reglab/statecodes huggingface dataset:
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 2 - The Insurance Securities Law (Insurance Code Sections 820-860) › Section 2602.06 - When Permit Required-Mergers

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
A. In case of a merger, an appropriate permit
				  should be and customarily is obtained
before
any of the
				  following are mailed in or into this state by the proposed issuer or anyone on
				  its behalf to its own or any other constituent's stockholders: proxy statement
				  or offering circular, proxy, fractional share buy and sell order form, letter
				  of tender of shares for surrender and exchange. The proxy statement is the
				  primary sales document and, as a practical matter, it is impossible to separate
				  the solicitation for votes respecting the merger from solicitation for exchange
				  of shares. (Sections
				  821.5,
				  822, and
				  827) Irrespective of the fact that
				  the entire transaction may be conducted by use of the United States mail
				  (interstate commerce), the foregoing rule represents the regular practice
				  before this department and should be followed in order to cope with factual
				  situations which may otherwise invalidate the issue of shares.
B. Where a merger will change the rights,
				  privileges or preferences of California stockholders, a domestic insurer shall,
				  and a foreign insurer ought to, procure an appropriate permit prior to
				  soliciting California stockholders of itself or of a proposed constituent
				  corporation to the merger. (Sections
				  821.5,
				  822, and
				  827). It is permissible for both
				  constituents to join in the one application under most circumstances.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 2 - The Insurance Securities Law (Insurance Code Sections 820-860) › Section 2602.07 - Effect of Sale Without Permit

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The law provides that issuance of a security by an insurer
					 without a permit in force at the time of issuance, under the circumstances such
					 that one is required, shall be void. Every security issued by an insurer under
					 the Commissioner's permit shall be void unless its provisions conform to the
					 provisions, if any, required by the permit. (Sec.
					 831)
Cf.
Reed
vs.
Norman
(1953) 41 Cal. 2d
					 17, 256 Pac. 2d 930;
Wells
vs.
Comstock
(1956) 46 Cal. 2d 528, 531, 297 Pac. 2d 961. An insurer is itself responsible
					 for making a correct determination of whether under the circumstances a permit
					 is required.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 2 - The Insurance Securities Law (Insurance Code Sections 820-860) › Section 2602.08 - Penalty for Unauthorized Sale by Insurer

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
For an insurer to sell or issue a security not in
					 conformity with the Commissioner's permit, or contrary to the Insurance
					 Securities Law, is a public offense and punishable by a fine not exceeding
					 $10,000. (Section
					 832)
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 2 - The Insurance Securities Law (Insurance Code Sections 820-860) › Section 2602.09 - Penalty for Unauthorized Sale by Individual

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Every person who knowingly authorizes, directs, aids,
					 causes or assists in causing the issue, execution or sale of any security in
					 nonconformity with a Commissioner's permit then in effect and authorizing such
					 issue, or contrary to the provision of the Insurance Securities Law, is guilty
					 of a public offense punishable by a fine not exceeding $5,000 or by
					 imprisonment in the state prison not exceeding five years or in a county jail
					 not exceeding one year, or by both such fine and imprisonment. (Section
					 833)
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 3 - Applications-in General › Section 2603.01 - Made by Whom

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Unless otherwise specified by statute or these regulations,
					 an application for an insurer securities permit shall be made as
					 follows:
A. Where an existing insurer,
				  as defined by paragraph C of Section
				  2601.02, supra, proposes to sell
				  and issue its securities, by the insurer entity.
B. For a preorganization permit, by the
				  individual or individuals seeking to organize the insurer.
C. For a subscription permit, by the
				  corporate entity which seeks to solicit subscriptions for its stock.
D. For a negotiating permit, by the insurer
				  which seeks directly or indirectly to solicit, offer, sell and issue or
				  exchange its securities. See also Section
				  2602.06 A, supra.
E. For a permit to solicit powers of attorney
				  and applications for policies of insurance to organize a reciprocal insurer
				  pursuant to Insurance Code Section
				  1511, by
				  its Attorney-in-Fact. (Section
				  1322)
F. For a permit authorizing a reciprocal
				  insurer to issue its securities, by the interinsurance exchange
				  itself.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 3 - Applications-in General › Section 2603.02 - Where Filed

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Subject to specific directives of the Commissioner or
					 assignment of companies for cause, the following will otherwise govern:
A. Admitted domestic insurers whose home
				  offices are south of the north border of San Luis Obispo, Kern and San
				  Bernardino Counties or in Mono or Inyo Counties shall apply through the
				  Commissioner's Los Angeles office; other admitted domestic insurers shall apply
				  through the Commissioner's Oakland office. Applications for securities permits
				  will not be accepted for filing at the Sacramento and San Diego
				  offices.
B. Nonadmitted domestic
				  applicants seeking organizational or similar permits shall file according to
				  the foregoing rule applied to where their principal California offices will be
				  when they are organized and admitted.
C. Admitted foreign insurers shall apply
				  through the appropriate filing office determined by applying the rule of
				  paragraph A above to their principal California base of operations, unless
				  activities of affiliates predominant in the group are centered in another part
				  of the state, in which event they shall file in the Commissioner's appropriate
				  office in such other part of the state.
D. Nonadmitted foreign insurers shall file in
				  the Oakland office unless they have an application for Certificate of Authority
				  pending in, or have previously applied for admission or a permit through, the
				  Los Angeles office, in which event they shall apply through that office.
				  (Section 843)
E. The Commissioner reserves the right to
				  transfer an application from one office to another for the convenience of the
				  Department or for cause.
1. Change
					 without regulatory effect amending paragraphs A. and D. filed 8-27-2020
					 pursuant to section
					 100, title 1, California Code of
					 Regulations (Register 2020, No. 35).
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 3 - Applications-in General › Section 2603.03 - Description of Physical Requirements

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
An application for an insurer securities permit shall be
					 typewritten in the English language on 8-1/2" x 13" paper. They shall be
					 substantially in the form prescribed by this Article.
Applications filed in the Los Angeles office shall be in
					 duplicate. Applications filed in the Oakland office may be in singular copy
					 only.
The ribbon copy shall be bond; the carbon copy shall be on
					 paper of a weight not less than 11 pounds per ream. Both copies shall be
					 stapled securely at the upper left and upper right corners. There shall be no
					 staple, rivet or other device in the upper central portion of the page which
					 will interfere with punching for clipping the application into a manila folder
					 with an Acco fastener. Use of an attorney's "legal back" or cover of heavy
					 paper is unnecessary and is discouraged except in the case of bulky
					 applications (more than 15 pages in length) that reasonably need a durable
					 binding.
An "application" within the meaning of these regulations
					 includes the formally entitled, captioned and duly verified typewritten
					 allegations and request (prayer) described in this Article, together with the
					 exhibits attached thereto or referred to and incorporated
					 therein.
1. Change
					 without regulatory effect amending second paragraph filed 8-27-2020 pursuant to
					 section 100, title 1, California Code of
					 Regulations (Register 2020, No. 35).
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 3 - Applications-in General › Section 2603.04 - Name and Address of Legal Counsel

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The office address of any legal counsel representing
					 applicant in the application matter shall plainly appear on the first page of
					 the application or on the letterhead of the letter transmitting it for
					 filing.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 3 - Applications-in General › Section 2603.05 - Substitution of Legal Counsel-Warrant of Authority

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
In the event of appearance of new legal counsel after the
					 filing of the initial application, authentic written authority from applicant
					 for the appearance or substitution, as the case may be, shall accompany the
					 first paper filed by the new or substituted attorney at law or shall be
					 presented at the new or substituted attorney's earliest appearance, whichever
					 shall first occur. Whenever it appears that two or more different attorneys at
					 law (exclusive of "House Counsel") or other attorneys, or firms of attorneys at
					 law are filing or have filed papers or originated correspondence on behalf of
					 an applicant, the Commissioner reserves the right to require a warrant of
					 authority from any or all of such attorneys before recognizing or responding to
					 such papers or correspondence.
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 3 - Applications-in General › Section 2603.06 - File Number

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Every application duly filed will be assigned a number in
					 the office where it is filed. Applicant will be notified of the file number
					 assigned and all subsequent correspondence relating thereto shall bear such
					 file number.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 3 - Applications-in General › Section 2603.07 - Caption

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Every application for an insurer securities permit shall be
					 captioned thusly:
BEFORE THE DEPARTMENT OF INSURANCE OF THE STATE OF
					 CALIFORNIA
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 3 - Applications-in General › Section 2603.08 - Entitlement

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Every application for an insurer securities permit shall be
					 appropriately entitled below the caption. An example of the most common
					 entitlement is:
BEFORE THE DEPARTMENT OF INSURANCE OF THE STATE OF
					 CALIFORNIA
In the Matter of the Application
							 of
)
ABC INSURANCE COMPANY
)
File
							 No. ___________________________
Sacramento,
							 California
)
Filed ___________________________
For a Permit to Offer and
							 Sell
)
Shares of its Capital
							 Stock.
)
APPLICATION FOR PERMIT
For additional examples refer to the composite sample forms
					 of applications in the addenda to these regulations.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 3 - Applications-in General › Section 2603.09 - Name or Label

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Every application for an insurer securities permit shall be
					 descriptively named or labeled so as to identify its nature, e.g.: "Application
					 for Preorganization Permit," "Application for Subscription Permit,"
					 "Application for Organizational Permit" (for initial sale of stock),
					 "Application for Negotiating Permit," and in all cases where a definitive
					 permit is sought, "Application for Permit." Such descriptive names or labels
					 shall be placed preferably opposite and to the right of the box containing the
					 entitlement, unless space does not permit. In such latter event the label may
					 be typed across the center of the page below the entitlement and file number
					 and above the opening paragraph of the body of the paper in capital
					 letters.
Applications filed subsequently to the original shall be
					 appropriately identified, e.g.: "First (Second, or Third, etc.) Supplemental
					 Application for Permit," "Application for Third Amendment to Permit," or "First
					 Supplement to Application for Third Amendment to Permit,"
					 etc.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 3 - Applications-in General › Section 2603.11 - Legal Style; Prayer

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
An application for an insurer securities permit shall
					 assume the form of a sound legal pleading; it shall allege the facts essential
					 to jurisdiction, the information required by the Insurance Code and these
					 regulations, and (except in the case of applications for preorganization,
					 subscription or certain negotiating permits) such additional facts and data as
					 are reasonably necessary to enable the Commissioner to make the findings
					 required by Section
					 839 and, when so requested by the
					 Commissioner, Section
					 839.1.
Each such application shall conclude with an appropriate
					 request that a permit issue, specifying what is sought to be authorized
					 thereby, the number and description of shares or other securities asked to be
					 authorized, the selling price thereof, and for what period of time the permit
					 is warranted, giving commencement and termination dates where feasible.
					 (Section 843)
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 3 - Applications-in General › Section 2603.14 - Financial Data-in General

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
A. Applications filed by insurance companies
				  with capital stock shall set forth both the number and par value of shares
				  outstanding and the amount of capital paid up as of the date of the
				  application. Both stock and mutual (including inter-insurance exchange)
				  applicants shall state their total assets, total liabilities exclusive of
				  capital, unassigned surplus and surplus as regards policyholders as of the most
				  recent financial reporting date. If there have been significant changes between
				  that date and the date of filing the application, the application shall include
				  applicant's best estimate of the amount of unassigned surplus as of the date of
				  such application.
B. Applications
				  filed by insurers other than insurance companies (i.e. by non-insuring
				  "insurers") shall show the most recent balance sheet and operating statement of
				  applicant that are available. If such papers are stale or unreliable, the
				  Commissioner may require current balance sheets and current operation
				  statements.
C. In the case of any
				  application lawfully filed (whether described in paragraph A or paragraph B
				  above), the Commissioner, after examining it and the other papers and documents
				  filed with it, may if the Commissioner deems it advisable, cause a detailed
				  examination, audit and investigation to be made of applicant and its affairs
				  (Section 838). Such examination, audit or
				  investigation shall be at the expense of applicant (Section
				  859(d)).
1. Change
					 without regulatory effect amending section heading and paragraph 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.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 3 - Applications-in General › Section 2603.15 - Company Information-in General

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The size, age and financial condition of insurers vary so
					 greatly, and the kinds of permits applied for are so different, it is
					 impracticable to prescribe regulations covering all situations. However, every
					 application should allege enough facts to show the nature and extent of
					 applicant's business, its present financial condition, whether a sale of the
					 company, or merger, consolidation, reorganization, change of management or
					 control or other major management or financial change is planned or pending,
					 and whether any large acquisition, sale, or cession is contemplated in the near
					 future. (Sects. 839, 843).
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 3 - Applications-in General › Section 2603.16 - Exhibits

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Exhibits shall be consecutively numbered or lettered.
					 Plainly legible numbering or lettering shall be placed consistently either in
					 the bottom center or at the lower right-hand corner of the face or first page
					 of each exhibit. If there are no more than three exhibits they need not be
					 separately tabbed. If there are four or more exhibits or, in any event, if the
					 application and exhibits exceed fifteen pages in length, exhibits shall be
					 labeled by index tabs affixed either to the right-hand margins or at the bottom
					 of the face pages in a consistent fashion so that the tabs will be visible when
					 the application is punched and affixed in a manila folder with an Acco
					 fastener.
Exhibits shall normally be arranged and attached to the
					 typewritten application so they can be opened and read without taking the file
					 apart. Bulky or cumbersome exhibits, such as quarterly or annual financial
					 statements, registration statements (with S.E.C.), underwriters' agreements and
					 ratebooks and other similar items, not easily capable of being fastened in a
					 manila folder with the typewritten application may remain
					 separate.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 3 - Applications-in General › Section 2603.17 - Findings Required by Statute

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Every application for a securities permit must show either
					 in the body of the application or by exhibits sufficient facts to enable the
					 Commissioner to make the findings required by Insurance Code Section
					 839, to
					 wit:
A. That the proposed plan of
				  business of the applicant and the proposed issuance of securities are fair,
				  just and equitable;
B. That
				  applicant intends fairly and honestly to transact its business; and
C. That the securities applicant proposes to
				  issue and the methods to be used by it in issuing or disposing of them are such
				  as, in the Commissioner's opinion, will not work a fraud upon the purchasers of
				  the securities or upon policyholders or other security holders of
				  applicant.
1. Change
					 without regulatory effect amending paragraph 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.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 3 - Applications-in General › Section 2603.18 - Optional Findings, Anti-Trust

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
"
				  (a) In any case where a domestic insurer is directly
				  affected by the total transaction for some part of which the permit applied for
				  is needed, and the Commissioner in the Commissioner's discretion determines
				  that reasonable grounds exist for contentions that such total transaction or
				  any part thereof:
(1) Is a combination of
				  capital, skill, or acts to create or carry out restrictions on or to prevent
				  competition in the insurance business; or
(2) Is a combination (in the form of a trust
				  or otherwise) in restraint of the insurance business; or
(3) Is an attempt to monopolize the insurance
				  business; or
(4) Is a conspiracy to
				  create any of the foregoing; or
(5)
				  That such total transaction, or any part thereof, if consummated will create or
				  result in any of the foregoing or will substantially lessen competition in the
				  insurance business;--
Then, in such event, the Insurance Commissioner may make
					 findings with respect to whether such total transaction, or any part thereof,
					 would or would not do or be any of the foregoing.
(b) In the event the Insurance Commissioner
				  makes affirmative findings as provided in subdivision (a) of this section, the
				  Insurance Commissioner may deny the permit applied for." (Section
				  839.1)
1. Change
					 without regulatory effect amending subsections (a) and (b) 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 3 - Applications-in General › Section 2603.20 - Grounds for Denial

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
If an application that otherwise complies with the law and
					 these regulations is insufficient to enable the Commissioner to make the
					 findings required by Insurance Code Section
					 839 and, if
					 in the Commissioner's discretion the Commissioner so determines and requires,
					 the findings (affirmative or negative) authorized by Section
					 839.1 ibid., the Commissioner will
					 notify applicant in writing of the Commissioner's objections. If they are not
					 cured by supplement or amendment within a reasonable time, the Commissioner
					 will deny the application and notify applicant in writing of the Commissioner's
					 decision. (Sections
					 839,
					 839.1)
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 3 - Applications-in General › Section 2603.21 - Denial for Laches

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Applications will not be allowed to pend indefinitely or
					 for an unreasonable length of time. An application will also be subject to
					 denial if it reasonably appears that applicant is not actively correcting
					 reported defects and remedying reported deficiencies in good faith, or that it
					 will be impossible for applicant within a reasonable time to comply with the
					 Commissioner's appropriate lawful requirements. (Section
					 843)
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 4 - Preorganization, Subscription and Negotiating Permits › Section 2604.01 - Prepermit Activities

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Prior to issuance of an appropriate permit promoters may
					 not lawfully do anything in this state which produces an agreement, express or
					 implied, to buy an identified security.
People
vs.
Jacques
(1955) 138 Cal. App. 2d 823, 291 Pac. 2d. 124;
Ogier
vs.
Pacific Oil and Gas Development
					 Corporation
(1955) 138 Cal. App. 2d 775, 779, 288 Pac. 2d 101. But a
					 business conversation preliminary to any fixed plan is not prohibited.
B. C. Turf and Country Club
vs.
Daugherty
(1949), 94 Cal. App. 2d 320, 210 Pac. 2d 760. The promoters themselves and
					 their legal counsel are responsible for determining how far they may go in the
					 talking stage without a permit. Refer to Sections
					 2602.01 to and including 2602.08,
					 supra, and the statutes and decisions cited; also to any subsequent controlling
					 decisions.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 4 - Preorganization, Subscription and Negotiating Permits › Section 2604.02 - Applications for Preorganization Permits

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
NOTE:
Applicants most commonly apply directly
					 for a definitive permit without any intervening formal steps or preliminary
					 permits. The sections herein provided relative to preorganization and
					 subscription permits are only designed to accommodate the limited situations
					 described therein. Definitive permits regularly authorize the taking of
					 subscriptions.
A. Except as may
				  otherwise be specifically provided by law, when individuals in the course of
				  organizing a proposed insurer expect to engage in solicitation or obtain
				  commitments which cannot lawfully be done without an appropriate permit, but
				  will not take subscriptions for the purchase of securities, they should apply
				  for a preorganization permit.
B.
				  The fee for filing an application for a preorganization permit is $37.50
				  (Section 859(a)). Formal
				  requirements, such as verification, number of copies, filing office, etc., are
				  governed by Article 3 of these regulations.
C. Such an application shall set forth:
1. The names and addresses of the proposed
				  organizers. It shall also incorporate by reference biographical affidavits on a
				  form prescribed and furnished by the Commissioner, one of which shall be
				  completed and sworn to by each organizer. The form of biographical affidavit is
				  found in Section
				  2613.07, infra. (Sections
				  704.5,
				  717,
				  718,
				  843)
2. The names and addresses of all persons
				  then known who are expected to be associated as officers, directors, or as key
				  managerial personnel.
3. The kind
				  of insurer to be organized, the nature of the business to be done and
				  where.
4. The reason why such an
				  insurer is proposed to be organized; any particular advantage it would enjoy;
				  why, in the opinion of the promoters, it should succeed.
5. The capital structure of the proposed
				  insurer, the par value (if any; see Section
				  690 for insurance companies) and
				  the selling price of its shares, the number of shares proposed to be sold, by
				  whom, where and how they are proposed to be sold and the commission to be paid
				  or allowed thereon, the amounts of capital paid up and of unassigned surplus
				  (if applicable) with which it is proposed to start business; also, the
				  estimated expenses of organization and promotion.
6. The names and qualifications or, if it is
				  not possible to identify them, a description by class of the persons to be
				  solicited, the purpose of such solicitation, and the proposed dates of
				  commencement and conclusion thereof.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 4 - Preorganization, Subscription and Negotiating Permits › Section 2604.04 - Applications for Negotiating Permits

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
NOTE:
The presence in these regulations of
					 this and the following section in this article does not mean that a negotiating
					 permit is a necessary precedent to a definitive permit. A definitive permit may
					 always and quite often does authorize negotiations. Where applicant is
					 confident its "negotiations" will succeed, it customarily skips the negotiating
					 permit stage and applies directly for a definitive permit. These sections
					 represent the present practice and, in accordance with the Code, only provide
					 for an intermediate step where applicant is not ready to proceed on the
					 ultimate definitive permit basis.
Except as may otherwise be provided by law or these
					 regulations, under the appropriate circumstances applications for negotiating
					 permits may properly be filed by authorized insurers, admitted or nonadmitted.
					 If an application seeks authorization to solicit or "negotiate" for acceptance
					 of a proposal whose terms, conditions, value and consideration are already
					 fixed and no substantial part of which is to be arrived at through bargaining,
					 then such application must make the showing needed upon which to base findings
					 required by Insurance Code Section
					 839 and, if
					 the Commissioner requires, authorized by Section
					 839.1 ibid. Otherwise, if the
					 application shows that the terms and conditions of the proposal sought to be
					 negotiated, or the value or consideration to be paid are still to be agreed
					 upon through genuine bargaining, then such application need not show the basis
					 for findings under said Sections
					 839 and
					 839.1. In the latter event a
					 permit issued in response to such an application will make no findings under
					 said sections and will authorize negotiations only.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 4 - Preorganization, Subscription and Negotiating Permits › Section 2604.05 - Application Not to be Ambiguous

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
An application of the type described in the sections
					 immediately preceding and following this section shall be for a negotiating
					 permit or for a definitive permit but not for both unless the appropriate
					 filing fee for a definitive permit is paid. If it requests two permits, a
					 negotiating and a definitive permit, then the appropriate filing fees for both
					 shall be paid when the application is filed. If it cannot be told from the
					 application itself what kind of a permit is wanted, no permit will issue. The
					 Commissioner will endeavor to reject ambiguous applications in advance of
					 filing. (Section
					 843)
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 4 - Preorganization, Subscription and Negotiating Permits › Section 2604.06 - When Negotiating Permits Are Appropriate

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Negotiating permits are appropriate under the following
					 circumstances:
A. Applicant desires to
				  approach the governing body of another entity concerning a proposal which, if
				  duly adopted by the parties, will require the commissioner's (definitive)
				  permit in order lawfully to effectuate the same.
B. Applicant has in another state reached an
				  agreement or tentative agreement with the governing body of another entity as
				  to the terms of such a proposal and desires to present the same to California
				  stockholders by mail, or otherwise, for their votes thereon.
C. Applicant for any legitimate reason needs
				  to negotiate concerning the terms and conditions of a proposal the consummation
				  of which, if agreed upon, will require a definitive permit; or needs to submit
				  a definitive proposal to a vote of stockholders or members preliminary to the
				  action for which a definitive permit will be needed.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 4 - Preorganization, Subscription and Negotiating Permits › Section 2604.07 - Regulations Governing Applications for Negotiating Permits

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Except where herein otherwise noted, applications for
					 negotiating permits are governed by the same statutes and regulations as are
					 other applications. Applications for negotiating permits shall comply with the
					 applicable portions of the following sections hereof: 2603.01 to and including
					 2603.16. The application shall describe the matters to be negotiated and attach
					 a copy of the plan of reorganization, agreement of merger, or other proposal,
					 and copies of all solicitation material to be used in this state. The filing
					 fee is $25.00. See Insurance Code Section
					 859.
					 (Sections 827.7,
					 834,
					 835,
					 836,
					 837,
					 843)
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 5 - Organizational and Other Definitive Permits › Section 2605.02 - Amount of Proof Required

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
A. In the case of domestic applicants being
				  organized for the purpose of assuming the risk of loss under contracts of
				  insurance, the quantum of proof customarily needed pursuant to Insurance Code
				  Section
				  839 must be
				  sufficient to satisfy the commissioner of at least the following with respect
				  to applicant:
1. That it has a practicable,
				  workable organization and plan of operation with honest, experienced, competent
				  persons in charge;
2. That it has
				  actuarial sound policies to sell at merchantable rates;
3. That it will employ lawful sales
				  methods;
4. That its underwriting
				  and rating will be lawful and practicable;
5. That its reinsurance arrangements are
				  provident and lawful;
6. That it
				  has access to or can develop sufficient premium income to survive;
7. That it will promptly and fairly adjust
				  claims by its policyholders and will fully pay such claims in accordance with
				  law and the terms of the policies;
8. That its investments will be lawfully made
				  and skillfully managed;
9. That its
				  operations and business ought to produce a fair profit within a reasonable
				  period; and
10. That its plan of
				  financing and stock selling will produce enough funds so that applicant can and
				  will maintain statutory financial requirements and avoid a hazardous condition
				  until earned premium income plus investment income exceeds all expenditures.
				  (Sections 717,
				  839,
				  843)
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 5 - Organizational and Other Definitive Permits › Section 2605.03 - Special Provisions for Certain Nonorganizational Permits

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
A. Already
				  organized and licensed applicants, domestic or foreign, whose operations and
				  management have not consistently proven financially successful will be required
				  to substantiate their applications with such of the items listed in paragraphs
				  (Omit D. and F. for noninsuring "insurers.") B., C., D., D., E., F., G., and H.
				  of Section
				  2605.01 above as are appropriate
				  and necessary to induce the findings needed pursuant to Insurance Code Section
				  839. Such
				  applicants are commonly requested to furnish the following additional verified
				  information in their applications:
1. When
				  applicant was last examined by its own state regulator authority or by N.A.I.C.
				  Zone Examiners.
2. Whether
				  applicant is presently engaged in a controversy with any state or federal
				  regulatory agency. (Application for admission is not deemed a
				  "controversy.")
3. Whether
				  applicant has within five (5) calendar years last preceding the filing of the
				  instant application been:
(a) denied a
				  certificate of authority or a license to transact insurance or has withdrawn an
				  application therefor in any jurisdiction;
(b) denied authorization to sell its
				  securities; or
(c) ordered to cease
				  and desist from selling its securities in any jurisdiction. If the answer to
				  any of the questions in this paragraph is affirmative, state the
				  circumstances.
4. A list
				  of pending lawsuits including those arising under its policies of insurance
				  (other than liability, surety, workmen's compensation policies and subrogation
				  suits) against the applicant, together with an estimate of the probable outcome
				  and liability under each. (Sections
				  839,
				  843)
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 5 - Organizational and Other Definitive Permits › Section 2605.04 - Applications by Noninsuring Organizations

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Applications for permits by underwritten title companies,
					 attorneys-in-fact for reciprocal or interinsurance exchanges, or exclusive
					 managers of domestic insurers, or by any organization formed for the purpose of
					 acting as any of the foregoing, shall be subject to and shall comply with
					 Article 3 of these regulations, supra. They shall also be required to furnish
					 such additional data, information and documents as the Commissioner may
					 reasonably deem necessary in order to make possible affirmative or negative
					 findings on the matters essential to issuance of the permit applied
					 for.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 5 - Organizational and Other Definitive Permits › Section 2605.05 - Applications by Established Insurers

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
A. In the case of insurance company
				  applicants who have the following qualifications, their applications and
				  exhibits may be simplified to the extent hereinafter permitted. The
				  qualifications for such an applicant are that (Section
				  843):
1. It has, prior to filing the application,
				  made a registration filing with the Securities and Exchange Commission for a
				  public offering of securities and a copy of its latest complete filing is
				  attached to and incorporated by reference in the application.
2. It (or a predecessor by merger, sale and
				  purchase transformation or other reorganization, provided that at least 50% of
				  the gross business in force and at least 50% of the management--including total
				  number of officers and directors--of applicant are in such case each comprised
				  in excess of 50% of the business and management of the merged, purchased,
				  transformed or reorganized predecessor) has been lawfully engaged in the
				  insurance business for at least five years and currently is admitted to
				  transact insurance in at least five states;
3. It currently has admitted assets of at
				  least five million ($5,000,000) dollars; and
4. It has, prior to filing the application,
				  obtained a written permit or consent to issue such securities from the
				  authority in its domiciliary state having jurisdiction over issuance of its
				  securities, and the statutory standards for obtaining such a permit or consent
				  are comparable to the like standards of this state. The statutes of another
				  state are not deemed "comparable" within the meaning of this subparagraph 4
				  unless they include requirements substantially like Insurance Code Section
				  839 (the
				  "fair, just and equitable" section). See Section
				  2603.17, supra. (Section
				  843)
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 5 - Organizational and Other Definitive Permits › Section 2605.06 - Applications by Large Established Insurers

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
A. In the case of those insurers who have any
				  four of the following five qualifications, their applications may be simplified
				  to the extent hereinafter permitted. Insofar as in the Commissioner's
				  discretion may prove feasible, permits issued to such insurers will be
				  abbreviated or simplified. The qualifications for such an insurer are that:
1. It (or a predecessor by merger,
				  consolidation, sale and purchase, transformation or other reorganization,
				  provided that at least 50% of the gross business in force and at least 50% of
				  the management -counting the total number of officers and directors -of
				  applicant are in such case each comprised in excess of 50% of the business and
				  management of the merged, purchased, transformed or reorganized predecessor)
				  has been continuously engaged in the insurance business for not less than 40
				  years.
2. It is, according to its
				  latest annual statement on file with the Commissioner, admitted to do business
				  in not less than 40 states of the United States of America.
3. It has, according to its latest annual
				  statement on file with the Commissioner, a surplus as regards policyholders of
				  not less than $50,000,000.
4. As
				  part of the same transaction for which a permit is sought from the
				  Commissioner, it has on file a current Registration Statement with the
				  Securities and Exchange Commission for a public offering of securities; and
				  applicant has made a registration of its shares effective with the Securities
				  and Exchange Commission for such purpose on at least two prior occasions within
				  the ten calendar years last preceding the current application to the
				  Commissioner.
5. Trading in and
				  market prices of its stock are regularly listed in at least one newspaper with
				  nationwide circulation.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 6 - Impounding of Stock Sale Proceeds › Section 2606.01 - When Required

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Permits issued to domestic applicants prior to a
					 certificate of authority will normally require 100% of all stock sale proceeds
					 to be impounded until release upon written order of the Commissioner. The same
					 shall be required of the proceeds of stock sales in California by foreign
					 applicants under similar circumstances. If applicant does not qualify for a
					 certificate of authority within a reasonable time, subscription moneys will be
					 returned in full to the subscribers without deduction of expenses. Extensions
					 beyond such time will not be granted without the consent of all subscribers.
					 The form of subscription agreement shall recite all of the foregoing. (A
					 composite example of a subscription agreement is found in Section
					 2613.06, infra.)
A "reasonable time" as used in this section is ordinarily
					 considered one year from the date the definitive permit is issued.
Impounding of funds may be dispensed with in cases of
					 closed permits where applicant can demonstrate to the Commissioner's
					 satisfaction that the protection of an impound to guarantee full return of
					 stock purchase moneys in event no certificate of authority is granted is
					 unnecessary. (Section
					 843)
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 6 - Impounding of Stock Sale Proceeds › Section 2606.02 - Impound Agent

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Applications for permits which will entail impoundment of
					 stock sale proceeds shall name a duly authorized federal or state bank within
					 the state which has consented to act as impound agent. An originally signed
					 letter of consent by the bank shall be attached to the application. (Section
					 843)
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 6 - Impounding of Stock Sale Proceeds › Section 2606.03 - Certificate of NO Lien

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Before an order is made releasing stock sales proceeds from
					 impoundment, written assurance in letter form will be requested from the bank
					 serving as impound agent that it has no lien, general, special, bankers, or
					 otherwise, against said funds or any thereof, and knows of no claims asserted
					 against funds or any thereof. (Section
					 843)
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 7 - Promoters › Section 2607.01 - Promotional Stock Not Allowed

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Various statutory provisions relating to paid-in capital,
					 investments, insolvency and paid-up or unassigned surplus applicable to
					 insurance companies (see especially Section
					 700.02(b)) render
					 purely promotional securities difficult and impracticable. They were
					 uniformally disapproved pursuant to Section
					 839. Fair, just, and equitable
					 stock option plans for promoters, officers and employees are presently not
					 regarded with disfavor.
California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 7 - Promoters › Section 2607.02 - Sales to Promoters

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
In the event of a public offering, no securities will be
					 authorized for promoters at less than the net public offering
					 price.