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California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 3 - Insurers › Article 3 - Annual Statements › Premiums in Course of Collection › Section 2303.30 - Effective Date

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) No
					 licensee may claim reserve credit for a new or renewal reinsurance agreement
					 executed on or after January 1, 2018, unless the agreement and any security
					 provided therefor conform to the applicable requirements of this
					 article.
(b) All reinsurance
					 agreements and any security provided therefor that are executed prior to
					 January 1, 2007 shall remain subject to the requirements of Bulletin 97-5
					 issued pursuant to Code Section
					 922.8. Bulletin 97-5 is
					 incorporated herein by reference for that limited purpose.
(c) Licensees shall continue to conform to
					 the requirements of the NAIC Accounting Guidance, to the extent that those
					 requirements do not conflict with applicable requirements of the Code and
					 Bulletin 97-5, or, after January 1, 2018, with this article.
(d) Sections
					 2303.23 to
					 2303.28 of this article shall
					 pertain to all Covered Policies in force as of and after January 1,
					 2018.
1.
						Renumbering of former section
						2303.23 to new section
						2303.30, including amendment of
						section and NOTE, filed 11-27-2017; operative 1-1-2018 (Register 2017, No.
						48).
Note: Authority cited: Sections
						  720,
						  730,
						  736,
						  739.9,
						  922.8,
						  922.85,
						  923,
						  924,
						  1011.5,
						  1215.9,
						  1781.12,
						  10489.94
						  and
						  12921,
						  Insurance Code; CalFarm Insurance Company v. Deukmejian, 48 Cal. 3d 805 (1989);
						  and 20th Century Insurance Company v. Garamendi, 8 Cal. 4th 216 (1994).
						  Reference: Sections
						  700,
						  701,
						  717,
						  717.5,
						  730,
						  733,
						  736,
						  739,
						  900,
						  922.1,
						  922.2,
						  922.3,
						  922.4,
						  922.41,
						  922.5,
						  922.6,
						  922.7,
						  922.8,
						  922.85,
						  922.9,
						  923,
						  924,
						  925,
						  925.2,
						  925.4,
						  1011,
						  1011.5,
						  1215.5(b)(3),
						  1215.5(f),
						  1781.10,
						  10489.1,
						  10489.12,
						  10489.96
						  and
						  12921,
						  Insurance Code.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 3 - Insurers › Article 3 - Annual Statements › Premiums in Course of Collection › Section 2305 - Documents Accompanying the Fraternal Orders Annual Statement, Blank Which Must Be Signed by an Actuary

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) Documents accompanying the filing of the
					 Fraternal Orders Annul Statement Blank with the State of California Insurance
					 Department shall include a statement of actuarial opinion:
(1) Statement of Actuarial Opinion. The
					 statement of actuarial opinion prepared by the actuary in accordance with the
					 Instructions to the Fraternal Orders Annual Statement
					 Blank.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 3 - Insurers › Article 3 - Annual Statements › Premiums in Course of Collection › Section 2306 - Documents Accompanying the Life and Accident and Health Annual Statement Blank Which Must Be Signed by an Actuary

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) Documents accompanying the filing of the
					 Life and Accident and Health Annual Statement Blank with the State of
					 California Insurance Department shall include a statement of actuarial opinion:
(1) Statement of Actuarial Opinion. The
					 statement of actuarial opinion prepared by the actuary in accordance with the
					 Instructions to the Life and Accident and Health Annual Statement
					 Blank.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 3 - Insurers › Article 3 - Annual Statements › Premiums in Course of Collection › Section 2307 - California Earthquake Zoning and Probable Maximum Loss Evaluation Program

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
All insurers transacting property insurance in this State
						must record earthquake liabilities written in this State and develop statistics
						in accordance with the instructions contained in the Insurance Department,
						California Earthquake Liability Report Form.
Insurers specializing in the writing of unique or unusual
						risks may report on forms and plans that are submitted to the Insurance
						Department and found to be compatible with the uniform form. Exceptions will be
						granted only where compatibility is clearly demonstrated by the insurer.
(a) Insurers must provide their reinsurers
					 zone, construction, PML and deductible information on the same basis and format
					 as they submit to the Insurance Department for liabilities ceded under each
					 reinsurance treaty other than catastrophe treaties. Reinsurers shall combine
					 this information with their own facultative recordings for a total aggregate
					 probable maximum loss estimate on their writings.
(b) Insurers writing risks under excess of
					 loss, loss limit, aggregate, stop loss or similar covers must report the
					 following information:
1. Zone
					 designation
2. Company aggregate
					 limit
3. Net probable Maximum Loss
					 Insurers are expected to develop and maintain information on methodology of
					 determining Net Probable Maximum Loss for review by the Department's
					 examiners.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 3 - Insurers › Article 3 - Annual Statements › Premiums in Course of Collection › Section 2308.1 - Electronic Filing of Annual and Quarterly Statements

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) Designation: Effective with the 2008
					 annual statement filing due March 1, 2009, and for every annual and quarterly
					 statement due thereafter, the Insurance Commissioner ("Commissioner")
					 designates the Internet-based financial filing system operated by the National
					 Association of Insurance Commissioners ("NAIC") as the filing system to receive
					 and store electronic filings of annual and quarterly financial statements from
					 all admitted insurers, as defined by Insurance Code Sections
					 23 and
					 24, on
					 behalf of the Commissioner.
(b) Use
					 of NAIC Electronic Filing: All admitted insurers' annual and quarterly
					 financial statements shall be filed electronically with and transmitted to the
					 NAIC, except as otherwise indicated in these rules. The following conditions
					 relate to such electronic filings:
(1) When
					 Filed: Solely for purposes of a filing made with the NAIC, a document is
					 considered filed with the Commissioner when the filing is accepted by the
					 NAIC.
(2) Confirmation of Filing:
					 Admitted Foreign and Alien insurers, as defined by Insurance Code Sections
					 24,
					 27, and
					 1580, shall
					 provide the Commissioner with a paper original of a properly executed Jurat
					 page from the related financial statement filed electronically with the NAIC,
					 as confirmation of each NAIC electronic filing, unless a paper original of such
					 properly executed Jurat page is on file with its domestic regulator.
(3) Any financial statement required to be
					 filed with the NAIC pursuant to this section that is not accepted for filing by
					 the NAIC shall be filed in paper directly with the Commissioner in accordance
					 with California Code of Regulations, Title 10, Section
					 2308.2.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 3 - Insurers › Article 3 - Annual Statements › Premiums in Course of Collection › Section 2308.2 - Paper Filing of Domestic Insurers' Annual and Quarterly Statements

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
In addition to filing electronically with the NAIC,
						pursuant to California Code of Regulations, Title 10, Section
						2308.1, admitted domestic
						insurers, as defined by Insurance Code Sections
						24 and
						26, shall
						file all annual and quarterly financial statements in paper directly with the
						Commissioner.
1. New
						section filed 2-5-2009; operative 2-5-2009 pursuant to Government Code section
						11343.4
						(Register 2009, No. 6).
Note: Authority cited: Sections
						  733,
						  900,
						  923 and
						  12921(c),
						  Insurance Code; CalFarm Insurance Company v. Deukmejian (1989) 48 Cal.3d 805;
						  and 20th Century Insurance Company v. Garamendi (1994) 8 Cal. 4th 216.
						  Reference: Sections
						  733,
						  900,
						  903,
						  903.5,
						  923 and
						  924,
						  Insurance Code.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 3 - Insurers › Article 3 - Annual Statements › Premiums in Course of Collection › Section 2308.3 - Paper and Electronic Filing of California Supplemental Financial Statements

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
All admitted insurers shall file their California
						supplemental financial statements in both electronic and paper form directly
						with the Commissioner.
1. New
						section filed 2-5-2009; operative 2-5-2009 pursuant to Government Code section
						11343.4
						(Register 2009, No. 6).
Note: Authority cited: Sections
						  733,
						  900,
						  923 and
						  12921(c),
						  Insurance Code; CalFarm Insurance Company v. Deukmejian (1989) 48 Ca1.3d 805;
						  and 20th Century Insurance Company v. Garamendi (1994) 8 Cal. 4th 216.
						  Reference: Sections
						  733,
						  900 and
						  923,
						  Insurance Code.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 3 - Insurers › Article 3.3 - Annual Financial Reporting › Section 2309.4 - General Requirements Related to Filing and Extensions for Filing of Annual Audited Financial Reports and Audit Committee Appointment

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) All insurers
				  shall have an annual audit by an independent certified public accountant and
				  shall file an audited financial report with the commissioner on or before June
				  1 for the year ended December 31 immediately preceding. The commissioner may
				  require an insurer to file an audited financial report earlier than June 1 with
				  ninety (90) days advance notice to the insurer.
(b) Extensions may be permitted as allowed by
				  the statute governing audit reports.
(c) Extension(s) of the June 1 filing date of
				  the Management's Report of Internal Control over Financial Reporting shall be
				  granted commensurate with any extension(s) pursuant to Section
				  2309.4(b).
(d) Every insurer required to file an annual
				  audited financial report pursuant to these regulations shall designate a group
				  of individuals as constituting its Audit Committee, as defined in Section
				  2309.3. The Audit Committee of an
				  entity that controls an insurer may be deemed to be the insurer's Audit
				  Committee for purposes of these regulations at the election of the controlling
				  person.
1. New
					 section filed 12-7-2009; operative 1-1-2010 pursuant to Government Code section
					 11343.4
					 (Register 2009, No. 50).
Note: Authority cited: Section
						900.2,
						Insurance Code. Reference: Section
						900.2,
						Insurance Code.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 3 - Insurers › Article 3.3 - Annual Financial Reporting › Section 2309.5 - Contents of Annual Audited Financial Report

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The annual audited financial report shall report the
					 financial position of the insurer as of the end of the most recent calendar
					 year and the results of its operations, cash flows and changes in capital and
					 surplus for the year then ended in conformity with statutory accounting
					 practices prescribed, or otherwise permitted, by the Department of Insurance of
					 the state of domicile.
The annual audited financial report shall include the
					 following:
(a) Report of independent
				  certified public accountant.
(b)
				  Balance sheet reporting admitted assets, liabilities, capital and
				  surplus.
(c) Statement of
				  operations.
(d) Statement of cash
				  flows.
(e) Statement of changes in
				  capital and surplus.
(f) Notes to
				  financial statements. These notes shall be those required by the appropriate
				  NAIC Annual Statement Instructions and the NAIC Accounting Practices and
				  Procedures Manual. The notes shall include a reconciliation of differences, if
				  any, between the audited statutory financial statements and the annual
				  statement filed pursuant to any applicable section of the California Insurance
				  Code, with a written description of the nature of these differences.
(g) The financial statements included in the
				  audited financial report shall be prepared in a form and using language and
				  groupings substantially the same as the relevant sections of the annual
				  statement of the insurer filed with the commissioner, and the financial
				  statement shall be comparative, presenting the amounts as of December 31 of the
				  current year and the amounts as of the immediately preceding December 31.
				  (However, in the first year in which an insurer is required to file an audited
				  financial report, the comparative data may be omitted).
1. New
					 section filed 12-7-2009; operative 1-1-2010 pursuant to Government Code section
					 11343.4
					 (Register 2009, No. 50).
Note: Authority cited: Section
						900.2,
						Insurance Code. Reference: Section
						900.2,
						Insurance Code.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 3 - Insurers › Article 3.3 - Annual Financial Reporting › Section 2309.7 - Qualifications of Independent Certified Public Accountant

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) The commissioner shall not recognize a
				  person or firm as a qualified independent certified public accountant if the
				  person or firm:
(1) Is not in good standing
				  with the AICPA and in all states in which the accountant is licensed to
				  practice, or, for a Canadian or British company, that is not a chartered
				  accountant; or
(2) Has either
				  directly or indirectly entered into an agreement of indemnity or release from
				  liability (collectively referred to as indemnification) with respect to the
				  audit of the insurer.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 3 - Insurers › Article 3.3 - Annual Financial Reporting › Section 2309.8 - Consolidated or Combined Audits

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
An insurer may make written application to the commissioner
					 for approval to file audited consolidated or combined financial statements in
					 lieu of separate annual audited financial statements if the insurer is part of
					 a group of insurance companies that utilizes a pooling or 100 percent
					 reinsurance agreement that affects the solvency and integrity of the insurer's
					 reserves and the insurer cedes all of its direct and assumed business to the
					 pool. In such cases, a columnar consolidating or combining worksheet shall be
					 filed with the report, as follows:
(a)
				  Amounts shown on the consolidated or combined audited financial report shall be
				  shown on the worksheet;
(b) Amounts
				  for each insurer subject to this section shall be stated separately;
(c) Non-insurance operations may be shown on
				  the worksheet on a combined or individual basis;
(d) Explanations of consolidating and
				  eliminating entries shall be included; and
(e) A reconciliation shall be included of any
				  differences between the amounts shown in the individual insurer columns of the
				  worksheet and comparable amounts shown on the annual statements of the
				  insurers.
1. New
					 section filed 12-7-2009; operative 1-1-2010 pursuant to Government Code section
					 11343.4
					 (Register 2009, No. 50).
Note: Authority cited: Section
						900.2,
						Insurance Code. Reference: Section
						900.2,
						Insurance Code.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 3 - Insurers › Article 3.3 - Annual Financial Reporting › Section 2309.9 - Scope of Audit and Report of Independent Certified Public Accountant

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Financial statements furnished pursuant to Section
					 2309.5 shall be examined by the
					 independent certified public accountant. The audit of the insurer's financial
					 statements shall be conducted in accordance with generally accepted auditing
					 standards. In accordance with AU Section
					 319 of the Professional Standards
					 of the AICPA, Consideration of Internal Control in a Financial Statement Audit,
					 the independent certified public accountant should obtain an understanding of
					 internal control sufficient to plan the audit. To the extent required by AU
					 319, for those insurers required to file a Management's Report of Internal
					 Control over Financial Reporting pursuant to Section
					 2309.16, the independent certified
					 public accountant should consider (as that term is defined in Statement on
					 Auditing Standards (SAS) No. 102, Defining Professional Requirements in
					 Statements on Auditing Standards or its replacement) the most recently
					 available report in planning and performing the audit of the statutory
					 financial statements. Consideration shall be given to the procedures
					 illustrated in the Financial Condition Examiners Handbook promulgated by the
					 National Association of Insurance Commissioners as the independent certified
					 public accountant deems necessary.
1. New
					 section filed 12-7-2009; operative 1-1-2010 pursuant to Government Code section
					 11343.4
					 (Register 2009, No. 50).
Note: Authority cited: Section
						900.2,
						Insurance Code. Reference: Section
						900.2,
						Insurance Code.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 3 - Insurers › Article 3.3 - Annual Financial Reporting › Section 2309.10 - Notification of Adverse Financial Condition

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) The insurer required to furnish the
				  annual audited financial report shall require the independent certified public
				  accountant to report, in writing, within five (5) business days to the board of
				  directors or its Audit Committee any determination by the independent certified
				  public accountant that the insurer has materially misstated its financial
				  condition as reported to the commissioner as of the balance sheet date
				  currently under audit or that the insurer does not meet the minimum capital and
				  surplus requirement of the California insurance code as of that date. An
				  insurer that has received a report pursuant to this paragraph shall forward a
				  copy of the report to the commissioner within five (5) business days of receipt
				  of the report and shall provide the independent certified public accountant
				  making the report with evidence of the report being furnished to the
				  commissioner. If the independent certified public accountant fails to receive
				  the evidence within the required five (5) business day period, the independent
				  certified public accountant shall furnish to the commissioner a copy of its
				  report within the next five (5) business days.
(b) No independent certified public
				  accountant shall be liable in any manner to any person for any statement made
				  in connection with the above paragraph if the statement is made in good faith
				  in compliance with Subsection (a).
(c) If the accountant, subsequent to the date
				  of the audited financial report filed pursuant to these regulations, becomes
				  aware of facts that might have affected the accountant's report, the
				  commissioner notes the obligation of the accountant to take such action as
				  prescribed in Volume 1, Section AU 561 of the Professional Standards of the
				  AICPA.
1. New
					 section filed 12-7-2009; operative 1-1-2010 pursuant to Government Code section
					 11343.4
					 (Register 2009, No. 50).
2. Change without regulatory effect
					 amending subsection (c) 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
						900.2,
						Insurance Code. Reference: Section
						900.2,
						Insurance Code.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 3 - Insurers › Article 3.3 - Annual Financial Reporting › Section 2309.11 - Communication of Internal Control Related Matters Noted in an Audit

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) In addition to
				  the annual audited financial report, each insurer shall furnish the
				  commissioner with a written communication as to any unremediated material
				  weaknesses in its internal controls over financial reporting noted during the
				  audit. Such communication shall be prepared by the accountant within sixty (60)
				  days after the filing of the annual audited financial report, and shall contain
				  a description of any unremediated material weakness (as the term "material
				  weakness" is defined by Statement on Auditing Standard 60, Communication of
				  Internal Control Related Matters Noted in an Audit, or its replacement) as of
				  December 31 immediately preceding (so as to coincide with the audited financial
				  report discussed in Section
				  2309.4(a)) in the
				  insurer's internal control over financial reporting noted by the accountant
				  during the course of the audit of the financial statements. If no unremediated
				  material weaknesses were noted, the communication should so state.
(b) The insurer is required to provide a
				  description of remedial actions taken or proposed to correct unremediated
				  material weaknesses, if the actions are not described in the accountant's
				  communication.
1. New
					 section filed 12-7-2009; operative 1-1-2010 pursuant to Government Code section
					 11343.4
					 (Register 2009, No. 50).
Note: Authority cited: Section
						900.2,
						Insurance Code. Reference: Section
						900.2,
						Insurance Code.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 3 - Insurers › Article 3.3 - Annual Financial Reporting › Section 2309.12 - Accountant's Letter of Qualifications

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The accountant shall furnish the insurer in connection
					 with, and for inclusion in, the filing of the annual audited financial report,
					 a letter stating:
(a) That the
				  accountant is independent with respect to the insurer and conforms to the
				  standards of the accountant's profession as contained in the Code of
				  Professional Ethics and pronouncements of the AICPA and the Rules of
				  Professional Conduct of the California Board of Accountancy, or similar
				  code;
(b) The background and
				  experience in general, and the experience in audits of insurers of the staff
				  assigned to the engagement and whether each is an independent certified public
				  accountant. Nothing within these regulations shall be construed as prohibiting
				  the accountant from utilizing such staff as the accountant deems appropriate
				  where use is consistent with the standards prescribed by generally accepted
				  auditing standards;
(c) That the
				  accountant understands the annual audited financial report and the accountant's
				  opinion thereon will be filed in compliance with these regulations and that the
				  commissioner will be relying on this information in the monitoring and
				  regulation of the financial position of insurers;
(d) That the accountant consents to the
				  requirements of Section
				  2309.13 of these regulations and
				  that the accountant consents and agrees to make available for review by the
				  commissioner, or the commissioner's designee or appointed agent, the
				  workpapers, as defined in Section
				  2309.13;
(e) A representation that the accountant is
				  properly licensed by an appropriate state licensing authority and is a member
				  in good standing in the AICPA; and
(f) A representation that the accountant is
				  in compliance with the requirements of Section
				  2309.7 of these
				  regulations.
1. New
					 section filed 12-7-2009; operative 1-1-2010 pursuant to Government Code section
					 11343.4
					 (Register 2009, No. 50).
2. Change without regulatory effect
					 amending subsections (a)-(c) 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
						900.2,
						Insurance Code. Reference: Section
						900.2,
						Insurance Code.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 3 - Insurers › Article 3.3 - Annual Financial Reporting › Section 2309.13 - Definition, Availability and Maintenance of Independent Certified Public Accountants Workpapers

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a)
				  Workpapers are the records kept by the independent certified public accountant
				  of the procedures followed, the tests performed, the information obtained, and
				  the conclusions reached pertinent to the accountant's audit of the financial
				  statements of an insurer. Workpapers, accordingly, may include audit planning
				  documentation, work programs, analyses, memoranda, letters of confirmation and
				  representation, abstracts of company documents and schedules or commentaries
				  prepared or obtained by the independent certified public accountant in the
				  course of the independent certified public accountant's audit of the financial
				  statements of an insurer and which support the accountant's opinion.
(b) Every insurer required to file an audited
				  financial report pursuant to these regulations, shall require the accountant to
				  make available for review by insurance department examiners, all workpapers
				  prepared in the conduct of the accountant's audit and any communications
				  related to the audit between the accountant and the insurer, at the offices of
				  the insurer, at the insurance department or at any other reasonable place
				  designated by the commissioner. The insurer shall require that the accountant
				  retain the audit workpapers and communications until the insurance department
				  has filed a report on examination covering the period of the audit but no
				  longer than seven (7) years from the date of the audit report.
(c) In the conduct of the aforementioned
				  periodic review by the insurance department examiners, it shall be agreed that
				  photocopies of pertinent audit workpapers may be made and retained by the
				  department. Such reviews by the department examiners shall be considered
				  examinations, and all working papers and communications obtained during the
				  course of such examinations shall be afforded the same confidentiality as other
				  examination workpapers generated by the department.
1. New
					 section filed 12-7-2009; operative 1-1-2010 pursuant to Government Code section
					 11343.4
					 (Register 2009, No. 50).
2. Change without regulatory effect
					 amending subsection (a) 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
						900.2,
						Insurance Code; CalFarm Insurance Company v. Deukmejian (1989), 48 Cal.3d 805;
						20th Century Insurance Company v. Garamendi (1994), 8 Cal.4th 216. Reference:
						Section
						900.2,
						Insurance Code.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 3 - Insurers › Article 3.3 - Annual Financial Reporting › Section 2309.15 - Conduct of Insurer in Connection with the Preparation of Required Reports and Documents

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a)
				  No director or officer of an insurer shall, directly or indirectly:
(1) Make or cause to be made a materially
				  false or misleading statement to an accountant in connection with any audit,
				  review or communication required under these regulations; or
(2) Omit to state, or cause another person to
				  omit to state, any material fact necessary in order to make statements made, in
				  light of the circumstances under which the statements were made, not misleading
				  to an accountant in connection with any audit, review or communication required
				  under these regulations.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 3 - Insurers › Article 3.3 - Annual Financial Reporting › Section 2309.17 - Exemptions Due to Financial or Organizational Hardship; Effective Dates

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) Upon written
				  application of any insurer, the commissioner may grant an exemption from
				  compliance with any and all provisions of these regulations if the commissioner
				  finds, upon review of the application, that compliance with these regulations
				  would constitute a financial or organizational hardship upon the insurer. An
				  exemption may be granted at any time and from time to time for a specified
				  period or periods. Within ten (10) days from a denial of an insurer's written
				  request for an exemption from these regulations, the insurer may request in
				  writing a hearing on its application for an exemption.
(b) Domestic insurers that have retained a
				  certified public accountant on the effective date of these regulations who
				  qualifies as independent shall comply with these regulations for the year
				  ending December 31, 2010 and each year thereafter unless the commissioner
				  permits otherwise.
(c) Domestic
				  insurers that have not retained a certified public accountant on the effective
				  date of these regulations who qualifies as independent shall meet the following
				  schedule for compliance unless the commissioner permits otherwise.
(1) File with the Insurance Commissioner an
				  audited financial report as of December 31, 2010.
(2) For the year ending December 31, 2010 and
				  each year thereafter, such insurers shall file with the commissioner all
				  reports and communication required by these regulations.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 3 - Insurers › Article 3.3 - Annual Financial Reporting › Section 2309.18 - Canadian and British Companies

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) In the case of Canadian and British
				  insurers, the annual audited financial report shall be defined as the annual
				  statement of total business on the form filed by such companies with their
				  supervision authority duly audited by an independent chartered
				  accountant.
(b) For such insurers,
				  the letter required in Section
				  2309.6(b) shall
				  state that the accountant is aware of the requirements relating to the annual
				  Audited financial report filed with the commissioner pursuant to Section
				  2309.4 and shall affirm that the
				  opinion expressed is in conformity with those requirements.
1. New
					 section filed 12-7-2009; operative 1-1-2010 pursuant to Government Code section
					 11343.4
					 (Register 2009, No. 50).
Note: Authority cited: Section
						900.2,
						Insurance Code. Reference: Section
						900.2,
						Insurance Code.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 3 - Insurers › Article 3.3 - Annual Financial Reporting › Section 2309.20 - Address Information

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
All reports, requests, and general correspondence sent to
					 the commissioner pursuant to these regulations should include the specific
					 regulation section number(s) under which the report, request, or correspondence
					 is submitted and should be addressed as follows:
CALIFORNIA DEPARTMENT OF INSURANCE
FINANCIAL SURVEILLANCE BRANCH
RE: REGULATION SECTION NUMBER(S): XXXX.XX
300 SOUTH SPRING STREET, SOUTH TOWER - 13TH FLOOR
LOS ANGELES, CA 90013
1. New
					 section filed 12-7-2009; operative 1-1-2010 pursuant to Government Code section
					 11343.4
					 (Register 2009, No. 50).
Note: Authority cited: Section
						900.2,
						Insurance Code. Reference: Section
						900.2,
						Insurance Code.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 3 - Insurers › Article 3.5 - Minimum Reserve Standards for Valuation of Disability Insurance Contracts › Section 2310 - General Rule

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a)
				  Applicability
These standards apply to all individual and group
					 disability insurance except credit insurance and disability waiver of premium,
					 disability income, and accidental death benefit riders that are supplementary
					 to ordinary life insurance policies or contracts.
(b) Reserve Adequacy
With respect to any block of contracts, or with respect to
					 an insurer's disability business as a whole, a prospective gross premium
					 valuation is a valuable test of reserve adequacy as of a given valuation date.
					 Such a gross premiums valuation will take into account, for contracts in force,
					 in a claims status, or in a continuation of benefits status on the valuation
					 date, the present value as of the valuation date of: all expected benefits
					 unpaid, all expected expenses unpaid, and all unearned or expected premiums,
					 adjusted for future premium increases reasonably expected to be put into
					 effect.
Such a gross premium valuation shall be performed whenever
					 a significant doubt exists as to reserve adequacy with respect to any major
					 block of contracts, or with respect to the insurer's disability business as a
					 whole. In the event inadequacy is found to exist, immediate recognition shall
					 be made and the reserves restored to adequacy. Adequate reserves (inclusive of
					 claim, premium and contract reserves, if any) shall be held with respect to all
					 contracts, regardless of whether contract reserves are required for such
					 contracts under these standards.
Whenever minimum reserves, as defined in this article,
					 exceed reserve requirements as determined by a prospective gross premium
					 valuation, such minimum reserves remain the minimum requirement under this
					 article.
When an insurer determines that adequacy of its disability
					 insurance reserves requires reserves in excess of the minimum standards
					 specified herein, such increased reserves shall be held and shall be considered
					 the minimum reserves for that insurer.
Adequacy of an insurer's disability insurance reserves
					 shall be determined on the basis of the following three categories: claim
					 reserves, premium reserves and contract reserves. Adequate reserves for each of
					 the three categories shall be separately determined.
1. New
					 article 3.5 and section filed 11-4-94; operative 12-5-94 (Register 94, No.
					 44).
Note: Authority cited: Sections
						997(a)
						and
						10489.95,
						Insurance Code. Reference: Sections
						985,
						997 and
						10489.15(a),
						Insurance Code.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 3 - Insurers › Article 3.5 - Minimum Reserve Standards for Valuation of Disability Insurance Contracts › Section 2312 - Claim Reserves

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a)
				  General Rules
(1) Claim reserves are required
				  for all incurred but unpaid claims (these include all claims accrued and
				  unaccrued, reported and unreported) on all disability insurance policies as
				  defined in §
											2310(a).
(2) Appropriate claim expense reserves are
				  required with respect to the estimated expense of settlement of all incurred
				  but unpaid claims.
(3) All such
				  reserves for prior valuation years are to be tested for adequacy and
				  reasonableness along the lines of claim runoff schedules in accordance with the
				  financial statement as required by Insurance Code §§
											900 and
				  923
				  including consideration of any residual unpaid liability.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 3 - Insurers › Article 3.5 - Minimum Reserve Standards for Valuation of Disability Insurance Contracts › Section 2312.3 - Premium Reserves

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a)
				  General Rules
(1) Unearned premium reserves
				  are required for all contracts with respect to the period of coverage for which
				  premiums, other than premiums paid in advance, have been paid beyond the date
				  of valuation.
(2) If premiums due
				  and unpaid are carried as an asset, such premiums shall be treated as premiums
				  in force, subject to unearned premium reserve determination. The value of
				  unpaid commissions, premium taxes, and the cost of collection associated with
				  due and unpaid premiums shall be carried as an offsetting liability.
(3) The gross premiums paid in advance for a
				  period of coverage commencing after the next premium due date which follows the
				  date of valuation may be discounted, at rates not exceeding those in §
											2315(b), to the
				  valuation date and shall be held either as a separate liability or as an
				  addition to the unearned premium reserve which would otherwise be required as a
				  minimum.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 3 - Insurers › Article 3.5 - Minimum Reserve Standards for Valuation of Disability Insurance Contracts › Section 2312.5 - Contract Reserves

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a)
				  General Rules
(1) Contract reserves are
				  required, unless otherwise specified in paragraph (a)(2) for:
(A) All individual and group contracts with
				  which level premiums are used; or
(B) All individual and group contracts with
				  respect to which, due to the gross premium pricing structure at issue, the
				  value of the future benefits at any time exceeds the value of any appropriate
				  future valuation net premiums at that time. This evaluation may be applied on a
				  rating block basis if the total premiums for the block were developed to
				  support the total risk assumed and expected expenses for the block each year,
				  and a qualified actuary certifies the premium development. The actuary should
				  state in the certification that premiums for the rating block were developed
				  such that each year's premium was intended to cover that year's costs without
				  any prefunding. If the premium is also intended to recover costs for any prior
				  years, the actuary should also disclose the reasons for and magnitude of such
				  recovery. The values specified in this paragraph shall be calculated based on
				  subsection §
												2312.5(b).
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 3 - Insurers › Article 3.5 - Minimum Reserve Standards for Valuation of Disability Insurance Contracts › Section 2313 - Reinsurance

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Increases to, or credits against, reserves carried, arising
					 because of reinsurance assumed or reinsurance ceded, shall be determined in a
					 manner consistent with these minimum reserve standards and with all applicable
					 provisions of the reinsurance contracts which affect the insurer's
					 liabilities.
1. New
					 section filed 11-4-94; operative 12-5-94 (Register 94, No.
					 44).
Note: Authority cited: Sections
						997(a)
						and
						10489.95,
						Insurance Code. Reference: Sections
						985,
						997 and
						10489.15(a),
						Insurance Code.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 3 - Insurers › Article 3.5 - Minimum Reserve Standards for Valuation of Disability Insurance Contracts › Section 2314 - Reserves for Waiver of Premium

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) Because the disability valuation tables
				  promulgated by the NAIC are based on exposures that include contracts on
				  premium waiver as in-force contracts, contract reserves based on these tables
				  are NOT reserves on "active lives" but rather reserves on contracts "in force."
				  This is true for the 1964 CDT and for both the 1985 CIDA and CIDB tables.
Accordingly, tabular reserves using any of these tables
					 shall value reserves on the following basis:
(1) Claim reserves shall include reserves for
				  premiums expected to be waived, valuing as a minimum the valuation net premium
				  being waived.
(2) Premium reserves
				  shall include contracts on premium waiver as in-force contracts, valuing as a
				  minimum the unearned modal valuation net premium being waived.
(3) Contract reserves shall include
				  recognition of the waiver of premium benefit in addition to other contract
				  benefits, valuing as a minimum the valuation net premium to be
				  waived.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 3 - Insurers › Article 4 - Experience and Reserves › Section 2318 - California Workers' Compensation Unit Statistical Plan

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
NOTE:
Pursuant to the provisions of Government
					 Code Section
					 11344,
					 this regulation is not printed in full herein. The complete regulation may be
					 examined at the offices of the Insurance Commissioner at Oakland, Los Angeles,
					 Sacramento, and San Diego; the Statistical Plan will be published and copies
					 will be made available to the public at nominal cost by the Workers'
					 Compensation Insurance Rating Bureau of California at its Oakland, California,
					 office.
1. Amendment
					 of Sections III, I, VI and Appendix filed 6-30-82; effective thirtieth day
					 thereafter (Register 82, No. 27). For prior history, see Register 81, No.
					 50.
2. Change without regulatory effect amending editorial NOTE
					 filed 8-27-2020 pursuant to section
					 100, title 1, California Code of
					 Regulations (Register 2020, No. 35).
Note: Authority cited: Sections
						11751.5,
						Insurance Code. Reference: Sections
						11740 and
						11751.5,
						Insurance Code.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 3 - Insurers › Article 4 - Experience and Reserves › Section 2318.6 - California Workers' Compensation Uniform Statistical Reporting Plan - 1995

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
EDITORIAL NOTE:
This regulation is not
					 printed in full herein. The complete regulation may be examined at the offices
					 of the Insurance Commissioner in Oakland, Los Angeles, Sacramento, and San
					 Diego. The complete regulation will be published and copies will be made
					 available to the public at nominal cost by the Workers' Compensation Insurance
					 Rating Bureau of California at its Oakland, California office.
Note: Authority cited: Section
						11751.5,
						Insurance Code. Reference: Sections
						11730 and
						11736,
						Insurance Code.
Pursuant to the provisions of Government Code section
						11344.6,
						this regulation is not printed in full herein. The complete regulation may be
						examined at the offices of the Insurance Commissioner in Oakland, Los Angeles,
						Sacramento, and San Diego. The complete regulation will be published and copies
						will be made available to the public at nominal cost by the Workers'
						Compensation Insurance Rating Bureau of California at its Oakland, California
						office.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 3 - Insurers › Article 4.5 - Loss and Loss Expense Reserves › Section 2319 - Authority

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
These regulations are promulgated pursuant to the authority
					 granted to the Commissioner under the provisions of Section
					 923.5 of
					 the Insurance Code. These regulations shall apply to each insurer transacting
					 business in this State but shall not apply to life insurance, disability
					 insurance, title insurance, mortgage insurance, or mortgage guaranty
					 insurance.
1. New
					 Article 4.5 (§
											2319,
					 2319.1-2319.4) filed 2-6-76;
					 effective thirtieth day thereafter (Register 76, No.
					 6).
Note: Authority cited: Section
						923.5,
						Insurance Code.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 3 - Insurers › Article 4.5 - Loss and Loss Expense Reserves › Section 2319.1 - Reserve Test Method

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a)
				  Every insurer shall immediately establish an effective method for testing the
				  adequacy of loss and loss expense reserves previously established and reported
				  in the annual statement.
(b) Such
				  method shall include provision for the estimation of the current adequacy
				  level.
(c) Such method must be
				  adequately describe and shall include a description of the insurer's claim
				  practices to the extent that they affect the data used in the reserve test
				  method. Such description shall include, among other things, the definition of a
				  late-reported claim, the definition of a reopened claim, changes in claim
				  practices, the procedures used to verify that the tabulation of outstanding
				  claims at a given date contains all of the files of open claims as of such
				  date, and other pertinent information. This description is to be continuously
				  updated and immediately available to the Commissioner on request.
(d) Such method shall provide a means of
				  testing as of June 30 the adequacy of each calendar year's reserves previously
				  established.
(e) The data must be
				  fully reconcilable to annual statement type data.
(f) If a material deficiency is indicated by
				  the reserve test method for the reserves as established, the insurer shall take
				  corrective action prior to the preparation of the next subsequent annual
				  statement.
(g) Such method shall
				  also separately estimate the deficiencies in the reserves for reported
				  claims.