reglab/statecodes huggingface dataset:
2023 California Code › Insurance Code - INS › DIVISION 2 - CLASSES OF INSURANCE › PART 4 - MISCELLANEOUS CASUALTY INSURANCES › CHAPTER 1 - Surety Insurers on Reserve Basis; Capital Requirements and Permitted Insurances › ARTICLE 5 - Financial Guaranty Insurance › Section 12109.

12109. (a) In addition to the contingency reserve, the case basis method or other method as may be prescribed by the commissioner shall be used to determine loss reserves, which shall include a reserve for claims reported and unpaid net of collateral. A deduction from loss reserves shall be allowed for the time value of money by application of a discount rate equal to the average rate of return on the admitted assets of the financial guaranty insurance corporation as of the date of the computation of that reserve. The discount rate shall be adjusted at the end of each calendar year.
In addition a reserve component for incurred but not reported claims shall be reasonably estimated if deemed necessary by the financial guaranty insurance corporation, or following an examination or actuarial analysis, by the commissioner.
(b) Except as otherwise permitted by the commissioner, no deduction shall be made for anticipated salvage in computing case basis loss reserves, unless that salvage is held by or under the control of the financial guaranty insurance corporation and would qualify as an admitted asset under Section 1100 and Article 3 (commencing with Section 1170) of Chapter 2 of Part 2 of Division 1 and Article 4 (commencing with Section 1190) of Chapter 2 of Part 2 of Division 1, or unless that salvage constitutes or is secured by a clean, irrevocable letter of credit which is approved by the commissioner or complies with the definition of a letter of credit provided in subdivision (e) of Section 12100.
(c) If the insured principal and interest on a defaulted issue of obligations exceed 10 percent of the financial guaranty insurance corporation’s capital, surplus, and contingency reserves, its reserve so established shall be supported by a report from an independent source acceptable to the commissioner.
(Repealed and added by Stats. 1990, Ch. 1032, Sec. 6.)
2023 California Code › Insurance Code - INS › DIVISION 2 - CLASSES OF INSURANCE › PART 4 - MISCELLANEOUS CASUALTY INSURANCES › CHAPTER 1 - Surety Insurers on Reserve Basis; Capital Requirements and Permitted Insurances › ARTICLE 5 - Financial Guaranty Insurance › Section 12110.

12110. An unearned premium reserve shall be established and maintained net of reinsurance and collateral with respect to all financial guaranty premiums. Where financial guaranty insurance premiums are paid on an installment basis, an unearned premium reserve shall be established and maintained, net of reinsurance, computed on a daily or monthly pro rata basis. All other financial guaranty insurance premiums written shall be earned in proportion with the expiration of exposure, or by such other method as may be prescribed or approved by the commissioner.
(Amended by Stats. 2005, Ch. 412, Sec. 4. Effective January 1, 2006.)
2023 California Code › Insurance Code - INS › DIVISION 2 - CLASSES OF INSURANCE › PART 4 - MISCELLANEOUS CASUALTY INSURANCES › CHAPTER 1 - Surety Insurers on Reserve Basis; Capital Requirements and Permitted Insurances › ARTICLE 5 - Financial Guaranty Insurance › Section 12111.

12111. An admitted financial guaranty insurance corporation shall adopt procedures reasonably calculated to ensure, to the extent it is commercially feasible for the financial guaranty insurance corporation, that any prospectus which discloses that a policy of financial guaranty insurance has been issued also discloses that in the event the financial guaranty insurance corporation were to become insolvent, any claims arising under the policies of financial guarantee insurance are excluded from coverage by the California Insurance Guaranty Association, established pursuant to Article 15.2 (commencing with Section 1063) of Chapter 1 of Part 2 of Division 1.
(Amended by Stats. 2005, Ch. 412, Sec. 5. Effective January 1, 2006.)
2023 California Code › Insurance Code - INS › DIVISION 2 - CLASSES OF INSURANCE › PART 4 - MISCELLANEOUS CASUALTY INSURANCES › CHAPTER 1 - Surety Insurers on Reserve Basis; Capital Requirements and Permitted Insurances › ARTICLE 5 - Financial Guaranty Insurance › Section 12113.

12113. An admitted financial guaranty insurance corporation shall keep copies of all relevant materials prepared by the insurer or used in the initial underwriting or ongoing monitoring of insured risk; all relevant documents pertaining to changes in the credit risk or performance of the insured on the obligation, and all materials pertaining to the examination of the condition of collateral, assets, or other security; and any other materials requested by the commissioner. All those materials shall be maintained for the entire period during which the insurance is in force and shall be available for examination upon request of the commissioner by the commissioner or by any rating agency approved by the commissioner.
(Added by Stats. 1990, Ch. 1032, Sec. 6.)
2023 California Code › Insurance Code - INS › DIVISION 2 - CLASSES OF INSURANCE › PART 4 - MISCELLANEOUS CASUALTY INSURANCES › CHAPTER 1 - Surety Insurers on Reserve Basis; Capital Requirements and Permitted Insurances › ARTICLE 5 - Financial Guaranty Insurance › Section 12114.

12114. (a) An insurer may insure obligations enumerated in subparagraphs (A), (B), and (C) of paragraph (1) of subdivision (b) of Section 12112 that are not investment grade so long as at least 95 percent of the insurer’s total net liability on the kinds of obligations enumerated in those subparagraphs is investment grade.
(b) The financial guaranty insurance corporation shall at all times maintain capital, surplus, and contingency reserve in the aggregate no less than the sum of the following:
(1) 0.3333 percent of the total net liability under guaranties of municipal bonds and utility first mortgage obligations.
(2) 0.6666 percent of the total net liability under guaranties of investment grade asset-backed securities.
(3) 1.0 percent of the total net liability under guaranties, secured by collateral or having a term of seven years or less of:
(A) Investment grade industrial development bonds, and
(B) Other investment grade obligations.
(4) 1.5 percent of the total net liability under guaranties of other investment grade obligations.
(5) 2.0 percent of the total net liability under guaranties of:
(A) Noninvestment grade consumer debt obligations, and
(B) Noninvestment grade asset-backed securities.
(6) 3.0 percent of the total net liability under guaranties of noninvestment grade obligations secured by first mortgages on commercial real estate and having loan-to-value ratios of 80 percent or less.
(7) 5.0 percent of the total net liability under guaranties of other noninvestment grade obligations.
(8) If the amount of collateral required by paragraph (3) of subdivision (b) is no longer maintained, that proportion of the obligation insured which is not so collateralized shall be subject to the aggregate limits specified in paragraph (4) of subdivision (b).
(9) Additional surplus determined by the commissioner to be adequate to support the writing of surety insurance and credit insurance if the financial guaranty insurance corporation has been authorized to transact surety insurance and credit insurance as authorized by Section 12102.
(c) Whenever the reserves for outstanding credit insurance losses or loss expenses or any insurer licensed in this state to transact financial guaranty insurance are determined by the commissioner to be inadequate, he or she shall require the insurer to maintain additional reserves.
(Amended by Stats. 2005, Ch. 412, Sec. 7. Effective January 1, 2006.)
2023 California Code › Insurance Code - INS › DIVISION 2 - CLASSES OF INSURANCE › PART 4 - MISCELLANEOUS CASUALTY INSURANCES › CHAPTER 1 - Surety Insurers on Reserve Basis; Capital Requirements and Permitted Insurances › ARTICLE 5 - Financial Guaranty Insurance › Section 12115.5.

12115.5. (a) If an admitted financial guaranty insurance corporation fails to maintain a rating in any of the top three generic rating classifications by any securities rating agency acceptable to the commissioner, it shall immediately send written notification of this failure to both the commissioner and the insurance regulatory authority in its state of domicile.
(b) (1) If an admitted financial guaranty insurance corporation fails to maintain a rating at least equal to the highest notch in the fourth generic rating classification by any securities rating agency acceptable to the commissioner, the insurer shall prepare and file with the commissioner a two-year business plan, in reasonable detail, together with other information that the commissioner requires. The plan shall be filed within 45 days of the date when the insurer fails to maintain that rating.
(2) In response to that failure, the commissioner may conduct any examination or analysis of the insurer’s assets, liabilities, and operations, including its pricing, that he or she deems necessary.
(3) After reviewing the business plan and conducting any examination or analysis, the commissioner may issue a corrective order specifying the corrective measures that he or she determines to be required, and the insurer shall implement those measures. In determining corrective measures, the commissioner may take into account the factors that he or she deems relevant with respect to the insurer, including the results of the examination or analysis.
(c) If an admitted financial guaranty insurance corporation fails to maintain an investment grade rating by any securities rating agency acceptable to the commissioner, it shall not do either of the following without the commissioner’s specific prior written approval:
(1) If domiciled in this state, accept additional risks or issue new policies anywhere.
(2) If domiciled in another state, accept additional risks in this state or issue new policies insuring risks in this state.
(Added by Stats. 2005, Ch. 412, Sec. 9. Effective January 1, 2006.)
2023 California Code › Insurance Code - INS › DIVISION 2 - CLASSES OF INSURANCE › PART 4 - MISCELLANEOUS CASUALTY INSURANCES › CHAPTER 1 - Surety Insurers on Reserve Basis; Capital Requirements and Permitted Insurances › ARTICLE 5 - Financial Guaranty Insurance › Section 12116.

12116. (a) If an admitted financial guaranty insurance corporation at any time exceeds any limitation prescribed by subdivision (a) or (b) of Section 12114 or Section 12115, the corporation shall immediately notify the commissioner in writing. Upon receipt of the written notification, or independent of its receipt, the commissioner may issue an order to show cause why the financial guaranty insurance corporation should not cease transacting financial guaranty insurance business. If the commissioner issues such an order, the commissioner shall serve notice of hearing with the order to the financial guaranty insurance corporation stating the time and place therefor, and the conduct, condition or grounds upon which the commissioner has made the order. The hearing shall occur not less than 20 nor more than 30 days after notice is served. At the hearing, the burden to show cause why the financial guaranty insurance corporation should not cease transacting new financial guaranty insurance shall be borne solely by the financial guaranty insurance corporation.
(b) If the commissioner does not issue an order pursuant to subdivision (a) upon receiving written notice, the financial guaranty insurance corporation shall, within 30 days after the limitations are breached, submit a written plan to the commissioner detailing the steps that it will take or has taken to reduce its exposure to loss to no more than the amounts permitted by subdivisions (a) and (b) of Section 12114 and Section 12115. If, after review of the written plan, the commissioner determines that the corporation has not presented reasonable steps to reduce its exposure to loss to not more than the permitted amounts, the commissioner may issue an order to show cause following the same procedures as prescribed in subdivision (a).
(c) If, after notice and hearing pursuant to subdivision (a) or (b), the commissioner determines that the financial guaranty insurance corporation has exceeded any limitation prescribed by subdivision (a) or (b) of Section 12114 or Section 12115, the commissioner may order the corporation to cease transacting any new financial guaranty insurance business until its exposure to loss no longer exceeds these limitations.
(d) The provisions of this section and Section 12115.5 shall in no way limit the stop order power of the commissioner under any other section.
(Amended by Stats. 2005, Ch. 412, Sec. 10. Effective January 1, 2006.)
2023 California Code › Insurance Code - INS › DIVISION 2 - CLASSES OF INSURANCE › PART 4 - MISCELLANEOUS CASUALTY INSURANCES › CHAPTER 1 - Surety Insurers on Reserve Basis; Capital Requirements and Permitted Insurances › ARTICLE 5 - Financial Guaranty Insurance › Section 12116.5.

12116.5. (a) The commissioner may, for good cause, implement by regulation, order, or written consent, reasonable conditions or limitations under which any or all admitted financial guaranty insurance corporations may insure the type of business described in paragraph (2) of subdivision (c) of Section 12100 or subdivision (a) of Section 12119, reduce reserves in respect of collateral described in paragraph (2) or (5) of subdivision (e) of Section 12100, or engage in the transactions described in subdivision (b) of Section 12106, when, in the judgment of the commissioner, those conditions or limitations are necessary and appropriate to safeguard insurer solvency.
(b) Whenever the reserves for outstanding liabilities for obligations insured under subdivision (c) of Section 12100 are determined by the commissioner to be inadequate, he or she shall require the insurer to maintain additional reserves.
(c) The commissioner may disallow, for purposes of any financial statements or reports required or permitted to be filed under this code, the recognition of collateral authorized by paragraph (2) or (5) of subdivision (e) of Section 12100 if the commissioner finds after inquiry and review that the collateral fails to legally secure the obligations to which it relates, the collateral is inaccurately valued, the value of the collateral is insufficient in relation to the obligations secured, or the legality or value of the collateral cannot readily be ascertained based on information provided.
(d) The commissioner may require restatement or other relevant revision of any admitted financial guaranty insurer’s annual or other financial statement or report required or permitted to be filed under this code if the commissioner finds after inquiry and review that any transaction entered into under subdivision (b) of Section 12106 has the effect of distorting, misrepresenting, or otherwise rendering inaccurate, misleading, or incomplete the financial condition of the insurer in any material respect.
(e) No credit default swap authorized or permitted to be insured, acquired, or otherwise used for any purpose by any admitted financial guaranty insurance corporation under any provision of this code shall be used in any manner for more than one purpose, or under more than one statutory authorization, unless authorized by this code.
(Added by Stats. 2005, Ch. 412, Sec. 11. Effective January 1, 2006.)
2023 California Code › Insurance Code - INS › DIVISION 2 - CLASSES OF INSURANCE › PART 4 - MISCELLANEOUS CASUALTY INSURANCES › CHAPTER 1 - Surety Insurers on Reserve Basis; Capital Requirements and Permitted Insurances › ARTICLE 5 - Financial Guaranty Insurance › Section 12117.

12117. A financial guaranty insurance corporation shall not be deemed in violation of any limitation prescribed by Section 12115 with respect to any financial guaranty insurance outstanding prior to January 1, 1991, if the financial guaranty insurance corporation was in compliance with the applicable single risk limit in effect in this state at the time that the financial guaranty insurance policy was issued. If the financial guaranty insurance corporation was not so in compliance, it shall comply with the limitations prescribed by Section 12115 no later than January 1, 1994.
(Added by Stats. 1990, Ch. 1032, Sec. 6.)
2023 California Code › Insurance Code - INS › DIVISION 2 - CLASSES OF INSURANCE › PART 4 - MISCELLANEOUS CASUALTY INSURANCES › CHAPTER 1 - Surety Insurers on Reserve Basis; Capital Requirements and Permitted Insurances › ARTICLE 5 - Financial Guaranty Insurance › Section 12119.

12119. Policy forms and any amendments thereto shall be filed with the commissioner within 30 days after their use in this state by the financial guaranty insurance corporation.
(a) (1) Every policy shall provide that, in the event of a payment default or insolvency of the obligor, there shall be no acceleration of the payments required to be made under the policy with respect to guarantied obligations except at the option of the financial guaranty insurance corporation.
(2) Notwithstanding paragraph (1), the following provisions apply:
(A) A policy may insure amounts payable under a credit default swap or interest rate, currency, or other swap upon a credit event or termination event if the expected amount payable on an accelerated basis in respect of any individual obligation referenced by a credit default swap or in the aggregate under an interest rate, currency, or other swap does not exceed the single risk limits prescribed in subdivision (e) of Section 12115.
(B) A policy insuring a credit default swap referencing an obligation shall be treated as if the insurer had directly insured the referenced obligation for all other purposes of this article, including, without limitation, contingency reserve requirements, except that the currency of amounts owed under the credit default swap, rather than the currency of the obligations referenced by the credit default swap, shall apply for purposes of determining whether the obligation is a permissible guaranty under subdivision (b) of Section 12112.
(b) Every policy shall contain a statement that in the event the insurer were to become insolvent, any claims arising under a policy of financial guaranty insurance are excluded from coverage by the California Insurance Guaranty Association, established pursuant to Article 15.2 (commencing with Section 1063) of Chapter 1 of Part 2 of Division 1.
(c) The commissioner may prescribe additional minimum policy provisions determined by the commissioner to be necessary or appropriate to protect policyholders, claimants, obligees, or indemnitees.
(Amended by Stats. 2005, Ch. 412, Sec. 12. Effective January 1, 2006.)
2023 California Code › Insurance Code - INS › DIVISION 2 - CLASSES OF INSURANCE › PART 4 - MISCELLANEOUS CASUALTY INSURANCES › CHAPTER 1 - Surety Insurers on Reserve Basis; Capital Requirements and Permitted Insurances › ARTICLE 5 - Financial Guaranty Insurance › Section 12120.

12120. An admitted financial guaranty insurance corporation with respect to financial guaranty insurance rates, shall not be subject to Sections 1861.01 and 1861.05, except that financial guaranty insurance rates shall not be excessive, inadequate, or unfairly discriminatory or otherwise in violation of Chapter 9 (commencing with Section 1850) of Part 2 of Division 1.
(Added by Stats. 1990, Ch. 1032, Sec. 6.)
2023 California Code › Insurance Code - INS › DIVISION 2 - CLASSES OF INSURANCE › PART 4 - MISCELLANEOUS CASUALTY INSURANCES › CHAPTER 1 - Surety Insurers on Reserve Basis; Capital Requirements and Permitted Insurances › ARTICLE 5 - Financial Guaranty Insurance › Section 12122.

12122. No insurer authorized to transact financial guaranty insurance shall pay any commission to or make any gift of money, property, or other valuable thing to any employee, agent, or representative of any issuer of any debt instrument or other monetary obligation of any kind which may be insured pursuant to this article or to any trustee or agent of any such issuer, or to any employee, agent, or representative of any underwriter of any issuer of those debt instruments or monetary obligations as an inducement to the purchase of that insurance, nor may, at any time there is in force a policy issued by that insurer insuring those debt instruments or monetary obligations, any employee, agent, or representative of the issuer or underwriter receive from or on behalf of that insurer any such payment or gift.
(Added by Stats. 1990, Ch. 1032, Sec. 6.)
2023 California Code › Insurance Code - INS › DIVISION 2 - CLASSES OF INSURANCE › PART 4 - MISCELLANEOUS CASUALTY INSURANCES › CHAPTER 2 - Other Casualty Insurers on Reserve Basis; Capital Requirements and Permitted Insurances › Section 12124.

12124. An incorporated insurer that does not issue fire, marine, life, liability, workers’ compensation, common carrier liability, surety, title or mortgage policies but does issue other insurance policies on a reserve basis shall be governed by the paid-in capital and surplus requirements of Sections 700.01 to 700.05, inclusive.
(Added by renumbering Section 12110 (as amended by Stats. 1982, Ch. 454) by Stats. 1995, Ch. 91, Sec. 98. Effective January 1, 1996.)
2023 California Code › Insurance Code - INS › DIVISION 2 - CLASSES OF INSURANCE › PART 4 - MISCELLANEOUS CASUALTY INSURANCES › CHAPTER 3 - Group and Individual Plans for Legal Insurance › Section 12125.

12125. (a) Subject to the provisions of this chapter, any insurer admitted to transact any class of insurance in this state, other than title insurance, mortgage insurance, or mortgage guaranty insurance, may transact legal insurance if it has a minimum paid-in capital and surplus of not less than one million dollars ($1,000,000), provided that the paid-in capital shall not be less than five hundred thousand dollars ($500,000), notwithstanding the paid-in capital and surplus requirements of Sections 700.01, 700.02, 10510, and 10511, respectively.
(b) Any insurer not admitted to transact any other class of insurance in this state may be admitted to transact legal insurance if it has the paid-in capital and surplus required by subdivision (a).
(c) As used in this section, “surplus” means the excess of admitted assets over the sum of (1) liabilities for losses reported, expenses, taxes, and all other indebtedness and reinsurance of outstanding risks as provided by law, and either (2) paid-in capital, in the case of an insurer issuing or having outstanding shares of capital stock, or (3) minimum paid-in capital required by this section, in the case of any other insurer.
(Added by renumbering Section 12120 (as amended by Stats. 1976, Ch. 1079) by Stats. 1995, Ch. 91, Sec. 99. Effective January 1, 1996.)
2023 California Code › Insurance Code - INS › DIVISION 2 - CLASSES OF INSURANCE › PART 4 - MISCELLANEOUS CASUALTY INSURANCES › CHAPTER 3 - Group and Individual Plans for Legal Insurance › Section 12126.

12126. Group legal insurance shall mean that form of legal insurance covering groups of persons as defined in this chapter with or without one or more of their dependents and issued upon one of the following bases:
(a) Under a policy issued to an employer insuring employees of the employer;
(b) Under a policy issued to a labor union insuring members of the union;
(c) Under a policy issued to the trustees of a fund established by two or more employers in the same industry or by one or more labor unions or by one or more employers and one or more labor unions, which trustees shall be deemed the policyholder insuring employees of the employers or members of the union;
(d) Under a policy issued to any other organization or combination of organizations, incorporated or otherwise, (including professional associations, trade associations, or other organizations) whose members have common concerns or problems, or have joined together as a means for bargaining for a particular position, or have voluntarily formed or become members of an organization designed to perform a service for its members, or any other substantially similar organization, excluding an organization or combination of organizations that is formed or maintained solely for the purposes of obtaining insurance.
(Added by renumbering Section 12121 (as amended by Stats. 1974, Ch. 1161) by Stats. 1995, Ch. 91, Sec. 100. Effective January 1, 1996.)
2023 California Code › Insurance Code - INS › DIVISION 2 - CLASSES OF INSURANCE › PART 4 - MISCELLANEOUS CASUALTY INSURANCES › CHAPTER 3 - Group and Individual Plans for Legal Insurance › Section 12127.

12127. Group and individual legal insurance may be offered in this state subject to all the following conditions:
(a) Premium rates shall comply with any pertinent standards in this code, including the standards that rates not be excessive, inadequate, or unfairly discriminatory. Rates for group legal insurance shall not be deemed to be unfairly discriminatory because different premiums result for policyholders with like loss exposures but different expense factors, or like expense factors but different loss exposures, so long as the rates reflect the difference with reasonable accuracy. Rates shall not be considered to be unfairly discriminatory if they are averaged broadly among persons insured under a group legal insurance plan.
(b) No policy or certificate of legal insurance may be delivered or issued for delivery in this state unless and until a copy of the form thereof has been filed with the commissioner. However, this subdivision shall apply only to an insurer for a two-year period immediately following the date upon which it files its first policy or certificate of legal insurance with the commissioner.
(c) No policy of group legal insurance may be delivered or issued for delivery in this state unless it contains a provision that the insurer shall issue to the person in whose name the policy is issued, for delivery to each member of the insured group, a certificate setting forth in a summary form a statement of the essential features of the insurance coverage and to whom benefits thereunder are payable. If dependents are included in the coverage, only one certificate need be issued for each family unit. Any certificates delivered to members of an insured group pursuant to this subdivision shall be required to be “individualized” within the meaning of that term as it is defined by Section 10270.63 only if members of the group contribute to the payment of the legal insurance premiums.
(Added by renumbering Section 12122 (as amended by Stats. 1974, Ch. 1161) by Stats. 1995, Ch. 91, Sec. 102. Effective January 1, 1996.)
2023 California Code › Insurance Code - INS › DIVISION 2 - CLASSES OF INSURANCE › PART 4 - MISCELLANEOUS CASUALTY INSURANCES › CHAPTER 3 - Group and Individual Plans for Legal Insurance › Section 12128.

12128. In every group legal insurance plan, the employer, labor union, trustees, or other person to whom a group legal insurance plan policy is issued shall be the policyholder for all purposes of entering into, amending, or terminating any contract of legal insurance, administering any legal insurance plan, and exercising any voting rights to which the policyholder is entitled. If entitled to vote at meetings of the insurer, such policyholder shall be entitled to one vote.
(Added by renumbering Section 12123 by Stats. 1995, Ch. 91, Sec. 103. Effective January 1, 1996.)
2023 California Code › Insurance Code - INS › DIVISION 2 - CLASSES OF INSURANCE › PART 4 - MISCELLANEOUS CASUALTY INSURANCES › CHAPTER 3 - Group and Individual Plans for Legal Insurance › Section 12129.

12129. The provisions of this chapter shall be enforced by the commissioner, and he may, after notice and public hearing, promulgate such reasonable rules and regulations as are necessary to administer this chapter.
(Added by renumbering Section 12124 by Stats. 1995, Ch. 91, Sec. 104. Effective January 1, 1996.)
2023 California Code › Insurance Code - INS › DIVISION 2 - CLASSES OF INSURANCE › PART 5 - MOTOR CLUBS › CHAPTER 1 - Definitions and Exemptions › Section 12140.

12140. This part shall not apply to any of the following:
(a) A duly authorized attorney at law acting in the usual course of his profession.
(b) An admitted insurer.
(c) An association of motor carriers.
(d) A person who is directly or indirectly engaged, either as principal or agent, in selling or offering for sale, furnishing, or procuring any of the services described in Section 12148, 12152, or 12153, or miscellaneous service that augments or is incidental to any of those services, but who is not directly or indirectly engaged, either as principal or agent, in selling or offering for sale, furnishing, or procuring any other service described in this chapter.
(e) A person who is licensed as a vehicle service contract provider and offering any of the services described in paragraphs (1) to (4), inclusive, of subdivision (c) of Section 12800, to the extent that person is providing the services described therein.
(f) A person offering the services described in paragraph (7) of subdivision (a) of Section 12805 to the extent that person is providing the services described therein.
(g) An agreement that promises routine maintenance.
(Amended by Stats. 2016, Ch. 386, Sec. 2. (AB 2354) Effective January 1, 2017.)
2023 California Code › Insurance Code - INS › DIVISION 2 - CLASSES OF INSURANCE › PART 5 - MOTOR CLUBS › CHAPTER 1 - Definitions and Exemptions › Section 12141.

12141. Except where the context otherwise requires, the terms used in this part shall be given the meanings set forth in this chapter, but such meaning shall not, merely by reason of enactment in this chapter, govern the interpretation of any other provision of this code.
(Enacted by Stats. 1935, Ch. 145.)
2023 California Code › Insurance Code - INS › DIVISION 2 - CLASSES OF INSURANCE › PART 5 - MOTOR CLUBS › CHAPTER 1 - Definitions and Exemptions › Section 12142.

12142. (a) Except as provided in subdivision (b), a motor club is a person, directly or indirectly engaged, either as principal or agent, in selling or offering for sale, furnishing or procuring motor club service.
(b) A person who is directly or indirectly engaged, either as principal or agent, in selling or offering for sale, furnishing, or procuring any of the services described in Section 12148, 12152, or 12153, or miscellaneous service that augments or is incidental to any of those services, but who is not directly or indirectly engaged, either as principal or agent, in selling or offering for sale, furnishing, or procuring any other service described in this chapter, is not a motor club.
(Amended by Stats. 2003, Ch. 88, Sec. 2. Effective January 1, 2004.)
2023 California Code › Insurance Code - INS › DIVISION 2 - CLASSES OF INSURANCE › PART 5 - MOTOR CLUBS › CHAPTER 1 - Definitions and Exemptions › Section 12142.5.

12142.5. The commissioner shall adopt reasonable rules and regulations specifying the types of miscellaneous service permitted under subdivision (d) of Section 12140 and subdivision (b) of Section 12142. The rules and regulations shall be adopted, amended, and repealed 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.
(Added by Stats. 2003, Ch. 88, Sec. 3. Effective January 1, 2004.)
2023 California Code › Insurance Code - INS › DIVISION 2 - CLASSES OF INSURANCE › PART 5 - MOTOR CLUBS › CHAPTER 1 - Definitions and Exemptions › Section 12143.

12143. A club agent is a person other than the motor club itself, who acts or aids in any manner in the solicitation, delivery, or negotiation of any membership or service contract, or of the renewal or continuance thereof.
(Amended by Stats. 1972, Ch. 179.)
2023 California Code › Insurance Code - INS › DIVISION 2 - CLASSES OF INSURANCE › PART 5 - MOTOR CLUBS › CHAPTER 1 - Definitions and Exemptions › Section 12144.

12144. Motor club service is the rendering or procuring of, or reimbursement for, any of the services defined in this chapter to any person in connection with the ownership, operation, use, or maintenance of a motor vehicle, including a vacation trailer, house or otherwise, or a boat capable of ordinary transportation on a trailer and its trailer, by the person upon any of the following considerations:
(a) The person is or will become a member of the club rendering or furnishing the service.
(b) The person is or will become in any manner affiliated with the club.
(c) The person is or will become entitled to receive membership or other motor club service from the club by virtue of any agreement or understanding with any club.
This section shall not authorize a motor club to furnish any service on a reimbursement basis that constitutes the transaction of insurance. The commissioner may make reasonable rules and regulations specifying services that constitute the transaction of insurance for the purposes of this part and which may not be offered on a reimbursement basis. Rules and regulations shall be adopted, amended, and repealed in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code.
(Amended by Stats. 2004, Ch. 183, Sec. 248. Effective January 1, 2005.)
2023 California Code › Insurance Code - INS › DIVISION 2 - CLASSES OF INSURANCE › PART 5 - MOTOR CLUBS › CHAPTER 1 - Definitions and Exemptions › Section 12145.

12145. Towing service is the drafting or moving by a motor club of a motor vehicle from one place to another under other power than its own.
(Enacted by Stats. 1935, Ch. 145.)
2023 California Code › Insurance Code - INS › DIVISION 2 - CLASSES OF INSURANCE › PART 5 - MOTOR CLUBS › CHAPTER 1 - Definitions and Exemptions › Section 12146.

12146. Emergency road service is the adjustment, repair or replacement by a motor club of the equipment, tires or mechanical parts of a motor vehicle so as to permit it to be operated under its own power.
(Enacted by Stats. 1935, Ch. 145.)
2023 California Code › Insurance Code - INS › DIVISION 2 - CLASSES OF INSURANCE › PART 5 - MOTOR CLUBS › CHAPTER 1 - Definitions and Exemptions › Section 12148.

12148. Discount service is an arrangement by a motor club resulting in giving special discounts, rebates or reductions of price on gasoline, oil, repairs, insurance, parts, accessories or service for motor vehicles to holders of service contracts with any such club.
(Enacted by Stats. 1935, Ch. 145.)
2023 California Code › Insurance Code - INS › DIVISION 2 - CLASSES OF INSURANCE › PART 5 - MOTOR CLUBS › CHAPTER 1 - Definitions and Exemptions › Section 12149.

12149. Financial service is an arrangement by a motor club whereby loans or other advances of money are made to holders of service contracts with any such club.
(Enacted by Stats. 1935, Ch. 145.)
2023 California Code › Insurance Code - INS › DIVISION 2 - CLASSES OF INSURANCE › PART 5 - MOTOR CLUBS › CHAPTER 1 - Definitions and Exemptions › Section 12150.

12150. (a) Buying and selling service is an arrangement by a motor club whereby the holder of a service contract with a motor club is aided in any way in the purchase or sale of an automobile.
(b) (1) If a motor club offers a service that refers members to a new motor vehicle dealer for the purchase of a new motor vehicle, and the dealer pays the motor club any compensation, including, but not limited to, an advertising, promotional, or marketing fee, any advertisement of that service shall clearly and conspicuously disclose that the dealer has paid the fee and shall have the following statement: “All new cars arranged for sale are subject to availability and a price prearranged with the selling franchised new car dealer.”
(2) In a printed advertisement, the disclosures required by paragraph (1) shall be in not less than 10-point bold type and shall be textually segregated from the other portions of the advertisement.
(3) The disclosures required by paragraph (1) do not apply to general advertisements of a motor club that merely list an auto buying service as one of several services offered by the motor club and that do not provide any details of the auto buying service.
(Amended by Stats. 1994, Ch. 1253, Sec. 2. Effective January 1, 1995.)
2023 California Code › Insurance Code - INS › DIVISION 2 - CLASSES OF INSURANCE › PART 5 - MOTOR CLUBS › CHAPTER 1 - Definitions and Exemptions › Section 12151.

12151. Theft service is an act by a motor club for the purpose of locating, identifying or recovering a stolen or missing motor vehicle owned or controlled by the holder of a service contract with any such club or for the purpose of detecting or apprehending the person guilty of the theft.
(Enacted by Stats. 1935, Ch. 145.)
2023 California Code › Insurance Code - INS › DIVISION 2 - CLASSES OF INSURANCE › PART 5 - MOTOR CLUBS › CHAPTER 1 - Definitions and Exemptions › Section 12153.

12153. Travel service is the furnishing by a motor club of touring and travel aids and assistance, and may include any or all of the following:
(a) Road maps, touring guides, directories of accommodations for travelers, club periodicals, travel information, magazines, and brochures.
(b) Procuring travel tickets of all kinds and reservations for accommodations in connections therewith.
(Repealed and added by Stats. 1969, Ch. 858.)
2023 California Code › Insurance Code - INS › DIVISION 2 - CLASSES OF INSURANCE › PART 5 - MOTOR CLUBS › CHAPTER 1 - Definitions and Exemptions › Section 12154.

12154. Claim adjustment service is an act by a motor club for the purpose of adjusting claims on behalf of the holder of a service contract with any such club, when such claim results from injury or damage to person or property arising out of an accident, in connection with the ownership, maintenance, operation and use of a motor vehicle.
(Enacted by Stats. 1935, Ch. 145.)
2023 California Code › Insurance Code - INS › DIVISION 2 - CLASSES OF INSURANCE › PART 5 - MOTOR CLUBS › CHAPTER 1 - Definitions and Exemptions › Section 12155.

12155. License service is the rendering of assistance by a motor club to any person in obtaining:
(a) Registration of a motor vehicle with the State.
(b) A driver’s license.
(c) A transfer of legal or registered ownership upon the records of the Department of Motor Vehicles.
(Amended by Stats. 1963, Ch. 209.)
2023 California Code › Insurance Code - INS › DIVISION 2 - CLASSES OF INSURANCE › PART 5 - MOTOR CLUBS › CHAPTER 1 - Definitions and Exemptions › Section 12156.

12156. Insurance service is the selling or giving, with a service contract or as a result of membership in or affiliation with a motor club, of a policy of insurance covering liability or loss by the holder resulting from injury or damage to person or property arising out of an accident, such liability or loss being the consequence of the ownership, maintenance, operation, or use of a motor vehicle.
Insurance service also includes the selling or giving with a service contract or as a result of membership in or affiliation with a motor club, of a policy of insurance, or a certificate under a master policy in which the club is the master policyholder, covering the club member, or any member of his family, for loss, other than loss of time, from accidental injury from any cause or accidental death from any cause. For such purpose any certificated motor club is deemed to be an “association” within the meaning of Section 10270.5 and the club members and members of their families are deemed to be members of such association.
(Repealed and added by Stats. 1969, Ch. 858.)
2023 California Code › Insurance Code - INS › DIVISION 2 - CLASSES OF INSURANCE › PART 5 - MOTOR CLUBS › CHAPTER 1 - Definitions and Exemptions › Section 12157.

12157. Any act by a motor club for the purpose of rendering a service defined in this chapter constitutes such service, whether or not the service as defined is completed.
(Enacted by Stats. 1935, Ch. 145.)
2023 California Code › Insurance Code - INS › DIVISION 2 - CLASSES OF INSURANCE › PART 5 - MOTOR CLUBS › CHAPTER 1 - Definitions and Exemptions › Section 12158.

12158. A service contract is a written agreement whereby any person promises for a consideration to render, furnish or procure motor club service for any other person.
(Enacted by Stats. 1935, Ch. 145.)
2023 California Code › Insurance Code - INS › DIVISION 2 - CLASSES OF INSURANCE › PART 5 - MOTOR CLUBS › CHAPTER 1 - Definitions and Exemptions › Section 12159.

12159. Miscellaneous service means any other service which may be furnished and which augments or is incidental to any service performed by the club as authorized under the provisions of this chapter or any other service which is of assistance and is beneficial to its members and is feasible for the club to render.
(Added by Stats. 1969, Ch. 858.)
2023 California Code › Insurance Code - INS › DIVISION 2 - CLASSES OF INSURANCE › PART 5 - MOTOR CLUBS › CHAPTER 2 - Certificate of Authority › Section 12160.

12160. (a) A person shall not render or agree to render motor club service in this state without first obtaining from the commissioner a certificate of authority to act as a motor club.
(b) The issuance, sale, or offer for sale in this state of securities of its own issue by any motor club shall be subject to the provisions of Article 8 (commencing with Section 820) of Chapter 1 of Part 2 of Division 1 of this code the same as if motor clubs were included in Section 826 thereof, and any such club shall not be subject to the Corporate Securities Law in the Corporations Code.
(Added by Stats. 1969, Ch. 858.)
2023 California Code › Insurance Code - INS › DIVISION 2 - CLASSES OF INSURANCE › PART 5 - MOTOR CLUBS › CHAPTER 2 - Certificate of Authority › Section 12161.

12161. Application for a certificate of authority shall be made on a form prescribed by the commissioner, accompanied by a filing fee of four thousand nine hundred thirty-nine dollars ($4,939). That certificate shall not be granted until the applicant conforms to the requirements of this part and the laws of this state prerequisite to its issue. After the issuance, the holder shall continue to comply with the requirements of this part and the laws of this state.
(Amended by Stats. 2017, Ch. 534, Sec. 74. (AB 1699) Effective January 1, 2018.)
2023 California Code › Insurance Code - INS › DIVISION 2 - CLASSES OF INSURANCE › PART 5 - MOTOR CLUBS › CHAPTER 2 - Certificate of Authority › Section 12162.

12162. The commissioner shall not issue a certificate of authority to any motor club until:
(a) It files with him or her the following:
(1) A formal application for the certificate in that form and detail as the commissioner requires, executed under oath by its president or other principal officer.
(2) A certified copy of its charter or articles of incorporation and its bylaws, if any.
(3) A copy of its latest financial statement, or report of independent audit as the commissioner may require; or, in the event neither is available, its most recent operating statement and balance sheet. Any financial statement, audit, operating and balance sheet shall be verified by the person compiling or making the same and by an executive officer of the applicant.
(4) If it is a foreign corporation, a certificate from its domiciliary state regulatory authority executed not more than 30 days before the filing of its application that it is duly authorized to do a motor club business in that state.
(5) An explanation of its plan of doing business, and copies of the following: its application for membership; the proposed membership certificate or identification card; any proposed addendum thereto; any individual insurance policy and any group master policy and individual certificates thereunder to be offered; any service contract to be issued.
(6) Other information as the commissioner may find necessary in order to determine the applicant’s qualifications.
(b) It first deposits security with the commissioner in one of the following forms:
(1) Securities of the kinds prescribed by this code for capital fund investments by stock insurers and approved by the commissioner, in the amount of one hundred thousand dollars ($100,000) based on par value or market value, whichever is less. The making, maintenance and withdrawal of those deposits and the substitution of securities therein shall be governed by Article 11 (commencing with Section 939) of Chapter 1 of Part 2 of Division 1.
(2) A surety bond on a form prescribed by the Attorney General of this state, executed by an admitted surety insurer in the penal sum of one hundred thousand dollars ($100,000).
(c) It pays to the commissioner an annual license fee of four hundred twenty-four dollars ($424).
(d) Its name is approved by the commissioner under Section 881, which applies to motor clubs.
(e) It proves by affidavits of its officers, directors, managers, and individual owners of more than 10 percent on a form prescribed by the commissioner that it is not disqualified under Section 704.5.
(f) It satisfies the commissioner it is qualified as respects each of the subjects enumerated in subdivisions (b), (c), (e), (f), (h), (i), and (j) of Section 717, when those subjects are read in the sense of protection to its members instead of policyholders.
(g) It is a separate legal entity capable of being examined by the commissioner as provided in this part.
(Amended by Stats. 2017, Ch. 534, Sec. 75. (AB 1699) Effective January 1, 2018.)
2023 California Code › Insurance Code - INS › DIVISION 2 - CLASSES OF INSURANCE › PART 5 - MOTOR CLUBS › CHAPTER 2 - Certificate of Authority › Section 12162.5.

12162.5. All motor clubs applying for a certificate of authority to act as a motor club in this state shall demonstrate to the satisfaction of the commissioner that such club has a net worth of not less than two hundred fifty thousand dollars ($250,000). For the purposes of Sections 12162.5 and 12162.6, net worth is defined as the excess of total assets over total liabilities. Such net worth shall be maintained at all times as a condition for the continuance of its certificate of authority to act as a motor club in this state.
(Amended by Stats. 1992, Ch. 15, Sec. 1. Effective January 1, 1993.)
2023 California Code › Insurance Code - INS › DIVISION 2 - CLASSES OF INSURANCE › PART 5 - MOTOR CLUBS › CHAPTER 2 - Certificate of Authority › Section 12162.6.

12162.6. (a) A motor club holding a certificate of authority to act as a motor club granted prior to January 1, 1992, may continue to retain the certificate until July 1, 1996, without complying with the increased minimum net worth requirement of Section 12162.5.
(b) A motor club shall be deemed to be insolvent and subject to Section 12164 proceedings whenever its net worth is less than two hundred fifty thousand dollars ($250,000) and it fails to comply with one of these two conditions:
(1) An audit by an independent certified public accountant with an audit report prepared by the certified public accountant and filed with the commissioner no later than June 30 of the year following the year covered by the audit.
(2) A demonstration to the satisfaction of the commissioner, on a quarterly basis, of an amount of liquid assets sufficient to satisfy its current liabilities to members.
(Amended by Stats. 1992, Ch. 15, Sec. 2. Effective January 1, 1993.)
2023 California Code › Insurance Code - INS › DIVISION 2 - CLASSES OF INSURANCE › PART 5 - MOTOR CLUBS › CHAPTER 2 - Certificate of Authority › Section 12162.7.

12162.7. For purposes of this article, “liquid assets” means cash, cash equivalents, and marketable securities readily convertible into cash. Liquid assets also include bonds, stocks, certificates of deposit, negotiable short-term instruments, service members’ dues receivable not over 90 days, receivables due from affiliates not over 90 days, acquisition costs deferred not over 90 days, federal income tax recoverables, and interest and dividends due and accrued.
(Added by Stats. 1992, Ch. 15, Sec. 3. Effective January 1, 1993.)