reglab/statecodes huggingface dataset:
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 2 - Incorporated Insurers › ARTICLE 4 - Property Authorized for Excess Funds Investments › Section 1199.

1199. No domestic incorporated fire, life or marine insurer shall make excess funds investments in purchases of, or loans upon, more than 30 percent of the total in par value or number of outstanding shares of the capital stock of any one corporation, except:
(a) In the purchase of the stock of another admitted domestic insurer; or
(b) With the prior authorization of the commissioner, in the purchase of stock of any other insurance corporation organized under the laws of any other state, or of the Dominion of Canada or of any province of the Dominion of Canada, which is supervised by the state or dominions or provincial insurance commissioner or similar official, and the investments of which comply in substance with the investment requirements and limitations imposed by this code upon like domestic insurers; provided, that no such domestic insurer shall have in the aggregate more than 50 percent of its capital and surplus invested in the stocks of insurance corporations organized under the laws of this state or other states or of the Dominion of Canada or of any province of the Dominion of Canada.
(c) In the purchase of stock of any corporation organized under the laws of this state for the exclusive purpose of engaging in the business of financing insurance premiums and any and all matters incidental thereto and engaging exclusively in such business and such matters.
(d) Such insurer may purchase or otherwise acquire all or any percent of the issued and outstanding stock of any corporation which is any of the following:
(1) A corporation providing investment advisory, management, or sales services to an investment company or separate account.
(2) A real property holding, developing, managing, or leasing corporation.
(3) A data processing or computer service corporation.
(4) An investment company or companies as defined by the Investment Company Act of 1940, (Title 15, U.S.C., Sec. 80a-1, et seq.).
(5) A corporation acting as administrative agent for a governmental instrumentality performing insurance-related functions, or for private health and welfare plans.
(Amended by Stats. 1968, Ch. 685.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 2 - Incorporated Insurers › ARTICLE 4 - Property Authorized for Excess Funds Investments › Section 1200.

1200. An excess funds investment shall not be made unless authorized or approved by the directors of the investor or by a committee thereof charged with the duty of supervising or making such investment. Such authorization or approval shall be entered upon the records or minutes of the investor and, if made upon authority of such a committee a report shall be submitted to the directors at their next meeting.
(Amended by Stats. 1943, Ch. 872.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 2 - Incorporated Insurers › ARTICLE 4 - Property Authorized for Excess Funds Investments › Section 1201.

1201. The entry of approval shall show:
(a) The fact of making such investment.
(b) The amount thereof.
(c) The name of each director voting to approve the investment.
(d) The amount, character and value of the security purchased or taken as collateral.
(e) If the investment is a loan, the name of the borrower, the rate of interest thereon and the due date thereof.
(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 2 - Incorporated Insurers › ARTICLE 4 - Property Authorized for Excess Funds Investments › Section 1202.

1202. The commissioner may, in his discretion and after hearing, by written order require the disposal of any investments made in violation of the provisions of this article, pending which disposal pursuant to such order no value shall be allowed for such investment in any statement, required by any provision of this code, purporting to show the financial condition of the owner thereof, or in measuring the financial condition of the owner thereof for the purpose of determining whether such owner is solvent or insolvent. The commissioner may also, for good cause, require the disposal of any excess funds investments.
(Amended by Stats. 1943, Ch. 872.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 2 - Incorporated Insurers › ARTICLE 4.5 - Leeway Law › Section 1210.

1210. (a) A domestic incorporated insurer, after investing an amount equal to its required minimum paid-in capital in securities specified in Article 3 (commencing with Section 1170), may make investments as it may see fit in the purchase of, or loans upon, properties and securities other than or in addition to or in excess of those set forth in Article 2 (commencing with Section 1152), Article 3 (commencing with Section 1170), and Article 4 (commencing with Section 1190). Investments under this section shall not exceed, in the aggregate, the lesser of either of the following:
(1) Five percent of the insurer’s admitted assets.
(2) Fifty percent of the excess of admitted assets over the sum of capital paid up, liabilities, and the surplus required by Section 700.02. The percentage or dollar value of admitted assets and capital paid up and liabilities shall be determined by the insurer’s last preceding annual statement of conditions and affairs made as of the preceding December 31 and that has been filed with the commissioner as required by law. The investments shall be subject to the provisions of Sections 1153.5, 1154, 1200, 1201, and 1202 as if they were excess funds investments. This section applies to an insurer other than a life insurer only if the insurer has aggregate capital and surplus of at least ten million dollars ($10,000,000).
(b) An investment originally made by an insurer pursuant to this section that subsequently meets the requirements of an investment contained in Article 2 (commencing with Section 1152), Article 3 (commencing with Section 1170), or Article 4 (commencing with Section 1190) may, at the election of the insurer, be considered to be held pursuant to any provision contained in those articles.
(c) Pursuant to the authority conferred by subdivision (a), notwithstanding Section 1100, an insurer may make discretionary investments in shares of an open-end diversified management investment company, as defined in the federal Investment Company Act of 1940, as amended. This subdivision does not prohibit any other discretionary investment, now or in the future, that might otherwise be made by an insurer, whether expressly identified in this section or not.
(d) This section shall become operative on January 1, 2027.
(Repealed (in Sec. 3) and added by Stats. 2021, Ch. 627, Sec. 4. (AB 1511) Effective January 1, 2022. Operative January 1, 2027, by its own provisions.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 2 - Incorporated Insurers › ARTICLE 4.7 - Insurance Holding Company System Regulatory Act › Section 1215.3.

1215.3. The following shall be violations of this article:
(a) The failure to file the statement required under subdivision (a) of Section 1215.2.
(b) Effectuation or any attempt to effectuate an acquisition or control of, or merger with, a domestic insurer either within the 60-day period referred to in subdivision (d) of Section 1215.2, unless the commissioner has given his approval thereto, or after disapproval of such acquisition of control or merger.
(Added by Stats. 1969, Ch. 1275.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 2 - Incorporated Insurers › ARTICLE 4.7 - Insurance Holding Company System Regulatory Act › Section 1215.6.

1215.6. (a) Subject to the limitation contained in this section, and in addition to the powers which the commissioner has under Article 4 (commencing with Section 730) of Chapter 1 of this part relating to the examination of insurers, the commissioner shall also have the power to examine any insurer registered under Section 1215.4 and its affiliates to ascertain the enterprise risk to which the insurer is subjected by the ultimate controlling party, or by any entity or combination of entities within the insurance holding company system, or by the insurance holding company system on a consolidated basis. The commissioner may also order any insurer registered under Section 1215.4 to produce the records, books, or other information or papers in the possession of the insurer or its affiliates, including a report on the enterprise risk to the insurer by the ultimate controlling party, or by any entity or combination of entities within the insurance holding company system, or by the insurance holding company system on a consolidated basis, as shall be necessary to ascertain the financial condition or legality of conduct of that insurer.
(b) The commissioner shall exercise his or her power under subdivision (a) only if the examination of the insurer under Article 4 (commencing with Section 730) of Chapter 1 of this part is inadequate or the interests of the policyholders of that insurer are being adversely affected.
(c) The commissioner may retain at the registered insurer’s expense the attorneys, actuaries, accountants, and other experts not otherwise a part of the commissioner’s staff as shall be reasonably necessary to assist in the conduct of the examination under subdivision (a) of this section. Any persons so retained shall be under the direction and control of the commissioner and shall act in a purely advisory capacity.
(d) Each registered insurer producing for examination records, books, and papers pursuant to subdivision (a) shall be liable for, and shall pay the expense of, that examination in accordance with Section 736.
(Amended by Stats. 2015, Ch. 213, Sec. 6. (AB 553) Effective August 17, 2015.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 2 - Incorporated Insurers › ARTICLE 4.7 - Insurance Holding Company System Regulatory Act › Section 1215.7.

1215.7. (a) With respect to any insurer registered under Section 1215.4, and in accordance with subdivision (c), the commissioner shall also have the power to participate in a supervisory college for any domestic insurer that is part of an insurance holding company system with international operations in order to determine compliance by the insurer with this article. The powers of the commissioner with respect to supervisory colleges include, but are not limited to, the following:
(1) Initiating the establishment of a supervisory college.
(2) Clarifying the membership and participation of other supervisors in the supervisory college.
(3) Clarifying the functions of the supervisory college and the role of other regulators, including the establishment of a groupwide supervisor.
(4) Coordinating the ongoing activities of the supervisory college, including planning meetings, supervisory activities, and processes for information sharing.
(5) Establishing a crisis management plan.
(b) In order to assess the business strategy, financial position, legal and regulatory position, risk exposure, risk management, and governance processes, and as part of the examination of individual insurers in accordance with Section 1215.6, the commissioner may participate in a supervisory college with other regulators charged with supervision of the insurer or its affiliates, including other state, federal, and international regulatory agencies. A supervisory college may be convened as either a temporary or permanent forum for communication and cooperation between the regulators charged with the supervision of the insurer or its affiliates. The commissioner may enter into agreements in accordance with subdivision (b) of Section 1215.8 providing the basis for cooperation between the commissioner and the other regulatory agencies, and the activities of the supervisory college. Nothing in this section shall delegate to the supervisory college the authority of the commissioner to regulate or supervise the insurer or its affiliates within its jurisdiction.
(c) An insurer registered under Section 1215.4 that is subject to this section shall be liable for and shall, in accordance with Section 736, pay the reasonable expenses of the commissioner’s participation in a supervisory college pursuant to this section, including reasonable travel expenses, limited to those expenses reasonably related to the regulation of the insurer’s business in this state.
(Added by Stats. 2012, Ch. 282, Sec. 7. (SB 1448) Effective January 1, 2013.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 2 - Incorporated Insurers › ARTICLE 4.7 - Insurance Holding Company System Regulatory Act › Section 1215.9.

1215.9. The commissioner may, upon notice and opportunity for all interested persons to be heard, issue such rules, regulations, and orders as shall be necessary to carry out the provisions of this article.
(Added by renumbering Section 1215.8 by Stats. 2012, Ch. 282, Sec. 9. (SB 1448) Effective January 1, 2013.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 2 - Incorporated Insurers › ARTICLE 4.7 - Insurance Holding Company System Regulatory Act › Section 1215.10.

1215.10. (a) Whenever it appears to the commissioner that any insurer or any director, officer, employee, or agent thereof has committed or is about to commit a violation of this article or of any rule, regulation, or order issued by the commissioner hereunder, the commissioner may apply to the superior court for the county in which the principal office of the insurer is located, or if such insurer has no such office in this state, then to the Superior Court for the County of Los Angeles, or for the City and County of San Francisco, for an order enjoining such insurer or such director, officer, employee, or agent thereof from violating or continuing to violate this article or any such rule, regulation, or order, and for such other equitable relief as the nature of the case and the interests of the insurer’s policyholders, creditors, and shareholders or the public may require.
(b) No security which is the subject of any agreement or arrangement regarding acquisition, or which is acquired or to be acquired in contravention of the provisions of this article or of any rule, regulation, or order issued by the commissioner hereunder, may be voted at any shareholders’ meeting, or may be counted for quorum purposes, and any action of shareholders requiring the vote of an affirmative percentage of shares may be taken as though such securities were not issued and outstanding. If an insurer or the commissioner has reason to believe that any security of the insurer has been or is about to be acquired in contravention of the provisions of this article or of any rule, regulation, or order issued by the commissioner hereunder, the insurer or the commissioner may apply to the Superior Court for the County of Los Angeles or for the City and County of San Francisco or to the superior court for the county in which the insurer has its principal place of business for equitable relief to enjoin the voting of any such security or to void any vote of such security already cast, at any meeting of shareholders.
(Added by renumbering Section 1215.9 by Stats. 2012, Ch. 282, Sec. 10. (SB 1448) Effective January 1, 2013.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 2 - Incorporated Insurers › ARTICLE 4.7 - Insurance Holding Company System Regulatory Act › Section 1215.12.

1215.12. Whenever it appears to the commissioner that any person has committed a violation of this article which so impairs the financial condition of a domestic insurer as to threaten insolvency or make the further transaction of business by it hazardous to its policyholders, creditors, shareholders, or the public, then the commissioner may proceed as provided in Article 14 (commencing with Section 1010) of Chapter 1 of this part to take possession of the property of the domestic insurer and to conduct the business thereof.
(Added by renumbering Section 1215.11 by Stats. 2012, Ch. 282, Sec. 12. (SB 1448) Effective January 1, 2013.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 2 - Incorporated Insurers › ARTICLE 4.7 - Insurance Holding Company System Regulatory Act › Section 1215.13.

1215.13. Whenever it appears to the commissioner that any person has committed a violation of this article which makes the continued operation of an insurer contrary to the interests of policyholders or the public, the commissioner may, after giving notice and an opportunity to be heard, suspend, revoke, or refuse to renew that insurer’s license or authority to do business in this state for the period that he or she finds is required for the protection of policyholders or the public.
(Added by renumbering Section 1215.12 by Stats. 2012, Ch. 282, Sec. 13. (SB 1448) Effective January 1, 2013.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 2 - Incorporated Insurers › ARTICLE 4.7 - Insurance Holding Company System Regulatory Act › Section 1215.14.

1215.14. (a) For the purposes of this article only, every foreign insurer, except an insurer described in Article 2 (commencing with Section 12350) of Chapter 1 of Part 6 of Division 2, that is authorized to do business in this state and that, during its three preceding fiscal years taken together, or during any lesser period of time if it has been licensed to transact its business in California only for such lesser period of time, has written an average of more direct premiums in the State of California than it has written in its state of domicile during the same period, and those direct premiums written constitute 33 percent or more of its total direct premiums written everywhere in the United States for that three-year or lesser period, as reported in its three most recent annual statements, shall be deemed a “commercially domiciled insurer” within the State of California.
(b) The commissioner may exempt from the provisions of this article any commercially domiciled insurer made subject to this article by subdivision (a) if he or she determines that it has a sufficiently large amount of assets and the evidences of title thereto physically located in California, or that the ratio of those assets to its California policyholder liability is sufficiently large, as to justify the conclusion that there is no reasonable danger that the operations or conduct of the business of the insurer could present a danger of loss to California policyholders. The commissioner may also exempt from the provisions of this article any commercially domiciled insurer made subject to this article by subdivision (a) under the circumstances that he or she deems appropriate.
(c) This section does not exempt any foreign insurer that is authorized to do business in this state, including a commercially domiciled insurer, from the provisions of any other sections of this article that may be applicable to the insurer.
(Added by renumbering Section 1215.13 by Stats. 2012, Ch. 282, Sec. 14. (SB 1448) Effective January 1, 2013.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 2 - Incorporated Insurers › ARTICLE 4.7 - Insurance Holding Company System Regulatory Act › Section 1215.15.

1215.15. (a) The provisions of this article shall not apply to any party or entity participating in any investment by a home protection company in its subsidiary or affiliate or any debt or security instruments thereof, an effectuation or attempt to effectuate an acquisition of control or a liquidation of, or merger with, a home protection company, or any material transaction by a home protection company with its affiliate if the investment, effectuation, attempt, or transaction occurred prior to December 31, 1978.
(b) The registration required by Section 1215.4 shall first be applicable to home protection companies who are members of an insurance holding company system on January 1, 1980.
(Added by renumbering Section 1215.13 1/2 by Stats. 2012, Ch. 282, Sec. 15. (SB 1448) Effective January 1, 2013.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 2 - Incorporated Insurers › ARTICLE 4.7 - Insurance Holding Company System Regulatory Act › Section 1215.16.

1215.16. All laws and parts of laws of this state inconsistent with this article are hereby superseded with respect to matters covered by this article.
(Added by renumbering Section 1215.14 by Stats. 2012, Ch. 282, Sec. 16. (SB 1448) Effective January 1, 2013.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 2 - Incorporated Insurers › ARTICLE 4.7 - Insurance Holding Company System Regulatory Act › Section 1215.17.

1215.17. If any provision of this article or the application thereof to any person or circumstance is held invalid, the invalidity shall not affect other provisions or applications of this article which can be given effect without the invalid provision or application, and for this purpose the provisions of this article are severable.
(Added by renumbering Section 1215.15 by Stats. 2012, Ch. 282, Sec. 17. (SB 1448) Effective January 1, 2013.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 2 - Incorporated Insurers › ARTICLE 4.7 - Insurance Holding Company System Regulatory Act › Section 1215.18.

1215.18. (a) If an order for liquidation or rehabilitation of a domestic insurer has been entered, the receiver appointed under that order shall have a right to recover on behalf of the insurer (1) from any parent corporation or holding company or person or affiliate who otherwise controlled the insurer, the amount of distributions other than distributions of shares of the same class of stock paid by the insurer on its capital stock, or (2) any payment in the form of a bonus, termination settlement, or extraordinary lump sum salary adjustment made by the insurer or its subsidiary to a director, officer, or employee, where the distribution or payment pursuant to (1) or (2) is made at any time during the one year preceding the petition for liquidation, conservation, or rehabilitation, as the case may be, subject to the limitations of subdivisions (b), (c), and (d).
(b) No distribution shall be recoverable if the parent or affiliate shows that when paid the distribution was lawful and reasonable, and that the insurer did not know and could not reasonably have known that the distribution might adversely affect the ability of the insurer to fulfill its contractual obligations.
(c) Any person who was a parent corporation or holding company or a person who otherwise controlled the insurer or affiliate at the time the distributions were paid shall be liable up to the amount of distributions or payments under subdivision (a) that the person received. Any person who otherwise controlled the insurer at the time the distributions were declared shall be liable up to the amount of distributions he or she would have received if they had been paid immediately. If two or more persons are liable with respect to the same distributions, they shall be jointly and severally liable.
(d) The maximum amount recoverable under this section shall be the amount needed in excess of all other available assets of the impaired or insolvent insurer to pay the contractual obligations of the impaired or insolvent insurer and to reimburse any guaranty funds.
(e) To the extent that any person liable under subdivision (c) is insolvent or otherwise fails to pay claims due from it pursuant to that subdivision, its parent corporation or holding company or person who otherwise controlled it at the time the distribution was paid, shall be jointly and severally liable for any resulting deficiency in the amount recovered from the parent corporation or holding company or person who otherwise controlled it.
(Added by renumbering Section 1215.16 by Stats. 2012, Ch. 282, Sec. 18. (SB 1448) Effective January 1, 2013.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 2 - Incorporated Insurers › ARTICLE 4.8 - Business Transacted with Producer Controlled Insurer › Section 1216.

1216. This article may be cited as the Business Transacted with Producer Controlled Insurer Act.
(Added by Stats. 1992, Ch. 614, Sec. 7. Effective January 1, 1993.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 2 - Incorporated Insurers › ARTICLE 4.8 - Business Transacted with Producer Controlled Insurer › Section 1216.1.

1216.1. As used in this article, the following terms have the following meanings:
(a) “Accredited state” means a state in which the insurance department or regulatory agency having jurisdiction over the business of insurance has qualified as meeting the minimum financial regulatory standards promulgated and established from time to time by the National Association of Insurance Commissioners’ (NAIC) Financial Regulation Standards and Accreditation Program.
(b) “Control” or “controlled” has the meaning ascribed in Section 1215.
(c) “Controlled insurer” means an admitted insurer which is controlled, directly or indirectly, by a producer.
(d) “Controlling producer” means a producer who, directly or indirectly, controls an insurer.
(e) “Admitted insurer” or “insurer” means any person, firm, association, or corporation admitted to transact any property or casualty insurance business in this state. The following are not insurers for the purposes of this article:
(1) All residual market pools and joint underwriting authorities or associations.
(2) All captive insurers, other than risk retention groups as defined in the federal Superfund Amendments and Reauthorization Act of 1986 (42 U.S.C. Sec. 9671), the federal Liability Risk Retention Act of 1986 (15 U.S.C. Sec. 3901 et seq.), and the California Risk Retention Act of 1991 (Chapter 1.5 (commencing with Section 125) of Part 1). For the purposes of this article, captive insurers are either insurance companies which are owned by another organization and whose exclusive purpose is to insure risks of the parent organization and affiliated companies, or in the case of groups and associations, insurance organizations which are owned by the insureds and whose exclusive purpose is to insure risks of member organizations and group or association members and their affiliates.
(f) “Producer” means a fire and casualty licensee or licensees or any other person, firm, association, or corporation, when, for any compensation, commission, or other thing of value, the person, firm, association, or corporation acts or aids in any manner in soliciting, negotiating, or procuring the making of any insurance contract on behalf of an insured other than the person, firm, association, or corporation.
(Amended by Stats. 2014, Ch. 71, Sec. 99. (SB 1304) Effective January 1, 2015.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 2 - Incorporated Insurers › ARTICLE 4.8 - Business Transacted with Producer Controlled Insurer › Section 1216.2.

1216.2. This article shall apply to insurers as defined in subdivision (e) of Section 1216.1, either domiciled in this state or domiciled in a state that is not an accredited state which has in effect a substantially similar law. All provisions of Article 4.7 (commencing with Section 1215) of Chapter 2 of Part 2 of Division 1, to the extent that this article does not confer greater authority upon the commissioner or impose more restrictive requirements upon any person, shall continue to apply to all parties within insurance holding company systems which are subject both to Article 4.7 and to this article.
(Added by Stats. 1992, Ch. 614, Sec. 7. Effective January 1, 1993.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 2 - Incorporated Insurers › ARTICLE 4.8 - Business Transacted with Producer Controlled Insurer › Section 1216.4.

1216.4. The controlling producer shall, prior to the effective date of the policy, deliver written notice to the prospective insured disclosing the relationship between the producer and the controlled insurer; except that, if the business is placed through a subproducer who is not a controlling producer, the controlling producer shall retain in its records a signed commitment from the subproducer that the subproducer is aware of the relationship between the insurer and the producer and that the subproducer has or will notify the insured of the relationship between the controlling producer and the controlled insurer.
(Added by Stats. 1992, Ch. 614, Sec. 7. Effective January 1, 1993.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 2 - Incorporated Insurers › ARTICLE 4.8 - Business Transacted with Producer Controlled Insurer › Section 1216.5.

1216.5. (a) (1) If the commissioner believes that the controlling producer or any other person has not materially complied with this article, or any regulation or order issued or promulgated pursuant to this article, and after notice and an opportunity to be heard, the commissioner may order the controlling producer to cease placing business with the controlled insurer.
(2) If the commissioner finds that because of any material noncompliance that the controlled insurer or any policyholder thereof has suffered any loss or damage, the commissioner may bring a civil action or intervene in an action brought by or on behalf of the insurer or policyholder for recovery of compensatory damages for the benefit of the insurer or policyholder or other appropriate relief.
(3) Nothing in paragraph (1) shall be construed to limit any authority granted to the commissioner by any other provision of law to issue orders or take actions prior to the holding of a hearing.
(b) If an order for liquidation or rehabilitation of the controlled insurer has been entered pursuant to Article 14 (commencing with Section 1010) of Chapter 1 of Part 2 of Division 1, and the receiver appointed under that order believes that the controlling producer or any other person has not materially complied with this article, or any regulation or order issued or promulgated pursuant to this article, and the insurer suffered any loss or damage therefrom, the receiver may maintain a civil action for recovery of damages or other appropriate sanctions for the benefit of the insurer.
(c) Nothing contained in this section shall affect the right of the commissioner to impose any other penalties authorized by any other provision of law.
(d) Nothing contained in this section is intended to or shall in any manner limit or diminish the rights of policyholders, claimants, creditors, or other third parties.
(Added by Stats. 1992, Ch. 614, Sec. 7. Effective January 1, 1993.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 2 - Incorporated Insurers › ARTICLE 4.8 - Business Transacted with Producer Controlled Insurer › Section 1216.6.

1216.6. Controlled insurers and controlling producers who are not in compliance with Section 1216.3 of this act on its effective date shall have 60 days to do so and shall comply with Section 1216.4 beginning with all policies written or renewed on or after March 1, 1993.
(Added by Stats. 1992, Ch. 614, Sec. 7. Effective January 1, 1993.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 2 - Incorporated Insurers › ARTICLE 5 - Life Insurance Policies › Section 1220.

1220. Domestic incorporated life insurers may also invest any funds in loans upon any of their own policies in an amount not exceeding the reserve against such policy at the time the loan is made, but policy loans shall not be deposited with the commissioner under Article 2, Chapter 5, Part 2, Division 2.
(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 2 - Incorporated Insurers › ARTICLE 5 - Life Insurance Policies › Section 1221.

1221. The amount thus loaned by an insurer upon its own policies shall be credited to the insurer in determining the amount of deposit required to comply with the provisions of Article 2, Chapter 5, Part 2, Division 2. Such loans shall be deducted from the net value of the registered policies.
(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 2 - Incorporated Insurers › ARTICLE 5.5 - Life Insurance Policy Loans › Section 1230.

1230. The Legislature declares that the purpose of this article is to establish guidelines for life insurers to use in life insurance policies which contain a provision for periodic adjustment of policy loan interest rates and are issued after the effective date of this article.
It is the intent of the Legislature that the life insurance industry make available to the people of the State of California who purchase new life insurance policies after the effective date of this act the benefits of higher dividends or lower premiums, or both, resulting from the increased earnings through the use of higher policy loan interest rates.
(Added by Stats. 1982, Ch. 1351, Sec. 3.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 2 - Incorporated Insurers › ARTICLE 5.5 - Life Insurance Policy Loans › Section 1231.

1231. For the purposes of this article the “published monthly average” means:
(a) Moody’s Corporate Bond Yield Average-Monthly Average Corporates as published by Moody’s Investors Service, Inc. or any successor thereto.
(b) In the event that Moody’s Corporate Bond Yield Average-Monthly Average Corporates is no longer published, a substantially similar average, established by the Legislature.
(Added by Stats. 1982, Ch. 1351, Sec. 3.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 2 - Incorporated Insurers › ARTICLE 5.5 - Life Insurance Policy Loans › Section 1232.

1232. (a) Policies issued on or after the effective date of this article shall provide for policy loan interest rates at either of the following rates:
(1) A provision permitting a maximum interest rate of not more than 8 percent per annum.
(2) A provision permitting an adjustable maximum interest rate established from time to time by the life insurer as permitted by law.
(b) The rate of interest charged on a policy loan made under paragraph (2) of subdivision (a) shall not exceed the higher of the following:
(1) The published monthly average for the calendar month ending two months before the date on which the rate is determined.
(2) The rate used to compute the cash surrender values under the policy during the applicable period plus 1 percent per annum.
(c) Any insurer offering insurance policies with an adjustable policy loan interest rate shall establish a written pricing or dividend policy in order that the holders of the policies shall receive a benefit from any earnings of the insurer resulting from the use of the adjustable rate, either by means of higher dividends or lower premiums or a combination of both.
(Added by Stats. 1982, Ch. 1351, Sec. 3.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 2 - Incorporated Insurers › ARTICLE 5.5 - Life Insurance Policy Loans › Section 1233.

1233. If the maximum rate of interest is determined pursuant to paragraph (2) of subdivision (a) of Section 1232, the policy shall contain a provision setting forth the frequency at which the rate is to be determined for that policy.
(Added by Stats. 1982, Ch. 1351, Sec. 3.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 2 - Incorporated Insurers › ARTICLE 5.5 - Life Insurance Policy Loans › Section 1234.

1234. The maximum rate for each policy shall be determined at regular intervals at least once every 12 months, but not more frequently than once in any three-month period.
At the intervals specified in the policy:
(1) The rate being charged may be increased whenever the increase as determined under subdivision (b) of Section 1232 would increase that rate by one-half of 1 percent or more per annum.
(2) The rate being charged shall be reduced whenever the reduction as determined under subdivision (b) of Section 1232 would decrease that rate by one-half of 1 percent or more per annum.
(Added by Stats. 1982, Ch. 1351, Sec. 3.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 2 - Incorporated Insurers › ARTICLE 5.5 - Life Insurance Policy Loans › Section 1235.

1235. The life insurer shall do all of the following:
(1) Notify the policyholder at the time a cash loan is made of the initial rate of interest on the loan.
(2) Notify the policyholder with respect to premium loans of the initial rate of interest on the loan as soon as it is reasonably practical to do so after making the initial loan. Notice need not be given to the policyholder when a further premium loan is added, except as provided in paragraph (3).
(3) Send to policyholders with loans reasonable advance notice of any increase in the rate.
(4) Include in the required notices the substance of the pertinent provisions of subdivision (a) of Section 1232 and Section 1233.
(Added by Stats. 1982, Ch. 1351, Sec. 3.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 2 - Incorporated Insurers › ARTICLE 5.5 - Life Insurance Policy Loans › Section 1236.

1236. The loan value of the policy shall be equivalent to the cash surrender value of the policy, the minimum requirements of which are specified in Sections 10160 through 10165 for life insurance and in Section 11043, for fraternal benefit society policies or certificates, but no policy shall terminate in a policy year as the sole result of change in the interest rate during that policy year. The life insurer shall maintain coverage during that policy year until the time at which it would otherwise have terminated if there had been no change during that policy year.
(Added by Stats. 1982, Ch. 1351, Sec. 3.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 2 - Incorporated Insurers › ARTICLE 5.5 - Life Insurance Policy Loans › Section 1237.

1237. The substance of the pertinent provisions of Section 1232 and 1233 shall be set forth in the policies to which the provisions apply.
(Added by Stats. 1982, Ch. 1351, Sec. 3.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 2 - Incorporated Insurers › ARTICLE 5.5 - Life Insurance Policy Loans › Section 1238.

1238. For the purposes of this section:
(1) The rate of interest on policy loans permitted under this section includes the interest rate charged on reinstatement of policy loans for the period during and after any lapse of a policy.
(2) “Policy loan” includes any premium loan made under a policy to pay one or more premiums that were not paid to the life insurer as they fell due.
(3) “Policyholder” includes the owner of the policy or the person designated to pay premiums as shown on the records of the life insurer.
(4) “Policy” includes certificates issued by a fraternal benefit society and annuity contracts which provide for policy loans.
(Added by Stats. 1982, Ch. 1351, Sec. 3.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 2 - Incorporated Insurers › ARTICLE 5.5 - Life Insurance Policy Loans › Section 1239.

1239. No other provision of law shall apply to policy loan interest rates unless made specifically applicable to these rates.
(Added by Stats. 1982, Ch. 1351, Sec. 3.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 2 - Incorporated Insurers › ARTICLE 5.5 - Life Insurance Policy Loans › Section 1239.5.

1239.5. The provisions of this article shall not apply to any insurance contract issued before the effective date of this article unless the policyholder agrees in writing to the applicability of these provisions.
(Added by Stats. 1982, Ch. 1351, Sec. 3.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 2 - Incorporated Insurers › ARTICLE 6 - Foreign Investments › Section 1240.

1240. The following definitions shall apply in this article:
(a) “Foreign currency” means a currency other than that of the United States.
(b) “Foreign investment” means an investment in a foreign jurisdiction, or an investment in a person, real estate, or asset domiciled in a foreign jurisdiction, that is substantially of the same kind, class, and investment grade as those eligible for investment under this code, other than under Section 1210 or 1241. An investment shall not be a foreign investment if the issuing person, qualified primary credit source, or qualified guarantor is a domestic jurisdiction or a person domiciled in a domestic jurisdiction, unless both of the following apply:
(1) The issuing person is a shell business entity.
(2) The investment is not assumed, accepted, guaranteed, or insured or otherwise backed by a domestic jurisdiction or a person, that is not a shell business entity, domiciled in a domestic jurisdiction.
(c) For purposes of subdivision (b), the following definitions apply:
(1) “Shell business entity” means a business entity having no economic substance, except as a vehicle for owning interests in assets issued, owned, or previously owned by a person domiciled in a foreign jurisdiction.
(2) “Qualified guarantor” means a guarantor against which an insurer has a direct claim for full and timely payment, evidenced by a contractual right for which an enforcement action can be brought in a domestic jurisdiction.
(3) “Qualified primary credit source” means the credit source to which an insurer looks for payment as to an investment and against which an insurer has a direct claim for full and timely payment, evidenced by a contractual right for which an enforcement action can be brought in a domestic jurisdiction.
(d) “Foreign jurisdiction” means a jurisdiction other than the United States or any of its political subdivisions.
(Repealed and added by Stats. 2008, Ch. 129, Sec. 3. Effective January 1, 2009.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 2 - Incorporated Insurers › ARTICLE 6 - Foreign Investments › Section 1241.1.

1241.1. (a) No domestic insurer shall acquire any investment respecting a foreign jurisdiction, or any investment denominated in the currency of that foreign jurisdiction, if that jurisdiction is designated as a state sponsor of terrorism by the United States Secretary of State pursuant to Section 6(j) of the Export Administration Act, Section 40 of the Arms Export Control Act, and Section 620A of the Foreign Assistance Act.
(b) If any investment made pursuant to Section 1241 later becomes prohibited by this section, that investment shall not be retained as an investment made pursuant to this code.
(Repealed and added by Stats. 2008, Ch. 129, Sec. 7. Effective January 1, 2009.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 2 - Incorporated Insurers › ARTICLE 6 - Foreign Investments › Section 1242.

1242. (a) (1) Except as otherwise specified in Section 1241, a domestic insurer shall not acquire directly or indirectly through an investment subsidiary, an investment under Section 1241 if, as a result of and after giving effect to the investment, the insurer would hold more than 3 percent of its admitted assets in investments of all kinds issued, assumed, accepted, insured, or guaranteed by a single person, or 5 percent of its admitted assets in investments in the voting securities of a depository institution or any company that controls the institution.
(2) The 3 percent limitation in paragraph (1) shall not apply to the aggregate amounts insured by a single financial guaranty insurer with the highest generic rating issued by a nationally recognized statistical rating organization.
(b) A domestic insurer shall not acquire, directly or indirectly through an investment subsidiary, an investment under Section 1241 if, as a result of and after giving effect to the investment, the insurer’s aggregate medium and lower grade investments do not comply with the limitations of Section 1196.1.
(Added by Stats. 2008, Ch. 129, Sec. 8. Effective January 1, 2009.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 2 - Incorporated Insurers › ARTICLE 7 - Valuation of Investments › Section 1250.

1250. When any domestic incorporated insurer has, pursuant to the laws of this State, invested any of its funds in purchases of, or loans upon, the stock or obligations of a corporation or of a nation, state, or political or municipal division of a state, if the commissioner has reason to believe that such stock or obligations are not amply secured or are not yielding an income, he may direct the insurer to report to him under oath the amount of the stock or obligation, the security therefor and its market value.
(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 2 - Incorporated Insurers › ARTICLE 7 - Valuation of Investments › Section 1251.

1251. A stock, bond or other evidence of debt if in default as to principal or interest, or if not amply secured, shall not be valued as an asset of the insurer above its market value.
(Enacted by Stats. 1935, Ch. 145.)