Title INS — California Ins. Code

(a) In addition to the contingency reserve, the case basis method or other method as may be prescribed by the commissioner shall be used to determine loss reserves, which shall include a reserve for claims reported and unpaid net of collateral. A deduction from loss reserves shal…

An unearned premium reserve shall be established and maintained net of reinsurance and collateral with respect to all financial guaranty premiums. Where financial guaranty insurance premiums are paid on an installment basis, an unearned premium reserve shall be established and ma…

An admitted financial guaranty insurance corporation shall adopt procedures reasonably calculated to ensure, to the extent it is commercially feasible for the financial guaranty insurance corporation, that any prospectus which discloses that a policy of financial guaranty insuran…

(a) Except as provided in Section 12118, financial guaranty insurance may be transacted in this state only by an insurer admitted to transact financial guaranty insurance. (b) The following guaranties are permissible: (1) Financial guaranty insurance shall be written only to insu…

An admitted financial guaranty insurance corporation shall keep copies of all relevant materials prepared by the insurer or used in the initial underwriting or ongoing monitoring of insured risk; all relevant documents pertaining to changes in the credit risk or performance of th…

(a) An insurer may insure obligations enumerated in subparagraphs (A), (B), and (C) of paragraph (1) of subdivision (b) of Section 12112 that are not investment grade so long as at least 95 percent of the insurer’s total net liability on the kinds of obligations enumerated in tho…

A financial guaranty insurance corporation admitted to transact financial guaranty insurance in this state shall limit its exposure to loss, net of collateral and reinsurance, as follows: (a) For municipal obligation bonds and special revenue bonds: (1) The insured average annual…

(a) If an admitted financial guaranty insurance corporation fails to maintain a rating in any of the top three generic rating classifications by any securities rating agency acceptable to the commissioner, it shall immediately send written notification of this failure to both the…

(a) If an admitted financial guaranty insurance corporation at any time exceeds any limitation prescribed by subdivision (a) or (b) of Section 12114 or Section 12115, the corporation shall immediately notify the commissioner in writing. Upon receipt of the written notification, o…

(a) The commissioner may, for good cause, implement by regulation, order, or written consent, reasonable conditions or limitations under which any or all admitted financial guaranty insurance corporations may insure the type of business described in paragraph (2) of subdivision (…

A financial guaranty insurance corporation shall not be deemed in violation of any limitation prescribed by Section 12115 with respect to any financial guaranty insurance outstanding prior to January 1, 1991, if the financial guaranty insurance corporation was in compliance with …

An admitted insurer transacting financial guaranty insurance in this state but which is not admitted to transact, financial guaranty insurance in this state shall be subject to all the provisions of this article and: (a) May continue to write financial guaranties of the type auth…

Policy forms and any amendments thereto shall be filed with the commissioner within 30 days after their use in this state by the financial guaranty insurance corporation. (a) (1) Every policy shall provide that, in the event of a payment default or insolvency of the obligor, ther…

An admitted financial guaranty insurance corporation with respect to financial guaranty insurance rates, shall not be subject to Sections 1861.01 and 1861.05, except that financial guaranty insurance rates shall not be excessive, inadequate, or unfairly discriminatory or otherwis…

(a) For financial guaranty insurance that takes effect on or after January 1, 1991, an insurer authorized to transact financial guaranty insurance shall receive credit for reinsurance as an asset or as a reduction from liabilities only if the reinsurance is placed with a reinsure…

No insurer authorized to transact financial guaranty insurance shall pay any commission to or make any gift of money, property, or other valuable thing to any employee, agent, or representative of any issuer of any debt instrument or other monetary obligation of any kind which ma…

The definitions set forth in this article shall govern the construction of the terms used in this chapter, but shall not affect any other provisions of this code.

“Title insurance” means insuring, guaranteeing or indemnifying owners of real or personal property or the holders of liens or encumbrances thereon or others interested therein against loss or damage suffered by reason of: (a) Liens or encumbrances on, or defects in the title to s…

“Abstract of title” is a written representation, provided pursuant to a contract, whether written or oral, intended to be relied upon by the person who has contracted for the receipt of such representation, listing all recorded conveyances, instruments or documents which, under t…

“Preliminary report”, “commitment”, or “binder” are reports furnished in connection with an application for title insurance and are offers to issue a title policy subject to the stated exceptions set forth in the reports and such other matters as may be incorporated by reference …

“Business location” means a facility or other place of business in this state where an underwritten title company or controlled escrow company engages in the business of conducting escrow services.

“Title policy” means any written instrument or contract by means of which title insurance liability is assumed.

“Business of title insurance” includes: (a) Issuing or proposing to issue any title policy as insurer, guarantor, or indemnitor; (b) Transacting or proposing to transact any phase of title insurance, including solicitation, negotiation preliminary to execution, or execution of a …

“Title insurer” means any company issuing title policies as insurer, guarantor or indemnitor. “Domestic title insurer” means any title insurer organized under the laws of this state. “Foreign title insurer” means any title insurer organized under the laws of any other jurisdictio…

“Underwritten title company” means any corporation engaged in the business of preparing title searches, title examinations, title reports, certificates or abstracts of title upon the basis of which a title insurer writes title policies.

(a) “Controlled escrow company” means any person, other than a title insurer or underwritten title company, whose principal business is the handling of escrows of real property transactions in connection with which title policies are issued, which person, if an artificial person,…

Except as provided in Section 12401.8, and excluding miscellaneous charges, “rate” or “rates” means the charge or charges, whether denominated premium or otherwise, made to the public by a title insurer, an underwritten title company or a controlled escrow company, for all servic…

“Advisory organization” means every person or entity (other than a title insurer, underwritten title company, or controlled escrow company) which recommends or prepares policy forms or endorsements, or procedural manuals (but not including the making of rates, rating plans, or ra…

“Willful” or “willfully” in relation to an act or omission which constitutes a violation of this chapter means with actual knowledge or belief that such act or omission constitutes such violation and with specific intent to commit such violation.

For purposes of this chapter, “holders of liens or encumbrances” includes, but is not limited to, the institutional third parties described in Sections 1452 and 1717 of Title 12 of the United States Code.

Every title insurer, before issuing any policy, shall deposit $100,000 with the Insurance Commissioner or other designated official of its home State as a “guarantee fund” for the security and protection of the holders of, or beneficiaries under, its title policies.

Any such deposit may be made either in lawful money of the United States or in any of the securities, other than collateral trust bonds or notes, authorized for investment, other than excess funds investments, of all the assets of domestic incorporated insurers. (Enacted by Stats…

If the deposit is made in this state, it shall first be approved by the commissioner who shall make a special deposit thereof in the State Treasury, for the purpose specified in Section 12350. The Treasurer shall give his or her receipt therefor, to the commissioner.

Except as provided in section 12355, assets in such deposits in this State may, with the approval of the commissioner, be withdrawn or exchanged from time to time for other assets of like character and value.

As long as the depositing insurer continues solvent, it shall receive the interest and dividends on any assets in the deposit. (Enacted by Stats. 1935, Ch. 145.)

Except on withdrawal of the insurer from this State, or substitution pursuant to section 12353, assets in the deposit in this State shall be subject to final sale, transfer, and disposal of the proceeds thereof by the commissioner only on the order of a court of competent jurisdi…

When any part of the assets to be deposited in this State consists of mortgage-secured notes or bonds, or loans upon real property secured by mortgage, such mortgages shall be accompanied by a policy of mortgage insurance issued under the provisions of this code, or by evidence o…

Unless the mortgage is covered by mortgage insurance, the value of the property covered by each such mortgage constituting all or part of such deposit in this State shall be appraised by one or more appraisers selected or approved by the commissioner. The appraisers shall be fami…

The reasonable cost of examining such evidence of title and of making such appraisement, shall be paid by the title insurer making the deposit.

A title insurer shall not transact any insurance in this state unless it has paid-in capital represented by shares of stock of at least five hundred thousand dollars ($500,000).

An insurer which anywhere in the United States transacts any class of insurance other than title insurance is not eligible for the issuance of a certificate of authority to transact title insurance in this State nor for the renewal thereof.

Every title insurer shall annually set apart a sum equal to 10 percent of its premiums collected during the year. Such sums shall be allowed to accumulate until a fund is created equal in amount to 25 percent of the aggregate of the subscribed capital stock of the insurer, or one…

The title insurance surplus fund shall be maintained as a further security to holders and beneficiaries of the title policies issued by the insurer. If all or any part of the fund shall at any time be in excess of the amount required by Section 12370, such excess may be transferr…

Any such domestic insurer, after having its required capital paid in and depositing its required guarantee fund with the State Treasurer, may invest its funds in the preparation and purchase of materials and plant necessary to enable it to engage in the title insurance business. …

Notwithstanding the provisions of Section 12372, where a title plant is not being currently maintained, the asset value of such plant shall not exceed its asset value as of the last annual statement date preceding the first month such plant is not currently maintained, less 1/10t…

A title insurer shall not make any dividends except from profits remaining on hand after retaining unimpaired assets aggregating in value an amount equal to the sum of the following: (a) The aggregate par value of the shares of its capital stock issued and outstanding, including …

Except as otherwise authorized by subdivision (g) of Section 1105, a title insurer shall not directly or indirectly make a loan from its assets to any of its officers, directors or employees, or to any member of the family of any officer or director. Any officer, director, agent,…

Whenever a title insurer, upon withdrawing from insurance business in this State, desires to reinsure its policies with a title insurer whose “title insurance surplus fund” is not fully made up, the commissioner may require the reinsurer to increase its “title insurance surplus f…

(a) If an underwritten title company is placed into bankruptcy, receivership, or conservation by the commissioner, each title insurer operating under an underwriting agreement with the underwritten title company during the six months prior to the earliest of the conservation, ban…

(a) All escrow funds received by an underwritten title company that are subject to Section 12413.5 shall not be considered part of the estate of the underwritten title company for purposes of liquidation, receivership, bankruptcy, or conservation pursuant to Article 14 (commencin…