reglab/statecodes huggingface dataset:
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 1 - General Regulations › ARTICLE 3 - Certificate of Authority › Section 715.

715. The commissioner shall have no authority to issue a certificate of authority, other than a renewal certificate of authority, to any domestic insurer, whether organized and promoted directly or by means of a holding company, where the commissioner’s examination shows that the expense of organization and promotion, exclusive of attorney fees, accountant fees, and actuary fees, exceeds 12 percent of the total amount actually paid on its capital stock.
(Amended by Stats. 1972, Ch. 196.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 1 - General Regulations › ARTICLE 3 - Certificate of Authority › Section 716.

716. No certificate of authority shall be granted to a foreign or alien applicant that has not actively transacted for three years the classes of insurance for which it seeks to be admitted.
This section shall not apply to any of the following:
(a) An applicant 51 percent or more of whose voting shares are owned by a reputable insurer admitted to this state for at least three years.
(b) An applicant which is the successor in interest, by merger, transformation, consolidation, purchase, or other transaction, of substantially all the insurance business and going concern value of a reputable insurer which was, and still is, the dominant factor in such transaction, and could itself have been admitted.
(c) An applicant 51 percent or more of whose voting shares are owned by a noninsurance corporation, or a corporation authorized as an insurer but not actively engaged in the insurance business, which corporation, directly or indirectly, owns 51 percent or more of the voting shares of one or more insurers all of which, except the applicant and those which are alien insurers, are reputable insurers admitted to this state for at least three years.
(d) An applicant which meets the conditions established by the commissioner for exemption from this section.
(Amended by Stats. 1980, Ch. 223, Sec. 1.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 1 - General Regulations › ARTICLE 3 - Certificate of Authority › Section 717.

717. Before granting a certificate of authority or amended certificate of authority to any applicant, the commissioner shall consider the qualifications of said applicant in respect to the following subjects: (a) capital and surplus; (b) lawfulness and quality of investments; (c) financial stability; (d) reinsurance arrangements; (e) competency, character, and integrity of management; (f) ownership and control of issued and outstanding shares in the case of a capital stock insurer; (g) whether claims under policies are promptly and fairly adjusted and are promptly and fully paid in accordance with law and the terms of policies; (h) fairness and honesty of methods of doing business; (i) method by which said applicant was promoted if any of its promoters remain as stockholders or in management; and (j) hazard to policyholders or creditors.
Upon consideration of all relevant qualifications the commissioner shall issue a certificate of authority to such applicant, unless the commissioner shall have made a finding, or findings, that the applicant is materially deficient in respect to one or more of the items as outlined in (a) through (j), above.
(Added by Stats. 1965, Ch. 1044.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 1 - General Regulations › ARTICLE 3 - Certificate of Authority › Section 717.1.

717.1. Where the applicant is a wholly owned domestic subsidiary of an admitted domestic insurer the commissioner shall issue a certificate of authority to such applicant within 180 days of application unless the commissioner shall have made a finding that the applicant is substantially deficient in respect to one or more of the items set forth in Section 717.
(Added by Stats. 1980, Ch. 262, Sec. 1.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 1 - General Regulations › ARTICLE 3 - Certificate of Authority › Section 717.2.

717.2. (a) On and after January 1, 2007, for purposes of Section 717, the commissioner shall consider, with respect to any application for a certificate of authority or amended certificate of authority to transact health insurance, as defined in subdivision (b) of Section 106, in this state, any available evidence regarding any one or more of the following:
(1) Any prior history of providing, or arranging to provide for, health care coverage, services, or benefits in this state and the applicant’s history of substantial compliance with applicable state and federal laws, regulations, and requirements.
(2) Any prior history in this state or any other state, of providing, or arranging to provide for, health care coverage, services, or benefits for which the applicant is authorized to receive Medicare Program reimbursement or Medicaid Program reimbursement, and the applicant’s history of substantial compliance with applicable state and federal laws, regulations, and requirements.
(3) Any prior history on the part of the applicant’s management of providing, or arranging to provide for, health services as a licensed health professional or an individual or entity contracting with a health care service plan or insurer, and the applicant’s history of substantial compliance with state requirements, and applicable federal law, regulations, and requirements.
(b) The commissioner may also require the applicant to provide information or documents for the purposes of this section. The commissioner shall consider any other relevant information concerning misconduct.
(Added by Stats. 2006, Ch. 758, Sec. 4. Effective January 1, 2007.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 1 - General Regulations › ARTICLE 3 - Certificate of Authority › Section 717.5.

717.5. (a) For purposes of Sections 700 and 717, the commissioner may determine that an insurer admitted and domiciled in this state, or an insurer applying to become admitted and domiciled in this state, including an applicant pursuant to subdivision (a) of Section 709.5, is qualified to be designated as a professional reinsurer, if the commissioner determines that the insurer is all of the following:
(1) Principally engaged in the business of reinsurance.
(2) Does not conduct significant amounts of direct insurance as percentage of its net premiums.
(3) Is not engaged, on an ongoing basis, in the business of soliciting direct insurance.
(b) The commissioner may consider any information relevant to this determination. An insurer that holds, or is applying for qualification as, a professional reinsurer, shall provide the commissioner with information or documentation regarding the determinations under this section, upon request. The commissioner may prescribe terms and conditions applicable to the certificate of authority, as appropriate under this section.
(c) A domestic, professional reinsurer shall continue to be qualified as long as it continues to meet the requirements set forth in this section.
(d) The commissioner may, after notice and an opportunity to be heard, revoke a reinsurer’s qualification, if the reinsurer no longer qualifies under this section.
(e) A domestic insurer that is qualified as a professional reinsurer may include that designation in its name, solicitations, and advertisements.
(f) An insurer seeking qualification under this section shall pay a filing fee of three thousand three hundred twenty-eight dollars ($3,328), in advance, to the commissioner.
(g) The commissioner may adopt regulations 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 or otherwise prescribe requirements consistent with this section.
(h) The commissioner may post prescribed requirements, consistent with this section, on the department’s Internet Web site.
(Amended by Stats. 2017, Ch. 534, Sec. 8. (AB 1699) Effective January 1, 2018.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 1 - General Regulations › ARTICLE 3 - Certificate of Authority › Section 718.

718. If upon due investigation the commissioner shall find that any applicant for a certificate of authority, or amended certificate of authority, will not conduct its business in conformity with all applicable provisions of the laws of this state, he shall not grant any certificate of authority, or amended certificate of authority, to such applicant.
Where the applicant is a wholly owned subsidiary of or under the management and control of an admitted insurer, or is the successor in interest by merger, consolidation, sale and purchase, or otherwise, of such an admitted insurer, and the applicant is without substantial prior operating history, the commissioner may reasonably rely on the known characteristics and reputation of the admitted insurer to the extent relevant and appropriate under the circumstances.
(Added by Stats. 1965, Ch. 1044.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 1 - General Regulations › ARTICLE 3 - Certificate of Authority › Section 720.

720. The commissioner may after notice and hearing promulgate such reasonable rules and regulations, and amendments and additions thereto, as are necessary or convenient to carry out the purposes and provisions of this code governing the issuance, suspension and revocation of certificates of authority. Any such rule or regulation shall be promulgated in accordance with the procedure provided in Chapter 4.5 (commencing with Section 11371) of Part 1 of Division 3 of Title 2 of the Government Code.
(Added by Stats. 1965, Ch. 1044.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 1 - General Regulations › ARTICLE 3 - Certificate of Authority › Section 721.

721. As used in Sections 704.5, 716, 717 and 718, the term “applicant” includes the attorney-in-fact of a reciprocal or interinsurance exchange. Wherever reference therein is made to an officer, director, or management of the applicant, such reference is deemed to include the officers, directors, and management of the attorney-in-fact of a reciprocal or interinsurance exchange, and the members of the board of governors or other governing committee of the reciprocal itself.
(Added by Stats. 1965, Ch. 1044.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 1 - General Regulations › ARTICLE 3 - Certificate of Authority › Section 725.

725. Any person otherwise qualified may be a director of two or more insurers, but no such interlocking directorate shall be used as a means of substantially lessening competition in the business of insurance or of creating a monopoly.
Whenever the commissioner has reason to believe that there is a violation of this section, he shall serve upon the insurer or insurers and the director or directors, as the case may be, a notice pursuant to Section 38 of a hearing before the commissioner to be held not less than thirty days after the service of such notice, and requiring such insurer or insurers and such director or directors, as the case may be, to show cause why an order should not be made by the commissioner directing such insurer or insurers and such director or directors, as the case may be, to cease and desist from such violation.
If, after a hearing in accordance with the procedure provided in Section 704, the commissioner finds that there has been a violation of this section he shall issue and cause to be served upon such insurer or insurers and such director or directors, as the case may be, an order reciting the facts found by him, and setting forth the respects in which there has been a violation of this section, and directing such insurer or insurers and such director or directors, as the case may be, to cease and desist from such violation.
Any such cease and desist order of the commissioner shall be subject to judicial review. Subject to said judicial review, any person violating any such cease and desist order shall be guilty of a misdemeanor and the commissioner may, after a hearing in accordance with the procedure provided in Section 704, decline to grant or renew or may suspend or revoke a certificate of authority of any insurer or insurers violating any such cease and desist order.
(Added by Stats. 1949, Ch. 180.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 1 - General Regulations › ARTICLE 3 - Certificate of Authority › Section 726.

726. The commissioner shall notify the Secretary of State of any refusal to issue a certificate of authority to transact insurance to an applicant therefor.
(Added by Stats. 1979, Ch. 737.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 1 - General Regulations › ARTICLE 4 - Examination by Commissioner › Section 729.

729. As used in this article, the following terms have the following meanings:
(a) “Company” means any person engaging in, or proposing or attempting to engage in, any transaction or kind of insurance or surety business and any person or group of persons who may otherwise be subject to the administrative, regulatory, or taxing authority of the commissioner.
(b) “Examiner” means any individual or firm authorized by the commissioner to conduct an examination under this article.
(c) “Person” means any person, association, organization, business trust, partnership, limited liability company, or corporation, or any affiliate thereof.
(Amended by Stats. 1994, Ch. 1010, Sec. 173. Effective January 1, 1995.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 1 - General Regulations › ARTICLE 4 - Examination by Commissioner › Section 731.

731. Whenever any foreign insurer applies for admission the commissioner may make, or cause to be made by the insurance authority of the State where the insurer is organized, an examination of its insurance business and affairs.
(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 1 - General Regulations › ARTICLE 4 - Examination by Commissioner › Section 732.

732. An insurer organized or existing under the laws of any country outside of the United States shall be deemed to be organized, within the meaning of this article, in any State wherein such insurer maintains the deposits to protect policyholders as required by this code.
(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 1 - General Regulations › ARTICLE 4 - Examination by Commissioner › Section 733.

733. In making such examination the commissioner:
(a) Shall have free access to all the books and papers of the company.
(b) Shall thoroughly inspect and examine all its affairs.
(c) Shall ascertain its condition and ability to fulfill its obligations.
(d) Shall ascertain if it has complied with all laws applicable to its insurance transactions.
(e) May appraise or cause to be appraised by competent appraisers appointed by him or her all property in which the insurer has or claims an interest, or which is security, in any form, for the payment of any debt or obligation to the insurer. All such appraisals of real property shall be in writing.
(f) Shall, in conducting the examination, observe those guidelines and procedures set forth in the Examiner’s Handbook adopted by the National Association of Insurance Commissioners. The commissioner may also employ other guidelines or procedures which the commissioner may deem appropriate.
(g) May retain attorneys, appraisers, independent actuaries, independent certified public accountants, or other professionals and specialists as examiners, or any of the employees of the department assigned by the commissioner to carry out the purposes of this article, the cost of which shall be borne by the company subject to examination.
(Amended by Stats. 1992, Ch. 614, Sec. 1.2. Effective January 1, 1993.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 1 - General Regulations › ARTICLE 4 - Examination by Commissioner › Section 734.

734. Every company or person from whom information is sought, and its officers, directors, employees, and agents, shall provide to the examiners appointed pursuant to this article, timely, convenient, and free access at all reasonable hours at its offices to all books, records, accounts, papers, documents, and any or all computer or other recordings relating to the property, assets, business, and affairs of the company being examined. The officers, directors, employees, and agents of the company or person shall assist the examiners and aid in the examination so far as it is in their power to do so. The commissioner shall have the power to issue subpoenas, to administer oaths, and to examine under oath any person as to any matter pertinent to the examination. If he or she finds the books to be carelessly or improperly kept or posted, he or she shall employ sworn experts to rewrite, post, and balance the books at the insurer’s expense.
(Amended by Stats. 1992, Ch. 614, Sec. 1.3. Effective January 1, 1993.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 1 - General Regulations › ARTICLE 4 - Examination by Commissioner › Section 734.1.

734.1. (a) No later than 60 days following completion of the examination, the examiner in charge shall file with the department a verified written report of the examination under oath. Upon receipt of the verified report, the department shall transmit the report to the company examined, together with a notice that the company has 30 days to make a written submission or rebuttal with respect to any matters contained in the examination report.
(b) Within 30 days of the end of the period allowed for the receipt of written submissions or rebuttals, the commissioner shall fully consider and review the report, together with any written submissions or rebuttals and any relevant portions of the examiner’s workpapers, and shall either adopt the report as filed or with modifications or corrections, or reject the report with directions to the examiners to reopen the examination for purposes of obtaining additional data, documentation, or information, and refiling pursuant to subdivision (a).
(c) (1) Nothing contained in this article shall be construed to limit the commissioner’s authority to terminate or suspend any examination in order to pursue other legal or regulatory action pursuant to the insurance laws of this state.
(2) If the commissioner terminates or suspends an examination that includes an examination of claims practices, the commissioner shall within 10 days of the termination or suspension transmit a copy of the complete examination file to the State Bureau of Audits. The State Auditor shall audit the file pursuant to Section 10527 of the Government Code to determine the propriety of the termination or suspension.
(Amended by Stats. 2000, Ch. 997, Sec. 1. Effective January 1, 2001.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 1 - General Regulations › ARTICLE 4 - Examination by Commissioner › Section 735.

735. The hereinafter designated officer of each domestic insurer shall inform the members present at the next meeting of its governing body of the receipt from the office of the commissioner of the report of every examination of such insurer, both in the form first formally prepared by the examiners and in the form as finally settled and officially filed by the commissioner or a deputy designated by him. Such officer shall also inform such members that a copy of such report is available for inspection of any member of such governing body. There shall be entered in the minutes of each such meeting the fact that such officer did so inform the members present.
The officer above referred to, in the case of a stock or mutual insurer, shall be its secretary or comparable officer if there is no secretary. This section shall specifically apply to reciprocals and interinsurance exchanges and in that case the officer above referred to shall be the principal individual, partner or officer of its attorney-in-fact, and “governing body” shall have reference to the body exercising the subscribers’ rights provided for in Section 1308.
(Added by Stats. 1980, Ch. 10, Sec. 1. Effective February 12, 1980.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 1 - General Regulations › ARTICLE 4 - Examination by Commissioner › Section 735.5.

735.5. (a) Nothing contained in this article shall be construed to limit the commissioner’s authority to use and, if appropriate, to make public, any final or preliminary examination report, any examiner or company workpapers or other documents, or any other information discovered or developed during the course of any examination in the furtherance of any legal or regulatory action which the commissioner may, in his or her discretion, deem appropriate.
(b) Nothing contained in this code shall prevent or be construed as prohibiting the commissioner from disclosing the content of an examination report, preliminary examination report or results, market analysis data, or any matter relating thereto, to the insurance department of this or any other state or country, or to law enforcement officials of this or any other state or agency of the federal government at any time, or to the National Association of Insurance Commissioners, provided the recipient of the report or matters relating thereto agrees in writing to hold it confidential and in a manner consistent with this article, unless the prior written consent of the company to which it pertains has been obtained.
(c) All working papers, recorded information, documents, and copies thereof produced by, obtained by, or disclosed to the commissioner or any other person in the course of an examination made pursuant to this article shall be given confidential treatment and are not subject to subpoena and shall not be made public by the commissioner or any other person, except to the extent provided in subdivision (a) or (b).
(Amended by Stats. 2009, Ch. 234, Sec. 3. (AB 299) Effective January 1, 2010.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 1 - General Regulations › ARTICLE 4 - Examination by Commissioner › Section 736.

736. All examinations and analyses performed pursuant to Section 730 shall be at the expense of the insurer, organization, or person examined, except that special examinations which are in addition to regular examinations may be at the expense of the state in the discretion of the commissioner. The costs and expenses of all of those examinations shall be paid from the support appropriation for the Department of Insurance current at the time of the examination but shall be charged to and collected from the insurer, organization or person examined. If any insurer, organization, or person refuses to pay those costs and expenses promptly when due, the commissioner may refuse to issue its certificate of authority, certificate of exemption, or license, as the case may be, and may revoke any existing certificate of authority, certificate of exemption, or license.
(Amended by Stats. 2009, Ch. 234, Sec. 4. (AB 299) Effective January 1, 2010.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 1 - General Regulations › ARTICLE 4 - Examination by Commissioner › Section 737.

737. (a) No cause of action shall arise nor shall any liability be imposed against the commissioner, the commissioner’s authorized representatives, or any examiner appointed by the commissioner for any statements made or conduct performed in good faith while carrying out the provisions of this article.
(b) No cause of action shall arise, nor shall any liability be imposed against any person for the act of communicating or delivering information or data to the commissioner or the commissioner’s authorized representative or examiner pursuant to an examination made under this article, if the act of communication or delivery was performed in good faith and without fraudulent intent or the intent to deceive.
(c) This section shall not abrogate or modify in any way any common law or statutory privilege or immunity previously enjoyed by any person identified in subdivision (a).
(d) A person identified in subdivision (a) shall be entitled to an award of attorney’s fees and costs if he or she is the prevailing party in a civil cause of action for libel, slander, or any other relevant tort arising out of activities engaged in while carrying out the provisions of this article and the party bringing the action was not substantially justified in doing so. For purposes of this section, a proceeding is substantially justified if it had a reasonable basis in law or fact at the time that it was initiated.
(Added by Stats. 1992, Ch. 614, Sec. 1.6. Effective January 1, 1993.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 1 - General Regulations › ARTICLE 4 - Examination by Commissioner › Section 738.

738. The commissioner shall have the same powers and authority to examine the State Compensation Insurance Fund as are conferred upon him by law relative to the examination of other insurers except where the fund is specifically exempted by reference.
(Amended by Stats. 2006, Ch. 740, Sec. 3.3. Effective January 1, 2007.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 1 - General Regulations › ARTICLE 4.1 - Risk-Based Capital for Insurers › Section 739.

739. As used in this article, these terms shall have the following meanings:
(a) “Adjusted RBC Report” means a Risk-Based Capital (RBC) report that has been adjusted by the commissioner in accordance with subdivision (b) or (c) of Section 739.2.
(b) “Corrective Order” means an order issued by the commissioner specifying corrective actions that the commissioner has determined are required.
(c) “Domestic insurer” means any life or health insurer or property and casualty insurer organized in this state.
(d) “Foreign insurer” means any life or health insurer or property and casualty insurer that is licensed to do business in this state but is not domiciled in this state.
(e) “Life or health insurer” means any admitted insurer issuing insurance subject to Part 2 (commencing with Section 10110) of Division 2, or a licensed property and casualty insurer writing only disability insurance.
(f) “NAIC” means the National Association of Insurance Commissioners.
(g) “Negative trend” means, with respect to a life or health insurer, a negative trend over a period of time, as determined in accordance with the “Trend Test Calculation” included in the RBC Instructions defined in subdivision (i).
(h) “Property and casualty insurer” means any admitted insurer writing insurance as described in Section 102, 103, 105, 107, 108, 109, 110, 111, 112, 113, 114, 115, 116, 118, 119.5, 119.6, or 120, but does not include monoline mortgage guaranty insurers, financial guaranty insurers, or title insurers.
(i) “RBC Instructions” means the RBC Report, including risk-based capital instructions adopted by the NAIC, and as the RBC Instructions may be amended by the NAIC from time to time in accordance with the procedures adopted by the NAIC.
(j) “RBC Level” means an insurer’s Company Action Level RBC, Regulatory Action Level RBC, Authorized Control Level RBC, or Mandatory Control Level RBC where:
(1) “Company Action Level RBC” means, with respect to any insurer, the product of 2.0 and its Authorized Control Level RBC.
(2) “Regulatory Action Level RBC” means the product of 1.5 and its Authorized Control Level RBC.
(3) “Authorized Control Level RBC” means the number determined under the risk-based capital formula in accordance with the RBC Instructions.
(4) “Mandatory Control Level RBC” means the product of .70 and the Authorized Control Level RBC.
(k) “RBC Plan” means a comprehensive financial plan containing the elements specified in subdivision (b) of Section 739.3. If the commissioner rejects the RBC Plan, and it is revised by the insurer, with or without the commissioner’s recommendation, the plan shall be called the “Revised RBC Plan.”
(l) “RBC Report” means the report required in Section 739.2.
(m) “Total Adjusted Capital” means the sum of:
(1) An insurer’s statutory capital and surplus.
(2) Other items, if any, that the RBC Instructions may provide.
(Amended by Stats. 2013, Ch. 321, Sec. 4. (AB 1391) Effective January 1, 2014.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 1 - General Regulations › ARTICLE 4.1 - Risk-Based Capital for Insurers › Section 739.2.

739.2. (a) Every domestic insurer shall, on or prior to each March 15 (the “filing date”), prepare and submit to the commissioner a report of its RBC Levels as of the end of the calendar year just ended, in a form and containing such information as is required by the RBC Instructions. In addition, every domestic insurer shall file its RBC Report:
(1) With the NAIC in accordance with the RBC Instructions.
(2) With the insurance commissioner in any state in which the insurer is authorized to do business, if the insurance commissioner has notified the insurer of its request in writing, in which case the insurer shall file its RBC Report not later than the later of:
(A) Fifteen days from the receipt of notice to file its RBC Report with that state.
(B) The filing date.
(b) A life or health insurer’s RBC shall be determined in accordance with the formula set forth in the RBC Instructions. The formula shall take into account, and may adjust for the covariance between, the following:
(1) The risk with respect to the insurer’s assets.
(2) The risk of adverse insurance experience with respect to the insurer’s liabilities and obligations.
(3) The interest rate risk with respect to the insurer’s business.
(4) All other business risks and such other relevant risks as are set forth in the RBC Instructions.
In each case, these shall be determined by applying the factors in the manner set forth in the RBC Instructions.
(c) A property and casualty insurer’s RBC shall be determined in accordance with the formula set forth in the RBC Instructions. The formula shall take into account and may adjust for the covariance between the following:
(1) Asset risk.
(2) Credit risk.
(3) Underwriting risk.
(4) All other business risks and any other relevant risks as are set forth in the RBC Instructions.
(d) An excess of capital over the amount produced by the risk-based capital requirements contained in this article and the formulas, schedules, and instructions referenced in this article is desirable in the business of insurance. Accordingly, insurers shall seek to maintain capital above the RBC levels required by this article. Additional capital is used and useful in the insurance business and helps to secure an insurer against various risks inherent in, or affecting, the business of insurance and not accounted for or only partially measured by the risk-based capital requirements contained in this article.
(e) If a domestic insurer files an RBC Report that in the judgment of the commissioner is inaccurate, then the commissioner shall adjust the RBC Report to correct the inaccuracy and shall notify the insurer of the adjustment. The notice shall contain a statement of the reason for the adjustment. An RBC Report as so adjusted is referred to as an Adjusted RBC Report.
(Added by Stats. 1996, Ch. 708, Sec. 1. Effective January 1, 1997.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 1 - General Regulations › ARTICLE 4.1 - Risk-Based Capital for Insurers › Section 739.7.

739.7. Upon any of the events described in subdivision (a), (b), (c), or (d), the insurer shall have the right to a departmental hearing, on the record, at which the insurer may challenge any determination or action by the commissioner. The insurer shall notify the commissioner of its request for a hearing within five days after the notification by the commissioner under subdivision (a), (b), (c), or (d). Upon receipt of the insurer’s request for a hearing, the commissioner shall set a date for the hearing, which date shall be no less than 10 nor more than 30 days after the date of the insurer’s request.
(a) Notification to an insurer by the commissioner of an Adjusted RBC Report.
(b) Notification to an insurer by the commissioner that:
(1) The insurer’s RBC Plan or Revised RBC Plan is unsatisfactory.
(2) That notification constitutes a Regulatory Action Level Event with respect to the insurer.
(c) Notification to any insurer by the commissioner that the insurer has failed to adhere to its RBC Plan or Revised RBC Plan and that such failure has a substantial adverse effect on the ability of the insurer to eliminate the Company Action Level Event with respect to the insurer in accordance with its RBC Plan or Revised RBC Plan.
(d) Notification to an insurer by the commissioner of a Corrective Order with respect to the insurer.
(Added by Stats. 1996, Ch. 708, Sec. 1. Effective January 1, 1997.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 1 - General Regulations › ARTICLE 4.1 - Risk-Based Capital for Insurers › Section 739.9.

739.9. (a) The provisions of this article are supplemental to any other provisions of the laws of this state, and shall not preclude or limit any other powers or duties of the commissioner under such laws.
(b) The commissioner may adopt reasonable rules necessary for the implementation of this article.
(c) The commissioner may exempt from the application of this article any domestic property and casualty insurer that does all of the following:
(1) Writes direct business only in this state.
(2) Writes direct annual premiums of five million dollars ($5,000,000) or less.
(3) Assumes no reinsurance in excess of 5 percent of direct premiums written.
(Added by Stats. 1996, Ch. 708, Sec. 1. Effective January 1, 1997.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 1 - General Regulations › ARTICLE 4.1 - Risk-Based Capital for Insurers › Section 739.10.

739.10. (a) Any foreign insurer shall, upon the written request of the commissioner, submit to the commissioner an RBC Report as of the end of the calendar year just ended the later of:
(1) The date an RBC Report would be required to be filed by a domestic insurer under this chapter.
(2) Fifteen days after the request is received by the foreign insurer.
Any foreign insurer shall, at the written request of the commissioner, promptly submit to the commissioner a copy of any RBC Plan that is filed with the insurance commissioner of any other state.
(b) In the event of a Company Action Level Event or Regulatory Action Level Event with respect to any foreign insurer as determined under the RBC statute applicable in the state of domicile of the insurer, or, if no RBC provision is in force in that state, under the provisions of this chapter, if the insurance commissioner of the state of domicile of the foreign insurer fails to require the foreign insurer to file an RBC Plan in the manner specified under the RBC statute, or, if no RBC provision is in force in the state, under Section 739.3, the commissioner may require the foreign insurer to file an RBC Plan with the commissioner. In such event, the failure of the foreign insurer to file an RBC Plan with the commissioner shall be grounds to order the insurer to cease and desist from writing new insurance business in this state.
(c) In the event of a Mandatory Control Level Event with respect to any foreign insurer, if no domiciliary receiver has been appointed with respect to the foreign insurer under the rehabilitation and liquidation statute applicable in the state of domicile of the foreign insurer, the commissioner may make application to the superior court with respect to the liquidation of property of foreign insurers found in this state, and the occurrence of the Mandatory Control Level Event shall be considered adequate grounds for the application.
(Added by Stats. 1996, Ch. 708, Sec. 1. Effective January 1, 1997.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 1 - General Regulations › ARTICLE 4.1 - Risk-Based Capital for Insurers › Section 739.11.

739.11. If any provision of this article, or the application thereof to any person or circumstance, is held invalid, such determination shall not affect the provisions or applications of this article that can be given effect without the invalid provision or application, and to that end the provisions of this article are severable.
(Added by Stats. 1996, Ch. 708, Sec. 1. Effective January 1, 1997.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 1 - General Regulations › ARTICLE 4.1 - Risk-Based Capital for Insurers › Section 739.12.

739.12. (a) All notices by the commissioner to an insurer that may result in regulatory action hereunder shall be effective upon dispatch if transmitted by registered or certified mail, or in the case of any other transmission shall be effective upon the insurer’s receipt of such notice.
(b) Copies of all notices from the commissioner to the State Compensation Insurance Fund under this article shall be sent to the Governor.
(Amended by Stats. 2006, Ch. 740, Sec. 3.7. Effective January 1, 2007.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 1 - General Regulations › ARTICLE 4.5 - Special Provisions Regarding Health Coverage › Section 742.

742. (a) Any person or other entity that provides coverage in this state for medical, surgical, chiropractic, physical therapy, speech pathology, audiology, professional mental health, dental, hospital, or optometric services, whether this coverage is by direct payment, reimbursement, or otherwise, and that enters into an arrangement or contract with, or underwrites, a preferred provider organization or arrangement subject to Section 10133 is subject to the jurisdiction of the Department of Insurance.
(b) Any person or entity subject to regulation under Chapter 2.2 (commencing with Section 1340) of Division 2 of the Health and Safety Code shall not be subject to this section.
(Amended by Stats. 2007, Ch. 100, Sec. 1. Effective January 1, 2008.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 1 - General Regulations › ARTICLE 4.5 - Special Provisions Regarding Health Coverage › Section 742.1.

742.1. (a) Any person or other entity or arrangement in this state that is organized for the purpose of offering or providing coverage in this state, for the benefit of employees of two or more employers, for medical, surgical, chiropractic, physical therapy, speech pathology, audiology, professional mental health, dental, hospital, or optometric services, whether that coverage is by direct payment, reimbursement, or otherwise, is subject to the jurisdiction of the department.
(b) Any person or entity subject to regulation under Chapter 2.2 (commencing with Section 1340) of Division 2 of the Health and Safety Code shall not be subject to the provisions of this section.
(Added by Stats. 1984, Ch. 640, Sec. 1. Effective August 16, 1984.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 1 - General Regulations › ARTICLE 4.7 - Multiple Employer Welfare Arrangements › Section 742.20.

742.20. The Legislature finds and declares the following:
(a) An alternative to insurance programs, health care maintenance organizations, and panel provider organizations was established by Congress in 1974 through the Employee Retirement Income Security Act (ERISA). Among the various employee benefit programs established and governed by ERISA are multiple employer welfare arrangements (MEWA), which are subject as well to state regulatory and fiscal standards not inconsistent with ERISA. MEWAs permit employer members of trade associations to create trust funds for the purpose of offering and providing health care benefits to their employees. MEWAs can be created as fully insured or self-funded or partially self-funded benefit programs.
(b) The Legislature recognizes that some MEWAs provide an alternative mechanism to traditional health insurance for small employers. It is the intent of the Legislature to ensure the financial integrity of those MEWA programs that are already in existence by requiring self-funded or partially self-funded MEWAs to obtain a certificate of compliance from the Department of Insurance. In order for the Department of Insurance to grant a certificate of compliance, the MEWA must adhere to standards set forth in this act which are not inconsistent with the provisions of ERISA. Further, it is the intent of the Legislature to provide the Department of Insurance with the authority to levy monetary penalties and to revoke certificates of compliance from MEWAs that violate the provisions of this act.
(c) The Legislature has passed significant reforms in the area of small group health insurance. This article, in no manner, circumvents these reforms nor is it intended to be a precedent to do so. Therefore, the small group reform legislation applies to MEWAs to the extent it is not inconsistent with ERISA.
(d) The provisions of this article are consistent with and authorized by ERISA, which confers upon the states limited authority to regulate MEWAs.
(Added by Stats. 1994, Ch. 1082, Sec. 1. Effective January 1, 1995.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 1 - General Regulations › ARTICLE 4.7 - Multiple Employer Welfare Arrangements › Section 742.21.

742.21. “Multiple employer welfare arrangement” as used in this article has the same meaning as that contained in Section 1002(40)(A) of Title 29 of the United States Code. “Employee welfare benefit plan,” as used in this article, has the same meaning as that contained in Section 1002(1) of Title 29 of the United States Code. A multiple employer welfare arrangement shall comply with the criteria set forth for an employee welfare benefit plan in order to qualify to obtain a certificate of compliance.
(Added by Stats. 1994, Ch. 1082, Sec. 1. Effective January 1, 1995.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 1 - General Regulations › ARTICLE 4.7 - Multiple Employer Welfare Arrangements › Section 742.215.

742.215. As used in this article, “self-funded” means a multiple employer welfare arrangement that undertook at all times and for a continuous period of five years to reimburse health benefit costs incurred by covered persons pursuant to the benefits and coverages provided by their plan exclusively from plan assets. “Partially self-funded” means a multiple employer welfare arrangement that undertook at all times and for a continuous period of five years to reimburse health benefit costs incurred by covered persons pursuant to the benefits and coverages provided by their plan exclusively from plan assets, provided, however, that these benefits are reimbursable to the multiple employer welfare arrangement by stop loss insurance only to the extent that the benefits exceed fifty thousand dollars ($50,000) per claim.
(Added by Stats. 1994, Ch. 1082, Sec. 1. Effective January 1, 1995.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 1 - General Regulations › ARTICLE 4.7 - Multiple Employer Welfare Arrangements › Section 742.22.

742.22. It is the intent of the Legislature in enacting this article to allow a self-funded or partially self-funded multiple employer welfare arrangement to meet the requirements for a certificate of compliance to do business in California. If the self-funded or partially self-funded multiple employer welfare arrangement obtains and maintains a certificate of compliance under these sections, it shall not be considered an unauthorized insurer.
(Added by Stats. 1994, Ch. 1082, Sec. 1. Effective January 1, 1995.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 1 - General Regulations › ARTICLE 4.7 - Multiple Employer Welfare Arrangements › Section 742.23.

742.23. (a) After December 31, 1995, a self-funded or partially self-funded multiple employer welfare arrangement shall not provide any benefits for any resident of this state without first obtaining a certificate of compliance pursuant to this article, provided, however, that if the commissioner has not issued or denied an application for a certificate of compliance within 180 calendar days of the date of the filing of the completed application, the commissioner shall not take any action against the applicant solely on the basis that the department has not granted the certificate of compliance.
(b) The department may take regulatory action against a MEWA pursuant to all applicable provisions of this code during the period beginning on the effective date of this act and ending on the date on which the MEWA is certified under this article, at which time the provisions of this article shall apply.
(Added by Stats. 1994, Ch. 1082, Sec. 1. Effective January 1, 1995.)
2023 California Code › Insurance Code - INS › DIVISION 1 - GENERAL RULES GOVERNING INSURANCE › PART 2 - THE BUSINESS OF INSURANCE › CHAPTER 1 - General Regulations › ARTICLE 4.7 - Multiple Employer Welfare Arrangements › Section 742.25.

742.25. In determining the qualification of a multiple employer welfare arrangement, the commissioner will consider, among other things:
(a) The history of the multiple employer welfare arrangement.
(b) The competency, character, integrity, responsibility, and general fitness of the management and administration.
(c) Financial stability.
(d) Whether claims were promptly and fairly adjusted and are promptly and fully paid in accordance with the law and the terms of the plan.
(e) Fairness and honesty of methods of doing business.
(f) Hazard to covered employees or creditors.
(Added by Stats. 1994, Ch. 1082, Sec. 1. Effective January 1, 1995.)