reglab/statecodes huggingface dataset:
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 7 - Promoters › Section 2607.03 - Investment Required of Promoters

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Before any shares are offered to the public, except by
					 conditional subscriptions without cash payment (Cf. Section
					 2613.05 infra) or are sold to the
					 public, the promoters, organizers and all initial officers and directors as a
					 group shall purchase and pay for in cash a substantial portion of the original
					 issue on the same terms and conditions as share are offered to other investors.
					 Ordinarily, such portion of the issue to be purchased by such persons as a
					 group shall be not less than the sum of the following: 25% of the first million
					 dollars and 15% of all amounts over one million dollars. Although such persons
					 need not divide such purchase among themselves equally, ordinarily each shall
					 make a substantial investment unless persuasive reasons why such person cannot
					 do so are shown. Absent good cause the size of such group shall ordinarily not
					 exceed twenty in number.
1. Change
					 without regulatory effect amending section filed 7-14-2021 pursuant to section
					 100, title 1, California Code of
					 Regulations (Register 2021, No. 29). Filing deadline specified in Government
					 Code section
					 11349.3(a)
					 extended 60 calendar days pursuant to Executive Order
					 N-40-20.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 7 - Promoters › Section 2607.04 - Restriction of Sale of Promoters' Shares

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The persons investing pursuant to this article shall be
					 required to execute an appropriate agreement with the company for the benefit
					 of the company and all of its shareholders providing that the periods
					 hereinafter specified from the date of completion of the original issue or
					 granting of a Certificate of Authority, whichever is later, they and each of
					 them will not sell, transfer, or encumber, except by operation of law, any
					 shares acquired by them in satisfaction of the foregoing requirement or by
					 exercise of promotional options without the written consent of the
					 Commissioner. It will be permissible for each such person to dispose of the
					 following amounts of the aggregate of such person's said shares after
					 elapsation of the following indicated periods: 5% after one year; an additional
					 5% after two years; an additional 10% after three years; an additional 20%
					 after four years and the remainder after five years. A restrictive legend
					 prescribed by the permit shall be placed on each stock certificate representing
					 such shares. A composite example of such a contract is found in Section
					 2613.08, infra.
1. Change
					 without regulatory effect amending section filed 7-14-2021 pursuant to section
					 100, title 1, California Code of
					 Regulations (Register 2021, No. 29). Filing deadline specified in Government
					 Code section
					 11349.3(a)
					 extended 60 calendar days pursuant to Executive Order
					 N-40-20.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 7 - Promoters › Section 2607.05 - Options to Promoters

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
A.
				  Issuance of options to promoters will not be authorized except in connection
				  with an original issue and then only when it is satisfactorily demonstrated
				  that the promoters have rendered a genuine service of value to the company for
				  which they have not otherwise been fully compensated.
1. The issuance thereof will not ordinarily
				  be regarded as fair, just and equitable unless:
(a) The total number of shares subject to
				  such options will not exceed 10% of the number of shares initially sold and
				  issued for cash.
(b) The exercise
				  price stated in such options to be issued by other than a life insurer is not
				  less than the net price at which shares are sold to the public investors at the
				  time such options are granted, plus an increase of 5% thereof for each year
				  thereafter elapsing during the life of such options.
(c) The exercise price stated in such options
				  to be issued by a life insurer is not less than the net price at which shares
				  are sold to public investors at the time such options are granted, plus an
				  increase of 10% thereof for each year thereafter elapsing during the life of
				  such options.
(d) The options are
				  nontransferable except upon death of the optionee or by operation of
				  law.
(e) The options by their terms
				  are not exercisable more than five years after date of
				  issue.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 7 - Promoters › Section 2607.06 - Attorneys and Underwriters

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
A.
				  Stock options to attorneys at law for applicants are disfavored. (Section
				  839)
B. Stock options to underwriters are not
				  permitted. (Section
				  839)
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 8 - Stock Purchase and Stock Option Plans › Section 2608.02 - For Investment

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The Commissioner favors a requirement in such stock options
					 plans and options issued thereunder that the optionee sign a stipulation when
					 the optionee exercises the option that the optionee is purchasing for
					 investment and not for resale (Sects. 839, 843)
1. Change
					 without regulatory effect amending section filed 7-14-2021 pursuant to section
					 100, title 1, California Code of
					 Regulations (Register 2021, No. 29). Filing deadline specified in Government
					 Code section
					 11349.3(a)
					 extended 60 calendar days pursuant to Executive Order
					 N-40-20.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 8 - Stock Purchase and Stock Option Plans › Section 2608.03 - PRO-Rata Exercise

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The Commissioner does not object to a requirement in such
					 plans or options that the optionee shall exercise a pro-rata portion of the
					 optionee's options each year or such portion shall automatically expire and
					 thereafter be null and void. (Sects. 839, 843)
1. Change
					 without regulatory effect amending section filed 7-14-2021 pursuant to section
					 100, title 1, California Code of
					 Regulations (Register 2021, No. 29). Filing deadline specified in Government
					 Code section
					 11349.3(a)
					 extended 60 calendar days pursuant to Executive Order
					 N-40-20.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 8 - Stock Purchase and Stock Option Plans › Section 2608.04 - Overall Limitation on Options

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
It is considered prima facie unfair, unjust and inequitable
					 if the total number of shares subject at any one time to outstanding
					 unexercised option rights of all types, including but not limited to
					 promotional option, employee incentive options and life agents production
					 options, exceeds or will exceed 20% of the number of the then issued and
					 outstanding shares.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 8 - Stock Purchase and Stock Option Plans › Section 2608.05 - Procedure

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The Commissioner cannot and will not abdicate the
					 Commissioner's authority and duty under Insurance Code Section
					 839. Hence,
					 blanket permits for unlimited numbers of shares to be sold for unstated prices
					 to undetermined people pursuant to exercise of options granted for undescribed
					 reasons or under undisclosed circumstances will not be granted. The alternative
					 procedures prescribed in this section will care for the most commonly
					 encountered situations involving long term plans of this type, e.g., restricted
					 or qualified stock options plans.
A.
				  Applicant may apply for and obtain a negotiating permit for approval of its
				  plan; and thereafter, from year to year as options are voted to be granted to
				  employees, apply for and obtain a separate (definitive) permit for each year to
				  issue options to the persons and for the number of shares specified in its
				  board of directors' resolution and, upon due exercise thereof, to issue and
				  sell shares accordingly. Such an application shall allege the exercise price to
				  be stated in the options and shall by appropriate means show that it is fair,
				  just and equitable.
B. An applicant
				  having a long term plan, not desiring to follow the system outlined in
				  Paragraph A of this Section, and which can satisfy other requirements, may
				  proceed thusly:
1. It may apply for and secure
				  a permit approving the plan for circularization and authorizing the form of
				  option to be issued. Such permit will also authorize issue of options for a
				  period of not to exceed one year after date of the permit at an exercise price
				  per share alleged in the application and satisfactorily proved.
2. Thereafter, it may apply for yearly
				  extensions (amendments) of the permit at exercise prices duly alleged and
				  proved.
3. The filing fee for an
				  application for amendment is as stated in Section
				  2603.19 of Article 3, supra. Other
				  portions of said Article are also applicable, especially Sections
				  2603.06-2603.11.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 8 - Stock Purchase and Stock Option Plans › Section 2608.06 - Life Agents Production Stock Options Plans

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
In order to be found fair, just and equitable, any plan of
					 this nature shall ordinarily do not less than the following:
A. Be clear and unambiguous in its terms and
				  as simple as the subject matter permits.
B. Provide that it shall be submitted to and
				  approved by company's directors and stockholders before it becomes effective.
				  Any definitive permit approving such a plan will require said prior submission
				  and approval as a condition precedent to effectiveness of the authorization.
				  The Commissioner may require satisfactory evidence that full and fair
				  disclosure of outstanding options, the details of the plan and its intended
				  operation was made to the stockholders prior to their approval of the
				  plan.
C. Provide that no securities
				  (either rights to options or options) will be issued thereunder without a prior
				  permit of the Insurance Commissioner authorizing such issue; that company will
				  promptly and diligently endeavor to procure the necessary authorizations
				  contemplated by the plan.
D.
				  Provide that business written will serve as a basis for earning options only
				  after such business shall have been in full force and effect for three full
				  policy years and premiums thereon for such period shall have been fully paid.
				  Prepayment of premiums shall not accelerate the running of the persistency
				  period. A policy that terminates in a death claim prior to expiration of the
				  persistency period may be regarded as having run the full three
				  years.
E. Govern the earning of
				  conditional rights to options and the grant of options by a conservative
				  formula based on one of the following:
1. The
				  amount of premiums written (adjusted to an annual premium payment basis) and
				  paid on policies issued during a given calendar quarter;
2. Commissions earned per calendar quarter;
				  or
3. Some other reliable criterion
				  of production of business (per calendar quarter) having intrinsic value to the
				  company.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 8 - Stock Purchase and Stock Option Plans › Section 2608.07 - Price

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The exercise price to be stated in options issued pursuant
					 to an authorized plan of the kind described in Section
					 2608.06, supra, shall bear a
					 reasonable relationship to the actual value of the shares to be optioned.
					 "Reasonable relationship" is understood to be not less than 75% of such value
					 and not so great as to be unfair, unjust or inequitable. Actual value shall be
					 determined in a manner appropriate to the status of the company as found by the
					 Commissioner in accordance with the following:
A. In the case of an insurer which alleges
				  and proves to the Commissioner's reasonable satisfaction that its shares,
				  through substantial trading in a free market involving willing sellers and
				  willing and able buyers, have achieved a recognized value in the market place;
				  the plan shall provide that:
1. Company will
				  average bona fide trading prices in the last available reported transactions on
				  not less than one trading day per month each month during the production
				  quarter. The selection of such trading day shall be on a consistent basis. The
				  application for price clearance shall state such price so found and
				  substantiate the same by reasonable evidence.
2. Company shall with reasonable promptness
				  after expiration of each calendar quarter report such price to the
				  Commissioner, and apply for clearance of the price related thereto (rounded off
				  to the nearest tenth of a dollar) which it proposes under the plan to state in
				  options ultimately to be issued after expiration of the persistency period,
				  such options to be based on production during the quarter to which the price
				  relates.
3. If the Commissioner
				  does not within 30 days thereafter object, said price shall automatically,
				  after expiration of 30 days from and after receipt by the Commissioner of such
				  application for price clearance, be deemed acceptable. Whereupon, or upon
				  specific clearance thereof, company will proceed to notify its agents of their
				  production during such calendar quarter and the conditional rights which such
				  production has ostensibly earned according to the formula.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 8 - Stock Purchase and Stock Option Plans › Section 2608.08 - Directors' Resolution as to Fairness of Price

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Any application for authorization to issue options, whether
					 pursuant to a plan described in this Article or otherwise, shall be supported
					 by a certified copy of a resolution of applicant's board of directors
					 containing its findings, as follows:
A. In the case of an applicant who alleges
				  and proves to the Commissioner's reasonable satisfaction that its shares have,
				  through substantial trading in a free market involving willing sellers and
				  willing and able buyers, achieved a recognized value in the market place--that
				  the market price reported as a bona fide market price; that in the opinion of
				  its board of directors said price represents the fair value of the shares; and
				  that such issuance at the proposed price will be fair, just and equitable to
				  the company, to its present and future stockholders, and to other
				  optionees.
B. In the case of an
				  applicant which is either newly organized, or, if not newly organized, whose
				  shares have not yet achieved a recognized value in the market place as
				  described in Paragraph A of this Section--that the value of the shares as
				  stated represents, in the judgment of its board of directors, the true, fair
				  value of the same; and that the option price sought to be authorized is a fair,
				  just, and equitable price with respect to the company, to its present and
				  future stockholders, and to other optionees.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 9 - Miscellaneous Requirements › Section 2609.01 - Capital Stock, One Class of

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Complex capital structures involving more than one class of
					 capital stock are disfavored. (Secs.
					 839,
					 843)
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 9 - Miscellaneous Requirements › Section 2609.02 - Shares of Stock, Par Value of

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
All shares of insurance companies admitted or to be
					 admitted must have a specified par value. (Sec.
					 690. Does not apply to noninsuring
					 "insurers.")
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 9 - Miscellaneous Requirements › Section 2609.03 - Shares of Stock, Price of

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
A. The price per share of the initial issue
				  of stock of a newly organized domestic insurer, as "insurer" is defined by
				  Insurance Code Section
				  826 and
				  paragraph C of Section
				  2601.02 of these regulations,
				  shall be not less that $50.00 a share. (Secs.
				  839,
				  843)
B. Absent special circumstances compelling
				  the same, stock splits or other actions to reduce the value and price of its
				  shares will not be authorized for a domestic insurer unless and until:
1. It has filed successive annual statements
				  with the Department which, after audit, constitute satisfactory evidence in the
				  Commissioner's judgement that the applicant's operations have been and are
				  financially safe; and
2. Its shares
				  have acquired a reasonably stable value in the market place. (Section
				  839)
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 9 - Miscellaneous Requirements › Section 2609.04 - Price-Fair, Just and Equitable

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The following general principles are observed in the
					 determination of price:
A. The price
				  stated in the application of an operating but unseasoned insurer will be judged
				  with reference to Section
				  839 by the tangible results
				  produced by applicant with the surplus expended during the time it has been in
				  business. (Secs.
				  839,
				  840)
B. Market transactions of significant volume
				  in a free market are given primary weight.
C. In the case of stocks widely traded,
				  allegation of current bid and asked prices is usually sufficient in the absence
				  of recent substantial fluctuations.
D. Where there is an impending merger or some
				  other factor strongly influencing market price, the showing of market
				  transactions should extend from a period antedating such influence down to the
				  filing date, or as near thereto as practicable. (Secs.
				  839,
				  843)
E. In the case of an operating insurer whose
				  stock is substantially traded but has not acquired a stable market price, the
				  application should be supported by evidence covering a period of usually not
				  less than three months showing approximately the number of shares traded and
				  the prices paid. (Secs.
				  839,
				  843)
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 9 - Miscellaneous Requirements › Section 2609.05 - Certificate for Shares, Contents of

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Every form of certificate for shares submitted for
					 authorization shall make provision for stating all of the following:
A. The name of the record holder of the
				  shares represented thereby.
B. The
				  number, designation, if any, and class or series of shares represented
				  thereby.
C. The par value of the
				  shares represented thereby if applicant is subject to Section
				  690 of the
				  Insurance Code; otherwise, the par value, if any, of the shares represented
				  thereby, or a statement that the shares are without par value.
NOTE: Underwritten title companies, attorneys in fact of
					 reciprocal insurers, and exclusive managers of domestic insurers are not
					 subject to said Section
					 690. (Sec.
					 690 and Corporations Code Sec.
					 2401)
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 9 - Miscellaneous Requirements › Section 2609.06 - Certificate for Shares, Not to be Misleading

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Inclusion on share certificates of a caption stating
					 "$__________ Capital" is regarded as misleading unless the amount of capital
					 paid in is equivalent to the figure shown therein. Captions of this nature
					 desired to be included on share certificates may state "Authorized Capital
					 $__________." (Sec.
					 843)
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 9 - Miscellaneous Requirements › Section 2609.08 - Holding Company Expenses Included

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
In calculating the expenses described in the preceding
					 section, holding company expenses shall be included. Where organization of a
					 holding company and its subsidiary or subsidiaries are not substantially
					 concurrent, such expenses attributable to the holding company as may be
					 reasonably and fairly allocated to the insurer applicant shall be included. In
					 determining what is "substantially concurrent" the practicabilities of the
					 situation and the objective of the holding company for the reasonably
					 foreseeable future will be considered. (Section
					 715)
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 10 - Underwritten Title Companies and Other Noninsuring "Insurers" › Section 2610.01 - Purpose and Scope

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
As may be seen from Insurance Code Section
					 826,
					 Chapter 395 of the Statutes of 1965, effective September 17, 1965, extended the
					 definition of "insurer" as used in the Insurance Securities Law to include
					 underwritten title companies, attorneys-in-fact of reciprocal or interinsurance
					 exchanges, and exclusive manager of domestic insurers. Compare paragraph C of
					 Section 2601.02 of these regulations which
					 accurately states the Insurance Code definition.
Because a distinction has to be made in nomenclature
					 throughout these regulations to differentiate between the old type of entities
					 organized to assume the risk of loss under contracts of insurance and the three
					 newly included types of noninsuring "insurers," the term "insurance company" is
					 used herein to designate the former type; refer to paragraph F of Section
					 2601.01 of these regulations.
					 Where the Insurance Code term "insurer" appears, it is employed in the full
					 statutory sense and includes both types; refer to paragraph C, ibid.
The remainder of this article is devoted to pointing out
					 those portions of these regulations which do and which do not apply to
					 underwritten title companies, attorneys-in-fact of reciprocal insurers and
					 exclusive managers of domestic insurers. This article should produce the same
					 result as mere reliance upon the distinguishing terminology in the text of
					 these regulations, and vice versa.
1. Change
					 without regulatory effect amending third paragraph filed 7-14-2021 pursuant to
					 section 100, title 1, California Code of
					 Regulations (Register 2021, No. 29). Filing deadline specified in Government
					 Code section
					 11349.3(a)
					 extended 60 calendar days pursuant to Executive Order
					 N-40-20.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 10 - Underwritten Title Companies and Other Noninsuring "Insurers" › Section 2610.02 - Articles and Sections of Regulations Applicable

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Insofar as the nature of the subject matter permits and
					 unless otherwise specifically provided by law, the following portions of these
					 regulations apply to underwritten title companies and other noninsuring
					 "insurers":
Article 1
Article 2
Article 3,
except paragraph A. of
							 Section 2603.14. In connection with this
							 section see also Section
							 2610.03, infra.
Article 4
Article 5,
the first sentence of
							 Section 2605.01; paragraph B.of Section
							 2605.02; and, if applicable,
							 paragraph C., ibid; Sections
							 2605.03 and
							 2605.04. In connection with
							 Section 2605.01, see also Section
							 2610.03, infra.
Article 6
Article 7
Article 8,
Sections
							 2608.01 through
							 2608.05, and
							 2608.08.
Article 9,
except Section
							 2609.02.
Article 11 and
Article 13.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 10 - Underwritten Title Companies and Other Noninsuring "Insurers" › Section 2610.03 - Proving Required Minimum Capital and Surplus or Net Worth

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
A. The application
				  of an underwritten title company applying for a securities permit, unless
				  applicant possesses the largest amount of capital and surplus or net worth
				  specified by Insurance Code Section
				  12396(a)(1)
				  appropriate under the circumstances, shall allege and prove to the
				  Commissioner's reasonable satisfaction:
1.
				  The names of all of the counties wherein applicant is transacting any business
				  of examining public records affecting titles to real property, preparing
				  reports of title searches, certificates or abstracts of title, upon the basis
				  of which a title insurer regularly issues policies of title
				  insurance.
2. With respect to each
				  county named pursuant to subparagraph (1) above, the serial number stamped by
				  the County Recorder on the last document recorded by the County Recorder in the
				  official records of the County Recorder's office on the last recording day of
				  the calendar year preceding the filing with the Commissioner of such
				  application (i.e., the total number of documents so recorded in said year). The
				  Commissioner will accept a letter from a County Recorder setting forth such
				  information as satisfactory proof. This provision does not foreclose or prevent
				  other methods of proving such number to the Commissioner's
				  satisfaction.
3. The total of all
				  of the numbers alleged pursuant to subparagraph (2) above.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 11 - Reports of Transactions › Section 2611.01 - Report of Transactions Required

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Reports of Transactions shall be made in duplicate and
					 shall be sworn (or, where so authorized by statute in the place where the
					 verification is made, certified under penalty of perjury) to be true and
					 correct. They shall allege sufficient facts to show the following:
A. The number and amount of each kind of
				  securities sold.
B. The gross
				  proceeds and the net proceeds of such sale.
C. The disposition of such
				  proceeds.
D. Whether conditions of
				  the permit governing the authorized transactions were complied with.
E. In the case of preorganization, soliciting
				  or negotiating permit, the results of the authorized action.
F. Any other specific information required by
				  the permit. (Secs.
				  844,
				  843)
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 11 - Reports of Transactions › Section 2611.02 - Report of Transaction to be Captioned, Entitled and Labeled

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Every Report of Transaction shall be captioned as specified
					 in Section
					 2603.07 for applications. It shall
					 bear the same entitlement as a properly entitled application in the matter
					 reported on (refer to Sec.
					 2603.08, ante). It shall be
					 plainly labeled "REPORT OF TRANSACTIONS" if the instant report is the only
					 report to be filed; otherwise, it shall be labeled "FIRST REPORT OF
					 TRANSACTIONS," "SECOND REPORT... ," etc., "PRELIMINARY REPORT...," etc.,
					 "INTERIM REPORT...," etc., or "FINAL REPORT... ," etc., as may be appropriate
					 under the circumstances.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 11 - Reports of Transactions › Section 2611.03 - Report of Transactions, to be Timely Filed

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Applicants should take care to make and timely file the
					 verified report of transactions in duplicate lawfully required by the permit,
					 since failure to do so is a violation which could give rise to litigation and
					 may have other consequences. (Secs.
					 844,
					 833(i),
					 843) The Commissioner may withhold
					 favorable action on a subsequent application until any material delinquency
					 with respect to a prior report has been remedied.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 12 - Contribution Certificates › Section 2612.01 - In General

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Applications for permits to issue contribution certificates
					 are customarily granted authorizing sale of such certificates to financially
					 interested parties under conditions requiring emergency financing. Contribution
					 certificates only evidence a contingent promise to repay; they are not regarded
					 as a commercially salable security.
Such form of evidence of contribution (not an "evidence of
					 debt" in the sense commonly understood) will not ordinarily be authorized in
					 denominations of less than $5,000 and their sale to the general public will not
					 be permitted. (Secs.
					 839(a) and (c),
					 843)
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 12 - Contribution Certificates › Section 2612.02 - Form of

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The body of the form of contribution certificate, when
					 authorized, shall be substantially as shown herein. The following form is for
					 an interinsurance exchange; other entities having to resort to this device
					 shall adapt the substance thereof.
ABC INSURANCE EXCHANGE 1 Market Street __________,
					 California
CERTIFICATE OF CONTRIBUTION
Certificate No. __________
THIS IS TO CERTIFY THAT XYZ UNDERWRITERS (hereinafter
					 called "Contributor"), Attorney-in-Fact for ABC INSURANCE EXCHANGE, has
					 advanced to ABC INSURANCE EXCHANGE, a reciprocal insurer (hereinafter called
					 the "Exchange"), the sum of __________Thousand Dollars ($__________) in cash,
					 lawful money of the United States (hereinafter called the "Principal
					 Sum").
I
This Certificate of Contribution is used pursuant to the
					 authority granted by Permit No.__________ of the Insurance Commissioner of the
					 State of California and is hereby designated "Certificate
					 Number__________"*
II
The Principal Sum of this Certificate, to wit,
					 __________Thousand Dollars ($__________) shall, upon presentation of this
					 Certificate for endorsement of any partial payment, or upon complete surrender
					 for cancellation in return for final payment in full, be payable by the
					 Exchange at its Home Office at____________________, California, only out of the
					 excess of the admitted assets of the Exchange over the sum of:
1. All liabilities (including, but not
				  limited to claims, losses, reserves, reinsurance, dividends, production and
				  administrative expenses, taxes, loans, and advances), but excluding any amounts
				  for or on account of any outstanding Certificates of Contribution, including
				  this Certificate; and
2. An amount
				  (of surplus) equal to the largest of (a) or (b) or (c) hereinafter:
a) One and one-half times the amount required
				  by the laws of California at the time of such repayment for the issuance of a
				  Certificate of Authority to transact the classes of insurance which it is then
				  transacting anywhere, or which it is authorized to transact in California, or
				  the amount required by the laws of any other jurisdiction for the retention of
				  its Certificate of Authority in that jurisdiction, whichever is the largest
				  amount; or
b) In the event the
				  exchange at the time of repayment of this or any other Contribution Certificate
				  has any non-assessable policies outstanding, an amount equal to one and
				  one-half times the minimum paid-in capital required of incorporated insurers
				  issuing policies on a reserve basis and transacting the same classes of
				  insurance; or
c) $__________
______________________________
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 12 - Contribution Certificates › Section 2612.03 - Application to be Made by Exchange

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
In the case of borrowing by a reciprocal or inter-insurance
					 exchange, an application for authorization to issued and sell contribution
					 certificates shall be made by the exchange itself, rather than by the attorney
					 in fact. Application for the Commissioner's approval to pay outstanding
					 contribution certificates shall likewise be made by the
					 exchange.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 12 - Contribution Certificates › Section 2612.04 - Interest Rate on

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The rate of interest to be paid for such borrowing is a
					 matter of private contract, but agreement to pay an excessive rate may invoke
					 the ban of Section
					 839. Absent unusual circumstances,
					 a rate of not more than 1 1/2 % above the prevailing prime bank rate is not
					 regarded as excessive. (Secs.
					 839,
					 843)
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 12 - Contribution Certificates › Section 2612.05 - Reporting in Annual Statements

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
A permit authorizing issuance of contribution certificates
					 will provide substantially as follows:
In any financial statement required by law to be filed by
					 applicant with any public officer, or which may be published or distributed by
					 applicant, the principal sum of and accrued interest on these and any other
					 outstanding contribution certificates, which has not become a liability in
					 accordance with the terms thereof and is not reported in such financial
					 statement as a liability, shall be reported according to the appropriate
					 "Instructions for Completing Fire and Casualty Annual Statement" blank
					 promulgated by the Insurance Commissioner. Such amount shall be reported on the
					 appropriate line on page 3 of the annual statement either as "contribution
					 certificates," "outstanding contribution certificates," or "contributed
					 surplus." Other descriptions, such as "debentures," "surplus notes," "guaranty
					 fund," or "guaranteed certificates," are deemed misleading and are not
					 permitted.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 13 - Forms and Addenda › Section 2613.06 - Sample Form of Unconditional Subscription to Purchase Stock (with Cash Payment)

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
For convenient reference the following composite example of
					 a form of subscription agreement for use under an organizational permit is
					 provided. It is required that the substance of the last three paragraphs
					 thereof be contained in any form of subscription agreement used where purchase
					 money is collected and impounded.
SUBSCRIPTION TO PURCHASE STOCK OF A.B.C. INSURANCE
					 COMPANY
I would like to purchase __________ shares of common
					 capital stock of A.B.C. Insurance Company at $50.00 per share. The Stock
					 Certificate should be registered as follows:
_________________________
_________________________
_________________________
Address
I hereby acknowledge receipt of a copy of Company's
					 Prospectus dated __________, a copy of the Insurance Commissioner's Permit No.
					 __________, and a copy of this subscription agreement.
Enclosed is my check (payable to A.B.C. Insurance Company)
					 in the amount of $__________.
It is understood that the proceeds of my attached check or
					 money order and all other stock purchase monies will be deposited in an impound
					 with XYZ BANK, whose address is __________. In any event, the permit provides
					 that stock purchase monies will not be impounded longer than one year without
					 the consent of all subscribers.
Since there is a certain mutuality among subscribers, once
					 a subscriber's deposit is made, it will not ordinarily be released from impound
					 until the impound is terminated or the other subscribers consent to such
					 release.
The impound will normally be terminated upon issuance of a
					 certificate of authority to Company, whereupon all monies in impound will be
					 paid over in full to Company and certificates for shares mailed to the
					 purchasers. If the impound should be terminated for any other reason, stock
					 purchase monies will be returned in full without interest to the subscribers,
					 respectively, or in case of necessity to their successors in interest lawfully
					 entitled thereto.
_________________________
Signature
_________________________
_________________________
Address
Received check for $__________ this __________ day of
					 __________,199___.
A.B.C. INSURANCE COMPANY
_________________________
By _________________________
(Title or other description)
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4.3 - Procedures for Noncompliance Hearings › Article 1 - Governing Procedure for Noncompliance Hearings › Section 2614 - Definitions and Applicability

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
In this subchapter unless the context or subject matter
					 otherwise requires:
(a) "Department"
				  means the California Department of Insurance.
(b) "Commissioner" means the Insurance
				  Commissioner.
(c) "Enforcement
				  action" means any action based upon an allegation by the Department that an
				  insurer, organization, group or association, or any rate, rating plan, rating
				  system, or underwriting rule does not comply with the requirements and
				  standards of Chapter 9 of the California Insurance Code entitled Rates and
				  Rating and Other Organizations.
(d)
				  "Party" includes the Department, the respondent, intervenors, and any person,
				  other than an officer or an employee of the Department in that officer or
				  employee's official capacity, who has been allowed to appear or participate in
				  the proceeding.
(e) "Respondent"
				  means any person or entity against whom a Notice of Noncompliance is
				  filed.
(f) "Intervenor" means any
				  person or entity whose petition to intervene pursuant to California Insurance
				  Code section
				  1861.10 has
				  been granted.
(g) "Notice of
				  noncompliance" means the administrative document issued by the Commissioner. A
				  notice of noncompliance shall set forth in ordinary and concise language in
				  what manner and to what extent non-compliance is alleged to exist.
(h) "Administrative Hearing Bureau" means
				  that office, within the office of the Commissioner and, except where otherwise
				  specified in this subchapter, designated for receipt of all pleadings filed
				  pursuant to this subchapter.
(i)
				  "Administrative law judge" means a judge in the Administrative Hearing Bureau
				  within the office of the Commissioner.
(j) "Hearing Officer" means a person
				  appointed by the Commissioner to conduct a noncompliance hearing.
1. New
					 subchapter 4.3, article 1 (sections
					 2614-2614.27) and section filed
					 12-20-2006; operative 1-19-2007 (Register 2006, No. 51).
2.
					 Amendment of section heading and first paragraph filed 12-30-2010; operative
					 12-30-2010 pursuant to Government Code section
					 11343.4
					 (Register 2010, No. 53).
3. Change without regulatory effect
					 amending subsection (d) filed 7-14-2021 pursuant to section
					 100, title 1, California Code of
					 Regulations (Register 2021, No. 29). Filing deadline specified in Government
					 Code section
					 11349.3(a)
					 extended 60 calendar days pursuant to Executive Order
					 N-40-20.
Note: Authority cited: Section
						11400.20,
						Government Code. Reference: Sections
						1858,
						1858.01,
						1858.1 and
						1858.2,
						Insurance Code.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4.3 - Procedures for Noncompliance Hearings › Article 1 - Governing Procedure for Noncompliance Hearings › Section 2614.1 - Authority of Administrative Law Judge or Hearing Officer

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) To the extent not otherwise specified by
				  law or regulation, the administrative law judge or hearing officer shall:
				  control the course of proceedings; grant or deny requests for continuances;
				  administer oaths; issue subpoenas; rule on motions to compel discovery; receive
				  evidence; upon notice, hold appropriate conferences before or during hearings;
				  rule upon all objections or motions which do not involve final determination of
				  proceedings; receive offers of proof; hear argument; recommend to the
				  Commissioner approval or disapproval of proposed stipulations and settlements;
				  and fix the time and place for the filing of briefs.
(b) The administrative law judge or hearing
				  officer shall eliminate unnecessary delay in the progress and ultimate
				  resolution of the proceeding, assume and maintain control over the pace of the
				  proceeding, actively manage the proceeding from commencement to disposition,
				  and compel all parties to prepare and resolve all issues without delay. The
				  administrative law judge or hearing officer shall discourage continuances, only
				  granting continuances for good cause shown. Good cause includes circumstances
				  such as serious illness of a participant in the proceeding, death in the family
				  of a participant in the proceeding, or jury duty obligations of a participant
				  in the proceeding.
(c) The chief
				  administrative law judge shall exercise all authority set forth in this section
				  until a proceeding is assigned to an administrative law judge or hearing
				  officer.
1. New
					 section filed 12-20-2006; operative 1-19-2007 (Register 2006, No.
					 51).
Note: Authority cited: Section
						11400.20,
						Government Code. Reference: Sections
						1858,
						1858.01,
						1858.1 and
						1858.2,
						Insurance Code.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4.3 - Procedures for Noncompliance Hearings › Article 1 - Governing Procedure for Noncompliance Hearings › Section 2614.2 - Commencement of Proceedings

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a)
				  An enforcement action is commenced when the Department serves a written notice
				  of noncompliance pursuant to California Insurance Code section
				  1858.1,
				  which shall state in what manner and to what extent non-compliance is alleged
				  to exist; specifying a reasonable time, not less than 10 days thereafter, in
				  which that noncompliance may be corrected; and specifying the amount of any
				  penalty that may be due under Insurance Code section
				  1858.07.
(b) An administrative proceeding is commenced
				  when the Department files a request for hearing pursuant to California
				  Insurance Code section
				  1858.2 with
				  the Administrative Hearing Bureau. The request for hearing shall include copies
				  of any notice of noncompliance served on respondent by the Department and any
				  written response thereto by respondent.
1. New
					 section filed 12-20-2006; operative 1-19-2007 (Register 2006, No.
					 51).
Note: Authority cited: Section
						11400.20,
						Government Code. Reference: Sections
						1858,
						1858.01,
						1858.1 and
						1858.2,
						Insurance Code.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4.3 - Procedures for Noncompliance Hearings › Article 1 - Governing Procedure for Noncompliance Hearings › Section 2614.3 - Amended or Supplemental Notice of Noncompliance

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
At any time before the matter is submitted for decision the
					 Department may file an amended or supplemental notice of noncompliance. If the
					 amended or supplemental notice of noncompliance presents new charges,
					 respondent shall be afforded a reasonable opportunity to prepare a defense
					 thereto, but respondent shall not be entitled to file a further pleading unless
					 the administrative law judge or hearing officer in its discretion so orders.
					 Any new charges shall be deemed controverted, and any objections to the amended
					 or supplemental pleading shall be in writing.
1. New
					 section filed 12-20-2006; operative 1-19-2007 (Register 2006, No.
					 51).
Note: Authority cited: Section
						11400.20,
						Government Code. Reference: Sections
						1858,
						1858.01,
						1858.1 and
						1858.2,
						Insurance Code.