California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 5 - Organizational and Other Definitive Permits › Section 2605.01 - Applications for Organizational Permits

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Applications by underwritten title companies,
					 attorneys-in-fact of reciprocal insurers, and exclusive managers of domestic
					 insurance companies for permits to sell their stock for initial capitalization
					 purposes, are subject to and shall comply with the applicable portions of
					 Articles 1 through 4, paragraphs B., C., E., G., and H., of this Section
					 2605.01, and paragraph B. of
					 Section 2605.02. Similar applications by
					 insurance companies (organizations organized to assume the risk of loss under
					 contracts of insurance) in addition to complying with the last aforementioned
					 sections and articles hereof, shall (Sections
					 717,
					 718,
					 721,
					 839,
					 843):
A. Comply with Article 3, except Sections
				  2603.14 and
				  2603.15, of these regulations and
				  with the additional requirements set forth in this section.
B. Attach as an exhibit and incorporate by
				  reference on a form provided by the Commissioner, a biographical affidavit of
				  every officer, director, trustee, each proposed principal supervising or
				  managerial personnel, and of each known proposed investor who is expected to
				  purchase or hold or control for such person's own self or otherwise, directly
				  or indirectly, 10% or more of applicant's stock when it is sold and issued.
				  Such affidavit shall be completed by the individual concerned and, if executed
				  in this state, shall be either certified to under penalty of perjury or sworn
				  to before an officer duly authorized to administer oaths; and if executed in
				  any other place than the State of California, shall be duly sworn to under oath
				  according to the law of the place where the affidavit is made. The form and
				  text of such affidavit shall be as set forth in Section
				  2613.07, infra. (Sections
				  704.5,
				  717,
				  718,
				  843) It may be filed in a singular
				  copy only.
C. Allege or attach as
				  an exhibit incorporated by reference a plan of operation explaining fully at
				  least the following to the extent that these items are appropriate to the
				  nature of the applicant.
NOTE: All items are appropriate to an organization
					 expecting to transact "insurance" as the same is defined by Insurance Code
					 Section
					 22):
1. Kind of business the company will
				  transact; if "insurance" as defined by Insurance Code Section
				  22, name
				  the classes as they are defined by Insurance Code Section
				  101-
				  120;
				  otherwise, describe it. Specify where and with what facilities business will be
				  transacted and the estimated premium volume of such transactions by month or
				  year.
2. Whether company will
				  operate on the American Agency System or as direct writers.
3. Where and how it will recruit its agents
				  or other producers. How and by whom they will be trained.
4. Commission rates or salaries to be paid.
				  Attach sample contract forms and commission schedule, including those for
				  general agents.
5. Where and how
				  business will be developed.
6.
				  Sales techniques to be used.
7.
				  Advertising methods to be employed.
8. Whether applicant will control agents'
				  advertising and sales methods and, if so, how.
9. How and by whom claims will be processed
				  and losses adjusted and paid; the relationship of such adjusters to
				  company.
10. How claims adjusting
				  personnel will be compensated.
11.
				  If applicable, whether applicant will comply with Insurance Code Sections
				  815 and/or
				  816, as appropriate.
12. How and by
				  whom applications will be underwritten.
13. Initial salaries proposed to be
				  paid.
14. How and by whom the
				  company's investments will be managed and, if by other than a company officer,
				  for what compensation.
15. If
				  applicant expects to transact life or disability insurance, whether it will pay
				  or contract to pay directly or indirectly to any officer, director, trustee,
				  medical director, actuary or investment committeeman any commission or
				  compensation contingent on life or disability business written, renewed or paid
				  for and, if so, at what rate or rates and under what circumstances.
16. What procedure, if any, company will have
				  to ascertain whether its officers and directors occupy positions in other
				  businesses or have other financial interests such that applicant's business or
				  investment transactions or conduct of its business will directly or indirectly
				  affect them or their other financial interest, and vice versa. (Sections
				  843,
				  1101 and Ops. Cal. Atty. Gen. No.
				  64/230, Sept. 24, 1965.) (Sections
				  839,
				  843 and Corporations Code Sec.
				  820 as to noninsuring
				  insurers.)