policies may be solicited without compliance with the provisions of this chapter, but no attorney, agent or other person shall execute any such policies until all of the provisions of this chapter are complied with.
(Enacted by Stats. 1935, Ch. 145.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 3 - Reciprocal Insurers › ARTICLE 13 - Penalties › Section 1512.

1512. In addition to the foregoing penalties and where not otherwise provided, the penalty for failure or refusal to comply with any or all of the provisions of this chapter upon the part of the attorney, shall be the refusal, suspension or revocation of certificate of authority. Before such refusal, suspension or revocation, notice and hearing shall be given such attorney in accordance with the procedure provided in Section 704.
(Amended by Stats. 1945, Ch. 901.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 3 - Reciprocal Insurers › ARTICLE 14 - Tax Provisions › Section 1530.

1530. In lieu of all other taxes, licenses or fees whatever, state or local, each exchange and its corporate attorney in fact considered as a single unit shall together pay annually on account of the transaction of such business in this state, the same fees as are paid by mutual insurers transacting the same kind of business, and the annual tax imposed by Section 28 of Article XIII of the Constitution of the State of California and by the applicable provisions of the Revenue and Taxation Code, except that each corporate attorney in fact of a reciprocal or interinsurance exchange shall be subject to all taxes imposed upon other corporations doing business in the state, other than taxes directly attributable to property used exclusively in or on income derived from its principal business as corporate attorney in fact. In any event, such corporate attorney in fact shall file an annual return and pay the minimum tax provided for by Section 23151 of the Bank and Corporation Tax Law. For the purposes of Section 12221 of the Revenue and Taxation Code, the term gross premiums, as applied to reciprocal or interinsurance exchanges, includes all sums paid by subscribers in this state by reason of the insurance exchange, whether termed premium deposit, membership fee, or otherwise, after deducting therefrom premium deposit returns or cancellations, and all amounts returned to subscribers or credited to their accounts as savings, but does not include such sums received for reinsurance and for ocean marine insurance.
A corporate attorney in fact of each exchange shall annually compute the amount of tax that would be payable by it under the provisions of the Bank and Corporation Tax Law (Part 11 (commencing with Section 23001) of Division 2 of the Revenue and Taxation Code) except for the provisions of this section, and any management fee due from each exchange to its corporate attorney in fact shall be reduced pro tanto by a sum equivalent to the amount so computed.
(Amended by Stats. 1980, Ch. 676, Sec. 186.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 3 - Reciprocal Insurers › ARTICLE 14 - Tax Provisions › Section 1531.

1531. (a) On and after January 1, 1994, and before January 1, 1995, every exchange and its corporate attorney in fact that is considered a single unit whose annual taxes exceed fifty thousand dollars ($50,000) shall make payment by electronic funds transfer. On and after January 1, 1995, every exchange and its corporate attorney in fact that is considered a single unit whose annual taxes exceed twenty thousand dollars ($20,000) shall make payment by electronic funds transfer. The exchange and its corporate attorney in fact considered as a single unit shall choose one of the acceptable methods described in Section 45 for completing the electronic funds transfer.
(b) Payment is deemed complete on the date the electronic funds transfer is initiated, if settlement to the state’s demand account occurs on or before the banking day following the date the transfer is initiated. If settlement to the state’s demand account does not occur on or before the banking day following the date the transfer is initiated, payment is deemed to occur on the date settlement occurs.
(c) (1) Any exchange and its corporate attorney in fact considered as a single unit required to remit taxes by electronic funds transfer pursuant to this section who remits those taxes by means other than an appropriate electronic funds transfer, shall be assessed a penalty in an amount equal to 10 percent of the taxes due at the time of the payment.
(2) If the department finds that the failure of an exchange and its corporate attorney in fact, considered as a single unit, to make payment by an appropriate electronic funds transfer in accordance with subdivision (a) is due to reasonable cause or circumstances beyond the exchange’s and its corporate attorney in fact’s control, and occurred notwithstanding the exercise of ordinary care and in the absence of willful neglect, that exchange and its corporate attorney in fact shall be relieved of the penalty provided in paragraph (1).
(3) Any exchange and its corporate attorney in fact seeking to be relieved of the penalty provided in paragraph (1) shall file with the department a statement under penalty of perjury setting forth the facts upon which the claim for relief is based.
(Amended by Stats. 1995, Ch. 721, Sec. 2. Effective January 1, 1996.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 3 - Reciprocal Insurers › ARTICLE 15 - Merger › Section 1540.

1540. Any two or more domestic reciprocal insurers, upon affirmative vote of not less than two-thirds of the subscribers of each such insurer who vote on such merger pursuant to due notice and the prior approval of the commissioner of the terms of such notice, of the manner and form of such voting and of such proposed merger, may merge. The commissioner shall not approve any plan for such merger which is inequitable to subscribers, or in any case where the bylaws or other rules, regulations, power of attorney or other instrument affecting the rights of subscribers of either such reciprocal, has been amended within one year prior to the date of filing with the commissioner of the application for such approval.
(Amended by Stats. 1965, Ch. 164.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 3 - Reciprocal Insurers › ARTICLE 16 - Merger of Certain Reciprocal Insurers › Section 1550.

1550. This article shall apply only to domestic reciprocal insurers organized after 1974 to provide medical malpractice insurance.
(Added by Stats. 1995, Ch. 728, Sec. 3. Effective January 1, 1996.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 3 - Reciprocal Insurers › ARTICLE 16 - Merger of Certain Reciprocal Insurers › Section 1551.

1551. By following the procedure specified in this article, any domestic reciprocal insurer described in this article may merge, consolidate, or otherwise unite with or become a part of, or may reinsure all of its policies with, and, upon assumption of all of its liabilities, may transfer all of its assets to, any other domestic reciprocal insurer or an incorporated insurer, domestic or foreign. If an insurer not admitted in California is the surviving entity in the transaction, the plan and agreement shall provide either for that insurer to be admitted to transact insurance in California or for any nonsurviving insurer admitted in California to withdraw from the state. The plan and agreement by which the transaction is to be effected shall be approved by a resolution of a majority of the body exercising the subscribers’ rights selected pursuant to Section 1308 for each domestic reciprocal insurer that is a party to the transaction or by such higher number as may be required by the documents governing the reciprocal, before it is submitted to the subscribers for their consideration. The resolution shall specify the reasons for and the purposes of the proposed transaction and the manner in which the transaction is expected to benefit and serve the best interests of the domestic reciprocal insurer and its subscribers. The plan and agreement shall be approved on behalf of each constituent other party by those persons required to approve those transactions by the laws under which that other party is organized or is otherwise governed.
(Added by Stats. 1995, Ch. 728, Sec. 3. Effective January 1, 1996.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 3 - Reciprocal Insurers › ARTICLE 16 - Merger of Certain Reciprocal Insurers › Section 1552.

1552. The plan and agreement by which the transaction is to be effected shall be submitted to the commissioner, who shall examine it and require those provisions to be inserted in the agreement and any actions to be taken in connection with the transaction, including, but not limited to, (a) the terms and conditions of the transaction, (b) any fee, commission, right, option, benefit, or other valuable consideration paid or offered to or for the benefit of any director, officer, employee, subscriber, agent, or broker of each domestic reciprocal insurer or the insurer’s attorney-in-fact in connection with the transaction, (c) the contents of the notice of the vote on the transaction by the subscribers of each domestic reciprocal insurer that is a party thereto, (d) the manner and form of voting thereon by the subscribers of each domestic reciprocal insurer, and (e) any other change, that he or she may deem necessary in order that the transaction may be fair, just, and equitable to the subscribers of each domestic reciprocal insurer that is a party to the transaction, and the transaction is otherwise fair, just, and equitable to the parties to the transaction and their respective policyholders, owners, creditors, and the public. The commissioner shall not approve any transaction if the bylaws, rules, regulations, power of attorney, or instrument affecting the voting or distribution rights of subscribers of a domestic reciprocal insurer have been amended to change those rights within one year prior to the date of filing of the plan and agreement with the commissioner. The subscribers of a domestic reciprocal insurer who shall be eligible to participate in the transaction shall be those persons who are current subscribers of the domestic reciprocal insurer at the date the commissioner approves the plan and agreement for submission to the subscribers for approval pursuant to Section 1553, or at another date determined by the commissioner. No director, officer, agent, or employee of the domestic reciprocal insurer or the insurer’s attorney-in-fact shall receive any fee, commission, or other valuable consideration whatsoever, other than regular salary and compensation, for in any manner aiding, promoting, or assisting in the transaction, except as set forth in the plan and agreement approved by the commissioner. This provision shall not be deemed to prohibit the payment of reasonable fees and compensation to attorneys at law, accountants, and actuaries for services performed in the independent practice of their professions, even though they may also be directors of the insurer.
(Added by Stats. 1995, Ch. 728, Sec. 3. Effective January 1, 1996.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 3 - Reciprocal Insurers › ARTICLE 16 - Merger of Certain Reciprocal Insurers › Section 1553.

1553. When the plan and agreement has been approved by the commissioner, with any changes required by him or her, it shall require the approval of each domestic reciprocal insurer that is a party to the transaction by not less than two-thirds of the votes cast by its subscribers represented in person or by proxy at a meeting called to consider the plan and agreement. At least 30 days before the day fixed for the meeting, notice of the meeting and its purpose shall be given to the subscribers at their addresses appearing on the books maintained at the home office of the insurer. With respect to subscribers whose addresses do not appear on the books of the insurer, notice shall be deemed to have been given if published at least once in some newspaper of general circulation in the county in which the principal office of the insurer is located. At the meeting, the presence in person or by proxy of 10 percent of the subscribers of the insurer shall constitute a quorum. In the absence of a quorum, the subscribers present at the meeting in person or by proxy may adjourn the meeting to a later date. If the meeting is adjourned to the next business day, no further notice need be given of the date to which the meeting is adjourned. If the meeting is adjourned to a date later than the next business day, notice of the date to which the meeting is adjourned shall be given to the subscribers at least 15 days prior to the adjourned meeting date.
(Added by Stats. 1995, Ch. 728, Sec. 3. Effective January 1, 1996.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 3 - Reciprocal Insurers › ARTICLE 16 - Merger of Certain Reciprocal Insurers › Section 1554.

1554. If one of the insurers that is a party to the transaction is a domestic incorporated insurer, Section 1109 of the Corporations Code shall apply if the transaction is a merger or consolidation, and Section 1113 of the Corporations Code shall also apply if the transaction is a merger.
(Added by Stats. 1995, Ch. 728, Sec. 3. Effective January 1, 1996.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 3 - Reciprocal Insurers › ARTICLE 16 - Merger of Certain Reciprocal Insurers › Section 1555.

1555. (a) 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 insurers that is a party to the transaction is a foreign incorporated insurer, there shall also be filed with the commissioner evidence of that approval, consent, or authorization that is required by the laws of the state of incorporation of the foreign insurer. If the commissioner finds that the proceedings have been in accordance with the law and his or her requirements, the commissioner shall issue a certificate approving the plan and agreement and the transaction shall become effective (1) in the case of a merger, when the certificate, the agreement of merger, or the certificate of merger, as applicable, and any other documents required by law have been filed with the Secretary of State, unless a future effective date or time is provided in the agreement of merger or certificate of merger, in which event the merger shall be effective at that future effective date or time, (2) in the case of a consolidation, when any documents required by the commissioner have been filed with and approved by the commissioner, unless a future effective date or time is provided in the agreement of consolidation, in which event the consolidation shall be effective at that future effective date or time, or (3) in the case of another form of transaction, when determined by the commissioner.
(b) The fee of the commissioner for considering the proposed transaction and issuing a certificate approving the transaction shall be four thousand two hundred fifty dollars ($4,250), payable in advance with the filing with the commissioner of the first papers relating to the proposed transaction. Five dollars ($5) shall be charged for each signed and sealed or certified copy of the certificate issued as part of the same transaction in which the original certificate is issued.
(Added by Stats. 1995, Ch. 728, Sec. 3. Effective January 1, 1996.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 3 - Reciprocal Insurers › ARTICLE 16 - Merger of Certain Reciprocal Insurers › Section 1556.

1556. (a) If the surviving entity is a domestic incorporated insurer in a merger in which a domestic reciprocal insurer is a constituent party, after approval of the merger by the constituent reciprocal insurer and constituent incorporated insurer, the surviving incorporated insurer shall file in the office of the Secretary of State a copy of the agreement of merger and attachments required under paragraph (1) of subdivision (g) of Section 1113 of the Corporations Code.
(b) If the surviving entity is a domestic reciprocal insurer in a merger in which a domestic incorporated insurer is a constituent party, after approval of the merger by the constituent disappearing domestic incorporated insurer and constituent reciprocal insurer, the surviving reciprocal insurer shall file in the office of the Secretary of State a copy of the agreement of merger and attachments required under paragraph (2) of subdivision (g) of Section 1113 of the Corporations Code.
(Added by Stats. 1995, Ch. 728, Sec. 3. Effective January 1, 1996.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 3 - Reciprocal Insurers › ARTICLE 16 - Merger of Certain Reciprocal Insurers › Section 1557.

1557. (a) 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, consolidation, or other unification shall accrue to, and become the rights and properties of, the surviving or consolidated or continuing insurer which shall succeed to and assume all the obligations and liabilities of the merged, consolidating, or transferring insurer in the same manner as if incurred or contracted by the surviving, consolidated, or continuing insurer.
(b) All rights of creditors and all liens upon the property of each of the constituent incorporated insurers and constituent reciprocal insurers shall be preserved unimpaired, provided that those liens upon property of a disappearing incorporated insurer or disappearing reciprocal insurer shall be limited to the property affected thereby immediately prior to the time the merger is effective.
(c) Any action or proceeding pending by or against any disappearing incorporated insurer or disappearing reciprocal insurer may be prosecuted to judgment, which shall bind the surviving incorporated insurer or surviving reciprocal insurer, or the surviving incorporated insurer or surviving reciprocal insurer may be proceeded against or substituted in its place.
(Added by Stats. 1995, Ch. 728, Sec. 3. Effective January 1, 1996.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 3 - Reciprocal Insurers › ARTICLE 16 - Merger of Certain Reciprocal Insurers › Section 1559.

1559. (a) For all purposes for a merger in which the surviving entity is a domestic reciprocal insurer and a domestic incorporated insurer is not a constituent corporation as that term is defined under Section 161 of the Corporations Code, a copy of the certificate of merger duly certified by the commissioner is conclusive evidence of the merger of the constituent reciprocal insurers, either by themselves or together with any foreign incorporated insurers, into the surviving reciprocal insurer.
(b) For all purposes for a merger in which the surviving entity is a domestic reciprocal insurer and a domestic incorporated insurer is a “constituent corporation” as that term is defined under Section 161 of the Corporations Code, a copy of the certificate of merger duly certified by the Secretary of State is conclusive evidence of the merger of the constituent reciprocal insurers, either by themselves or together with constituent incorporated insurers, into the surviving reciprocal insurers.
(c) For all purposes for a merger in which the surviving entity is a domestic incorporated insurer and the disappearing entity is a domestic reciprocal insurer, a copy of the certificate of merger duly certified by the Secretary of State is conclusive evidence of the merger of the constituent insurers.
(Added by Stats. 1995, Ch. 728, Sec. 3. Effective January 1, 1996.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 3 - Reciprocal Insurers › ARTICLE 17 - Conversion of Certain Reciprocal Insurers to Incorporated Stock Insurers › Section 1560.

1560. This article shall apply only to domestic reciprocal insurers organized after 1974 to provide medical malpractice insurance.
(Added by Stats. 1998, Ch. 421, Sec. 2. Effective January 1, 1999.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 3 - Reciprocal Insurers › ARTICLE 17 - Conversion of Certain Reciprocal Insurers to Incorporated Stock Insurers › Section 1560.01.

1560.01. By following the procedure specified in this article, any domestic reciprocal insurer described in Section 1560 may be converted into an incorporated stock insurer. To that end, it may provide and carry out a plan for the conversion by complying with the requirements of this article.
(Added by Stats. 1998, Ch. 421, Sec. 2. Effective January 1, 1999.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 3 - Reciprocal Insurers › ARTICLE 17 - Conversion of Certain Reciprocal Insurers to Incorporated Stock Insurers › Section 1560.05.

1560.05. (a) The commissioner shall examine the plan submitted pursuant to Section 1560.03. As a part of the examination the commissioner shall order a public hearing of the plan after written notice of the hearing to the domestic reciprocal insurer and its subscribers and the public, all of whom shall have the right to appear at the hearing. The hearing shall occur before the policyholder vote. The commissioner may require as a condition of consent that the domestic reciprocal insurer make modifications of the proposed plan that the commissioner finds necessary for the protection of policyholders. The commissioner shall consent to the plan if he or she finds all of the following:
(1) The plan is fair, just, and equitable to the insurer and its policyholders.
(2) The plan does not violate the law.
(3) The converted insurer will, after the conversion, satisfy the requirements for the issuance of a license to write the line or lines of insurance for which it is presently licensed.
(4) The plan will not require subscribers to pay additional funds to retain their rights in surplus, but nothing herein is intended to prohibit or restrict a reciprocal insurer that is converting to a stock insurer by establishing a reciprocal holding company from offering to its subscribers subscription rights that are in addition to the rights in surplus to be held in the reciprocal holding company.
(5) Any stock issued to officers, directors, employees, or employee benefit plans for their benefit, if any, will be fair, just, and equitable and not hazardous to policyholders, stockholders, or creditors.
(6) The plan provides sufficient means for the accumulated earnings, cash, and/or other non-operating assets held by the reciprocal holding company to inure to the exclusive benefit of its members.
(b) The commissioner may appoint one or more actuarial, financial, or other consultants, including legal counsel, as the commissioner finds necessary to advise the commissioner in making the determination of whether the proposed plan of conversion meets the applicable requirements of this article. The domestic reciprocal insurer is responsible for the reasonable fees and expenses of any actuarial, financial, or other consultants, including legal counsel, appointed, and for the mailing and publication of notices to the domestic reciprocal insurer and its members.
(Added by Stats. 1998, Ch. 421, Sec. 2. Effective January 1, 1999.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 3 - Reciprocal Insurers › ARTICLE 17 - Conversion of Certain Reciprocal Insurers to Incorporated Stock Insurers › Section 1560.06.

1560.06. The meeting of subscribers prescribed by subdivision (c) of Section 1560.03 shall be called by the governing board, the chairperson of the board, or the president of the domestic reciprocal insurer. Notice of the meeting shall be given to eligible subscribers by mail at least 45 days prior to the date set for the meeting to subscribers of the domestic reciprocal insurer of record on the date the plan of conversion was adopted by the governing board. The notice shall be accompanied by an information statement describing the proposed reorganization. The information statement shall include, at a minimum, all of the following items:
(a) A full copy and summary of the plan of reorganization.
(b) A discussion addressing the reasons and purposes of the proposed restructuring, which shall include a comparison to a dereciprocalization.
(c) An analysis of the benefits and risks associated with the proposed reorganization to the reciprocal company and its policyholders.
(d) An explanation of how the restructuring will benefit policyholders, as well as a description of any potential risks to policyholder interests and a description of how the policyholders’ rights differ at the reciprocal holding company level from those in the existing company.
(e) A description of any stock issuance, including any shares or options to be issued to directors, officers, agents, employees, or employee benefit plans, for their benefit, that will be made in conjunction with the plan of conversion, if any, and the guidelines and parameters that shall apply in the event stock is to be issued, including a detailed discussion of subscription rights that are to be granted to policyholders.
(f) The converted insurer’s proposed articles of incorporation and bylaws.
(g) Any proposed articles and bylaws of the reciprocal holding company and any other entities to be created in the reorganization.
(h) Financial information.
(i) Any other information that the commissioner determines is necessary to make a complete and adequate disclosure to policyholders.
Voting shall be by ballot, in person, or by proxy. A quorum shall consist of 10 percent of the subscribers of the domestic reciprocal insurer entitled to vote at the meeting.
(Added by Stats. 1998, Ch. 421, Sec. 2. Effective January 1, 1999.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 3 - Reciprocal Insurers › ARTICLE 17 - Conversion of Certain Reciprocal Insurers to Incorporated Stock Insurers › Section 1560.07.

1560.07. 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, employees, agents, and employee benefit plans for their benefit may be entitled, in accordance with reasonable classifications of those individuals and employee benefit plans as may be included in the plan, to purchase for cash, at the same price as offered to the public in the initial public offering, voting stock not purchased by subscribers upon exercise of subscription rights. Nothing in this code shall be deemed to prohibit the establishment of stock option, incentive, and share ownership plans customary for publicly traded companies in the same and similar industries. The plan may not permit those persons to acquire any of the following:
(a) Greater than 25 percent of the voting stock issued pursuant to the plan for a domestic reciprocal insurer having assets in excess of two hundred million dollars ($200,000,000) or 35 percent for a domestic reciprocal insurer having assets of two hundred million dollars ($200,000,000) or less.
(b) Greater than 25 percent of the stockholders’ equity for a medical malpractice reciprocal insurer having assets in excess of two hundred million dollars ($200,000,000) or 35 percent for a medical malpractice reciprocal insurer having assets of less than two hundred million dollars ($200,000,000).
(c) Unexercised options that exceed 20 percent of the number of issued and outstanding shares.
(Added by Stats. 1998, Ch. 421, Sec. 2. Effective January 1, 1999.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 3 - Reciprocal Insurers › ARTICLE 17 - Conversion of Certain Reciprocal Insurers to Incorporated Stock Insurers › Section 1560.08.

1560.08. No director, officer, agent, or employee of the domestic reciprocal insurer shall receive any fee, commission, or other valuable consideration whatsoever, other than regular salary and compensation, for in any manner aiding, promoting, or assisting in the conversion except as set forth in the plan approved by the commissioner. This provision shall not be deemed to prohibit the payment of reasonable fees and compensation to attorneys at law, accountants, and actuaries for services performed in the independent practice of their professions, even though they may also be directors of the domestic reciprocal insurer.
(Added by Stats. 1998, Ch. 421, Sec. 2. Effective January 1, 1999.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 3 - Reciprocal Insurers › ARTICLE 17 - Conversion of Certain Reciprocal Insurers to Incorporated Stock Insurers › Section 1560.09.

1560.09. At any time before that plan of conversion becomes effective, the domestic reciprocal company may, by resolution of at least two-thirds of the governing board, amend the plan of conversion or withdraw the plan of conversion. Any plan amendment shall require the written consent of the commissioner. For a plan amendment, all references in this article to the plan of conversion shall be deemed to refer to the plan as amended, but no amendment shall be deemed to change the adoption date of the plan of conversion. No amendment may change the plan of conversion in a manner that the commissioner determines is materially disadvantageous to policyholders of the insurer or members of the reciprocal holding company, unless a further public hearing is held on the plan as amended, if the amendment is made after the initial public hearing, or if the plan as amended is submitted for reconsideration by the subscribers if the amendment is made after the plan has been approved by the subscribers.
(Added by Stats. 1998, Ch. 421, Sec. 2. Effective January 1, 1999.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 3 - Reciprocal Insurers › ARTICLE 17 - Conversion of Certain Reciprocal Insurers to Incorporated Stock Insurers › Section 1560.10.

1560.10. Upon consent by the commissioner to the plan of conversion of a domestic reciprocal insurer and filing of the plan of conversion in accordance with the provisions of this article, the commissioner shall issue a new certificate of authority to the converted insurer. Upon issuance of the certificate of authority to a domestic reciprocal insurer and subject to subdivision (a) of Section 110 of the Corporations Code, the Secretary of State shall accept for filing the articles of incorporation of the reciprocal holding company, the stock holding company, and the converted insurer. The plan is effective upon the filing of the articles of incorporation or the certificate of amendment of the articles of incorporation.
(Added by Stats. 1998, Ch. 421, Sec. 2. Effective January 1, 1999.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 3 - Reciprocal Insurers › ARTICLE 17 - Conversion of Certain Reciprocal Insurers to Incorporated Stock Insurers › Section 1560.12.

1560.12. (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 directly or indirectly offer to acquire or acquire in any manner the beneficial ownership of 5 percent or more of any class of voting securities of a converted insurer or of a person that controls, as defined by subdivision (c) of Section 1215, the converted insurer, without the prior consent of the commissioner. Any application for that approval shall contain information as the commissioner may require and shall be accompanied by a filing fee in an amount equal to the filing fee specified in Section 1215.2.
(b) In the event of any violation of this section, or of any action that, if consummated, would constitute a violation, all voting securities of the converted insurer or of the person acquired by any person in excess of the maximum amount permitted to be acquired by the person pursuant to this subdivision shall be deemed to be nonvoting securities of the converted insurer or of that person. The violation or action may be enforced or enjoined by an appropriate proceeding commenced by the converted insurer, a person, the commissioner, any policyholder or stockholder of the converted insurer, or the person on behalf of the converted insurer or the person in the superior court in the judicial district in which the converted insurer has its home office or in any other court having jurisdiction. The court may issue any order it finds necessary to cure the violation or to prevent the proposed action. In addition to the foregoing, whenever it appears to the commissioner that any person has committed a violation of this section, the commissioner may proceed as provided in Article 14 (commencing with Section 1010) of Chapter 1 to take possession of the property of the converted insurer and to conduct the business thereof.
(c) For the purposes of this section, “beneficial ownership,” with respect to voting securities, means the sole or shared power to vote, or direct the voting of, voting securities or the sole or shared power to dispose, or direct the disposition, of voting securities.
(d) For the purposes of this section, “voting security” includes voting stock as defined in Section 1560.02, any preorganization certificate or subscription, including subscription rights issued pursuant to a plan of conversion, or any security convertible, with or without consideration, into voting security, or carrying any warrant or right to subscribe for, or purchase any, voting security, or any such warrant or right.
(e) For the purposes of this section, “offer” includes an offer to buy or acquire, solicitation of an offer to sell, tender offer for, or request or invitation for tenders of a security or interest in a security for value.
(Amended by Stats. 2017, Ch. 417, Sec. 10. (AB 1696) Effective January 1, 2018.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 3 - Reciprocal Insurers › ARTICLE 17 - Conversion of Certain Reciprocal Insurers to Incorporated Stock Insurers › Section 1560.13.

1560.13. Unless otherwise provided in the plan of conversion, the governing body and officers of the domestic reciprocal insurer shall serve as directors and officers of the converted insurer until new directors and officers have been duly elected and qualified pursuant to the articles of incorporation and bylaws of the stock company.
(Added by Stats. 1998, Ch. 421, Sec. 2. Effective January 1, 1999.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 3 - Reciprocal Insurers › ARTICLE 17 - Conversion of Certain Reciprocal Insurers to Incorporated Stock Insurers › Section 1560.14.

1560.14. (a) Notwithstanding any other provision of law and except as otherwise provided in subdivision (b), actions concerning any plan of conversion, proposed plan of conversion, plan amendment, or proposed plan amendment under this article or any acts taken or proposed to be taken under this article shall be commenced within one year after the plan of conversion or plan amendment is filed in the office of the commissioner pursuant to subdivision (d) of Section 1560.03 or Section 1560.10, or six months from the effective date of the plan of conversion, whichever is later. If the plan of conversion is withdrawn, the actions or acts shall be commenced within six months from the date the governing body approves a resolution to withdraw the plan. If an action concerns or arises out of a plan amendment or proposed plan amendment made under Section 1560.09, the applicable time period is measured from the filing, effective date, or approval of withdrawal of the plan amendment, whichever is later.
(b) Judicial review of any act of the commissioner or any other governmental body or officer concerning or arising out of any plan of conversion, proposed plan of conversion, plan amendment, or proposed plan amendment under this article may only be had by filing a petition for a writ of mandate within 30 days of the date of the act. However, any petition seeking judicial review shall be filed no later than 30 days from the effective date of the plan of conversion or plan amendment, whichever is the subject of the petition.
(Added by Stats. 1998, Ch. 421, Sec. 2. Effective January 1, 1999.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 3 - Reciprocal Insurers › ARTICLE 17 - Conversion of Certain Reciprocal Insurers to Incorporated Stock Insurers › Section 1560.15.

1560.15. The offer or sale of securities issued pursuant to the plan of conversion developed and approved in accordance with the provisions of this article, shall be exempt from Article 8 (commencing with Section 820) of Chapter 1.
(Added by Stats. 1998, Ch. 421, Sec. 2. Effective January 1, 1999.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 3 - Reciprocal Insurers › ARTICLE 17 - Conversion of Certain Reciprocal Insurers to Incorporated Stock Insurers › Section 1560.16.

1560.16. The commissioner shall have the authority from time to time, to make, amend, and rescind any rules and regulations necessary to carry out the provisions of this article. The commissioner shall also have the authority to charge and collect from the insurer for the actual amount of expenses reasonably incurred by the state in discharge of the commissioner’s duties hereunder.
(Added by Stats. 1998, Ch. 421, Sec. 2. Effective January 1, 1999.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 3 - Reciprocal Insurers › ARTICLE 17 - Conversion of Certain Reciprocal Insurers to Incorporated Stock Insurers › Section 1560.17.

1560.17. Upon completion of the act of conversion and issuance of the certificate of authority under Section 1560.10, the Secretary of State shall accept for filing a verified copy of the articles of incorporation of the converted insurer.
(Added by Stats. 1998, Ch. 421, Sec. 2. Effective January 1, 1999.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 3 - Reciprocal Insurers › ARTICLE 17 - Conversion of Certain Reciprocal Insurers to Incorporated Stock Insurers › Section 1560.19.

1560.19. If the name of a domestic reciprocal insurer converting to a stock insurer pursuant to this article includes the word “reciprocal,” the new stock insurer may continue to use the word “reciprocal” in its name if the name includes a word or words that identify the new stock insurer as a stock insurer and the commissioner finds that the continued use of the word “reciprocal” in its name is not likely to mislead or deceive the public.
(Added by Stats. 1998, Ch. 421, Sec. 2. Effective January 1, 1999.)