2007 California Insurance Code General Provisions

CA Codes (ins:1-48)

1.  This act shall be known as the Insurance Code.



2.  The provisions of this code in so far as they are substantially
the same as existing statutory provisions relating to the same
subject matter shall be construed as restatements and continuations
thereof, and not as new enactments.


3.  All persons who, at the time this code goes into effect, hold
office under any of the acts repealed by this code, which offices are
continued by this code, continue to hold the same according to the
former tenure thereof.


4.  No action or proceeding commenced before this code takes effect,
and no right accrued, is affected by the provisions of this code,
but all procedure thereafter taken therein shall conform to the
provisions of this code so far as possible.




5.  Unless the context otherwise requires, the general provisions
hereinafter set forth shall govern the construction of this code.



6.  Division, part, chapter, article, and section headings contained
herein shall not be deemed to govern, limit, modify or in any manner
affect the scope, meaning, or intent of the provisions of any
division, part, chapter, article, or section hereof.




7.  Whenever, by the provisions of this code, a power is granted to
a public officer or a duty imposed upon such an officer, the power
may be exercised or the duty performed by a deputy of the officer or
by a person authorized pursuant to law by the officer, unless it is
expressly otherwise provided.


8.  Writing includes any form of recorded message capable of
comprehension by ordinary visual means.  Whenever any notice, report,
statement or record is required or authorized by this code, it shall
be made in writing in the English language unless it is otherwise
expressly provided.



9.  Whenever any reference is made to any portion of this code or of
any other law of this State, such reference shall apply to all
amendments and additions thereto now or hereafter made.



10.  "Section" means a section of this code unless some other
statute is specifically mentioned and "subdivision" or "subsection"
means a subdivision or subsection of the section in which that term
occurs unless some other section is expressly mentioned.




11.  The present tense includes the past and future tenses; and the
future, the present.



12.  The masculine gender includes the feminine and neuter.



13.  The singular number includes the plural, and the plural the
singular.


14.  "County" includes "city and county."



15.  "City" includes "city and county."



16.  As used in this code the word "shall" is mandatory and the word
"may" is permissive, unless otherwise apparent from the context.



17.  "Oath" includes affirmation.



18.  "Signature" or "subscription" includes mark when the signer or
subscriber can not write, such signer's or subscriber's name being
written near the mark by a witness who writes his own name near the
signer's or subscriber's name; but a signature or subscription by
mark can be acknowledged or can serve as a signature or subscription
to a sworn statement only when two witnesses so sign their own names
thereto.



19.  "Person" means any person, association, organization,
partnership, business trust, limited liability company, or
corporation.


20.  "Commissioner" means the Insurance Commissioner of this State.



20.5.  Whenever in this code the terms "State Industrial Accident
Commission" or "Industrial Accident Commission" or "commission,"
relating to the said "State Industrial Accident Commission" or the
said "Industrial Accident Commission," appear, said terms shall mean
"Division of Industrial Accidents," including "administrative
director" of said division or "appeals board," or both, as the
context may require.



21.  "Division," and "department," in reference to the government of
this state, mean the Department of Insurance of this state.



21.5.  (a) "Administrative law bureau" or "administrative hearing
bureau" means the unit within the Department of Insurance that
provides administrative hearings.
   (b) An administrative law judge appointed by the commissioner
pursuant to civil service rules shall be employed within the
administrative law bureau and shall not be supervised directly by the
commissioner or supervised directly or indirectly by an employee in
the legal branch of the department.



22.  Insurance is a contract whereby one undertakes to indemnify
another against loss, damage, or liability arising from a contingent
or unknown event.


23.  The person who undertakes to indemnify another by insurance is
the insurer, and the person indemnified is the insured.



24.  "Admitted," in relation to a person, means entitled to transact
insurance business in this state, having complied with the laws
imposing conditions precedent to transaction of such business. The
State Compensation Insurance Fund shall be deemed to be admitted
pursuant to authority to transact workers' compensation insurance
granted by the Legislature. The commissioner shall not revoke or
suspend the State Compensation Insurance Fund's authority to transact
workers' compensation insurance.



25.  "Nonadmitted," in relation to a person, means not entitled to
transact insurance business in this State, whether by reason of
failure to comply with conditions precedent thereto, or by reason of
inability so to comply.


26.  "Domestic" means organized under the laws of this State,
whether or not admitted.



27.  "Foreign" means not organized under the laws of this State,
whether or not admitted.



28.  "State" means the State of California, unless applied to the
different parts of the United States.  In the latter case, it
includes the District of Columbia, the commonwealths and the
territories.



29.  "Mortgage" includes a trust deed, "mortgagor" includes a
trustor under such trust deed, "mortgagee" includes a beneficiary
under such trust deed, or a trustee exercising powers or performing
duties granted to or imposed upon him thereunder, and "lien" in
respect to real or personal property includes a charge or incumbrance
arising out of a trust deed.



30.  "Resident" means residing in this State, "nonresident" means
not residing in this State.



31.  "Insurance agent" means a person authorized, by and on behalf
of an insurer, to transact all classes of insurance other than life
insurance.
   An insurance agent is also authorized to transact 24-hour care
coverage, as defined in Section 1749.02.



32.  (a) A life licensee is a person authorized to act as a life
agent on behalf of a life insurer or a disability insurer to transact
any of the following:
   (1) Life insurance.
   (2) Accident and health insurance.
   (3) Life and accident and health insurance.
   (b) Licenses to act as a life agent under this chapter shall be of
the types as set forth in Section 1626.
   (c)  A life agent may be authorized to transact 24-hour care
coverage, as defined in Section 1749.02, pursuant to the requirements
of subdivision (d) of Section 1749 or subdivision (b) of Section
1749.33.



32.5.  "Life and disability insurance analyst" means a person who,
for a fee or compensation of any kind, paid by or derived from any
person or source other than an insurer, advises, purports to advise,
or offers to advise any person insured under, named as beneficiary
of, or having any interest in, a life or disability insurance
contract, in any manner concerning that contract or his or her rights
in respect thereto.



33.  "Insurance broker" means a person who, for compensation and on
behalf of another person, transacts insurance other than life with,
but not on behalf of, an insurer.



33.5.  "Fire and casualty broker-agent" means a person licensed
pursuant to Section 1625.



34.  "Insurance solicitor" means a natural person employed to aid a
fire and casualty broker-agent acting as an insurance agent or
insurance broker in transacting insurance other than life.



35.  "Transact" as applied to insurance includes any of the
following:
   (a) Solicitation.
   (b) Negotiations preliminary to execution.
   (c) Execution of a contract of insurance.
   (d) Transaction of matters subsequent to execution of the contract
and arising out of it.



36.  "Paid-in capital" or "capital paid-in" means:
   (a) In the case of a foreign mutual insurer not issuing or having
outstanding capital stock, the value of its assets in excess of the
sum of its liabilities for losses reported, expenses, taxes, and all
other indebtedness and reinsurance of outstanding risks as provided
by law.  Such foreign mutual insurer shall not be admitted, however,
unless its paid-in capital is composed of available cash assets
amounting to at least two hundred thousand dollars (0,000.00).
   (b) In the case of a foreign joint stock and mutual insurer, its
paid-in capital computed, according to its desire, pursuant to the
provisions of subdivision (a) or subdivision (c) of this section.  If
computed pursuant to the provisions of subdivision (a), its
admission is subject to the qualification therein expressed.
   (c) In the case of all other insurers, the lower of the following
amounts:
   (1) The value of its assets in excess of the sum of its
liabilities for losses reported, expenses, taxes, and all other
indebtedness and reinsurance of outstanding risks as provided by law.

   (2) The aggregate par value of its issued shares of stock,
including treasury shares.
   For the purpose of computing paid-in capital or capital paid-in,
shares of stock are not taken as liabilities.



37.  Provisions of this code relating to a particular class of
insurance or a particular type of insurer prevail over provisions
relating to insurance in general or insurers in general.



38.  Unless expressly otherwise provided, any notice required to be
given to any person by any provision of this code may be given by
mailing notice, postage prepaid, addressed to the person to be
notified, at his residence or principal place of business in this
State.  The affidavit of the person who mails the notice, stating the
facts of such mailing, is prima facie evidence that the notice was
thus mailed.



39.  If any provision of this code, or the application thereof to
any person or circumstance, is held invalid, the remainder of the
code, or the application of such provision to other persons or
circumstances, shall not be affected thereby.




40.  The existence of insurers formed prior to the date this code
takes effect shall not be affected by the enactment of this code nor
by any repeal of the laws under which they were formed, but such
insurers shall thereafter operate under the provisions of this code.




41.  All insurance in this State is governed by the provisions of
this code.


42.  The designation of insurance coverage as "group" in any code or
law of this State other than this code does not authorize its
representation as a group coverage or as a group policy, certificate
or contract by any person licensed or certificated by the
commissioner unless the policy providing the coverage is defined as
group insurance by a specific provision of this code or of the laws
of the state in which the policy, certificate or contract is issued.
This section shall apply only to life, disability and workmen's
compensation insurance.


44.  Any person who willfully and knowingly makes, circulates, or
transmits to another any false written or printed statement for the
purpose of damaging the financial condition or stability of any
insurance company doing business in this state is guilty of a
misdemeanor punishable by a fine of not more than one thousand
dollars (,000).



45.  (a) "Electronic funds transfer" means any transfer of funds,
other than a transaction originated by check, draft, or similar paper
instrument, that is initiated through an electronic terminal,
telephonic instrument, or computer or magnetic tape, so as to order,
instruct, or authorize a financial institution to debit or credit an
account.  Electronic funds transfer shall be accomplished by an
automated clearinghouse debit, an automated clearinghouse credit, a
Federal Reserve Wire Transfer (Fedwire), or an international funds
transfer, at the option of the insurer.
   (b) For purposes of this section:
   (1) "Automated clearinghouse" means any federal reserve bank, or
an organization established by agreement with the National Automated
Clearing House Association, that operates as a clearinghouse for
transmitting or receiving entries between banks or bank accounts and
that authorizes an electronic transfer of funds between those banks
or bank accounts.
   (2) "Automated clearinghouse debit" means a transaction in which
any department of the state, through its designated depository bank,
originates an automated clearinghouse transaction debiting the
taxpayer's bank account and crediting the state's bank account for
the amount of tax.  Banking costs incurred for the automated
clearinghouse debit transaction by the taxpayer shall be paid by the
state.
   (3) "Automated clearinghouse credit" means an automated
clearinghouse transaction in which the taxpayer, through its own
bank, originates an entry crediting the state's bank account and
debiting its own bank account.  Banking costs incurred by the state
for the automated clearinghouse credit transaction may be charged to
the taxpayer.
   (4) "Fedwire" means any transaction originated by the taxpayer and
utilizing the national electronic payment system to transfer funds
through federal reserve banks, pursuant to which the taxpayer debits
its own bank account and credits the state's bank account.
Electronic funds transfers may be made by Fedwire only if prior
approval is obtained from the department and the taxpayer is unable,
for reasonable cause, to make payments pursuant to paragraph (2) or
(3).  Banking costs charged to the taxpayer and to the state may be
charged to the taxpayer.
   (5) "International funds transfer" means any transaction
originated by the taxpayer and utilizing "SWIFT," the international
electronic payment system to transfer funds in which the taxpayer
debits its own bank account, and credits the funds to a United States
bank that credits the state's bank account.  Banking costs charged
to the taxpayer and to the state may be charged to the taxpayer.



46.  The Legislature hereby declares its intent that the term
"workmen's compensation" shall hereafter also be known as "workers'
compensation."  In furtherance of this policy it is the desire of the
Legislature that references to the term "workmen's compensation" in
this code be changed to "workers' compensation" when such code
sections are being amended for any purpose.  This act is declaratory
and not amendatory of existing law.



47.  "Surplus line broker" means a person licensed under Section
1765 and authorized to do business under Chapter 6 (commencing with
Section 1760) of Part 2 of Division 1.



48.  A "surplus line broker certificate" means a certificate issued
by a surplus line broker to an insurance purchaser as evidence of the
placement of insurance with an eligible nonadmitted insurer in
accordance with the requirements of Sections 1764, 1764.1, and
1764.2.