Title INS — California Ins. Code

The power of attorney and contracts made thereunder may: (a) Provide for the right of substitution of attorney and revocation of the contract or power. (b) Impose such restrictions upon the exercise of the power as are agreed upon by the subscribers. (c) Provide for and limit the…

The body exercising the subscribers’ rights shall be selected under such rules as the subscribers adopt. It shall supervise the finances of the exchange and shall supervise its operations to such extent as to assure conformity with the subscriber’s agreement and power of attorney…

Such body shall have authority to procure the audit of the accounts and records of the exchange and of the attorney-in-fact, at the expense of the exchange. (Enacted by Stats. 1935, Ch. 145.)

Such body shall be composed of subscribers or agents of subscribers. Not more than one-third of the members serving on such body shall be agents, employees or shareholders of the attorney. (Enacted by Stats. 1935, Ch. 145.)

The board of a reciprocal or interinsurance exchange operating pursuant to Section 1284 shall be composed of members of the governing board of the hospital, the participating members of its attending medical staff, and health care consumers.

A reciprocal or interinsurance exchange may engage in the surety insurance business in this state only provided its surplus is at least twice the amount required as paid-in capital of an incorporated insurer writing the same classes of insurance by the provisions of Section 700.0…

(a) Any reciprocal or interinsurance exchange, domestic or foreign, which has obtained a certificate of capability to reinsure or a favorable order under Section 1401.5 and whose subscribers by such order have no liability for assessment, may accept reinsurance of risks for all c…

Nothing in Chapter 504 of the Statutes of 1965 shall limit or affect the right of an admitted foreign reciprocal or interinsurance exchange to accept reinsurance.

Any reciprocal or interinsurance exchange, domestic or foreign, which has obtained a certificate of surplus under Section 1401, and whose subscribers by such order have no liability for assessment, may issue a policy of insurance required under Article 4 (commencing with Section …

A reciprocal exchange or interinsurance exchange may borrow money to defray the expenses of its organization, provide it with surplus funds, or for any purpose of its business, upon a written agreement that the money is required to be repaid only out of the exchange’s surplus in …

The attorney of every admitted reciprocal or interinsurance exchange shall verify and cause to be filed with the commissioner copies of the following forms used by the exchange: (a) The form of every amendment to, revision of, or substitution for the power of attorney in use at t…

If the name of the exchange does not contain either the words “interinsurance,” “reciprocal” or “exchange,” then such forms shall have printed under such name the words “an interinsurance exchange” in a prominent place on each of such forms. (Enacted by Stats. 1935, Ch. 145.)

The attorney prior to admission shall file with the commissioner a declaration verified by his oath or, where such attorney is a corporation, by the oath of its duly authorized officers. Such declaration shall set forth or have annexed thereto: (a) The name of the attorney and th…

Concurrently with the filing of the declaration provided for by the terms of section 1322 the attorney shall file with the commissioner an instrument in writing executed by him, providing that after the issuance of the certificate of authority actions against the exchange may be …

Except as provided in Section 1330, the attorney, concurrently with the filing of the declaration provided for in Section 1322, also shall file with the commissioner a bond, approved by the commissioner, in favor of the people of the State of California.

Such bond shall be executed by the attorney with an admitted surety insurer as surety.

Such attorney may deposit with the commissioner, in lieu of the bond executed by him, securities of a value equal to the required amount of the bond and of the kinds set forth in sections 1170 and 1240. Such deposit shall be subject to the provisions of Article 11, Chapter 1, Par…

The attorney’s bond shall be in the penal sum of fifty thousand dollars ($50,000), conditioned that the attorney will faithfully account for all moneys and other property which come into his or her hands or are handled by him or her under the terms of the power of attorney and th…

The attorney’s bond may be sued upon in one and the same action either by any subscriber or any number of subscribers suffering loss through a violation of its conditions or by the receiver or trustee in liquidation of the exchange. Liability thereunder may be enforced by any one…

Any amount recovered on the attorney’s bond shall be deposited in and become a part of the funds of the exchange. (Enacted by Stats. 1935, Ch. 145.)

Where provision is made, by the power of attorney executed by the subscribers or the rules adopted by the exchange, for the bonding of the attorney-in-fact against fraud and dishonesty with a bond executed as prescribed in Section 1325 and conditioned as provided by this chapter …

Where the home office of an exchange is located outside of this State and the attorney files such a bond in the home State, there may be filed with the commissioner, in lieu of such bond, either a certified copy or duplicate thereof or an affidavit from the insurance authority of…

The commissioner shall issue a certificate of authority to the attorney upon compliance with the requirements of this chapter, and the payment of the application fee prescribed by Article 3 (commencing with Section 699) of Chapter 1 of Part 2 of Division 1. The certificate shall …

In the event of substitution of attorney or a change in any of the matters specified in the certificate of authority pursuant to Section 1350, the attorney shall apply to the commissioner for an amended certificate of authority.

Every exchange shall maintain its required assets in any one, or more, or all of the following forms: (a) In cash or deposits in solvent banks. (b) Invested in securities of the kind designated for the investment of assets of incorporated insurers having a capital stock by the la…

Except as in this article (commencing with Section 1370) otherwise provides, every exchange subject to this chapter (commencing with Section 1280) shall on and after October 1, 1961, be governed for all purposes as to required minimum surplus, (including that for admission, amend…

An exchange admitted prior to October 1, 1961, shall be exempt from the provisions of Section 1370.2 until it replaces its attorney in fact, except when the replacement is in strict compliance with a contract between the exchange and its current attorney in fact entered into prio…

Any exchange exempted at any time from the provisions of Section 1370. 2 shall irrespective of such exemption be subject to the provisions of this section. No amended certificate of authority adding classes of insurance shall be issued to the attorney in fact of any such exchange…

If an exchange does either liability or workers’ compensation insurance, it shall at all times maintain assets in a sum sufficient to discharge all liabilities and to provide a surplus over all liabilities of one hundred thousand dollars ($100,000). An exchange subject to the pro…

Every other exchange shall maintain at all times assets in a sum sufficient to discharge all liabilities and to provide a surplus over all liabilities of fifty thousand dollars ($50,000). An exchange subject to the provisions of this section is also subject to the provisions of S…

No certificate of authority, other than a renewal certificate of authority, shall be issued to the attorney within three years from and after the time when the exchange commences business as an insurer nor within three years from and after the time it is first organized unless as…

(a) Except as provided in subsection (b) hereof, an exchange, the attorney for which holds a certificate of authority, which has been in business as an insurer less than three years from and after the time when it commenced business as an insurer shall maintain its assets during …

In estimating the financial condition of any exchange the commissioner shall observe the following rules: (a) He or she shall charge as liabilities the same reserves as are required of incorporated insurers issuing nonassessable policies on a reserve basis. (b) Surplus deposits o…

(a) “Surplus deposits of subscribers,” as used in this chapter, means amounts, over and above any premium charges, which are contributed by subscribers and which are used for the purpose of funding the surplus of a reciprocal or interinsurance exchange. No subscriber shall have a…

Where the subscribers are grouped by industries or otherwise under any ruling or agreement which exempts the funds of one group from liability in whole or in part for the payment of losses or expenses chargeable against another group, each such independent group shall maintain th…

The provisions of this article shall apply only to exchanges writing liability, common carrier liability, or workers’ compensation insurance, except that any exchange may apply for and receive the certificate provided for by Section 1401.

Whenever an exchange subject to this article, is not possessed of admitted assets sufficient to discharge all liabilities and to maintain the required surplus, the attorney may make an assessment for the amount, subject to the limits provided by this article, needed to make up th…

Except as provided by Sections 1397, 1398, 1400 and 1401, every subscriber of an exchange subject to this article shall be liable to pay, and shall pay, his proportionate part of any such assessment, in accordance with law and his contract covering any such deficiency assessment …

Each such subscriber’s share of the deficiency for which an assessment is made pursuant to this article, shall be determined by applying to the premium earned on the member’s policy or policies during the period to be covered by the assessment, the ratio of the total deficiency t…

Subscribers liable to assessment under this article shall pay the same without offsetting any claim for unearned premiums or losses payable to or for the account of the subscriber. (Enacted by Stats. 1935, Ch. 145.)

Assessments under this article shall be made upon the members liable to assessment therefor, in proportion to their several liabilities. (Enacted by Stats. 1935, Ch. 145.)

Notice of all such proposed assessments shall be filed with the commissioner and the assessments shall not take effect until approved by him after such investigation as he deems necessary. (Enacted by Stats. 1935, Ch. 145.)

Assessments under this article, whether levied by the attorney, or the commissioner in the liquidation of such an exchange or otherwise, shall be of no greater amount than specified in the power of attorney. (Enacted by Stats. 1935, Ch. 145.)

The power of attorney of an exchange subject to this article may limit the contingent liability of the subscriber for assessment, but such contingent liability shall not be less than an amount equal to and in addition to the amount of the premium deposit provided in the policy. (…

Each subscriber to an exchange subject to this article may maintain with the exchange, in addition to the premium deposit provided in the policy, a further deposit to be held as the surplus deposit of such subscriber.

Each such subscriber maintaining a surplus deposit equal to, and in addition to, the amount of the total current annual premium deposit provided in his policy, shall have no liability for assessment during the period such surplus deposit is so maintained. (Enacted by Stats. 1935,…

If an exchange has a surplus of admitted assets over all liabilities in a sum equal to 11/2 times the minimum paid-in capital required of incorporated insurers issuing policies on a reserve basis and doing the same classes of insurance, then the Insurance Commissioner, upon writt…

(a) When the commissioner finds after a public hearing that a reciprocal or interinsurance exchange has at all times during any consecutive five-year period terminating on December 31, 1964, or on the last day of any subsequent calendar year, as shown by its annual statements, as…

All funds of such exchange and the proceeds of the contingent liability of its subscribers shall be available for the payment of any liability of the exchange. (Enacted by Stats. 1935, Ch. 145.)

Savings or credits may be returned to the subscribers irrespective of the source from which such savings or credits accrue whenever such returns do not constitute an impairment of the assets or reserves required to be maintained.