2009 California Insurance Code - Section 688-688.5 :: Article 1.7. Continuity Of Management

688.  The Legislature declares that it is desirable for the general
welfare and in particular for the welfare of insurance beneficiaries,
policyholders, injured claimants and others that the business of
domestic insurers be continued notwithstanding the event of a
national emergency.
   The specific purpose of this chapter is to facilitate the
continued operation of domestic insurers in the event that a national
emergency is caused by an attack on the United States or by a
nuclear, atomic or other disaster which makes it impossible or
impracticable for a company to conduct its business in strict accord
with applicable provisions of law, its bylaws, or its charter.

688.1.  The board of directors of any domestic insurer may at any
time adopt emergency bylaws, subject to repeal or change by action of
those having power to adopt regular bylaws for the insurer, which
shall be operative during such a national emergency and which may,
notwithstanding any different provisions of the regular bylaws, or of
the applicable statutes, or of the insurer's charter, make any
provision that may be reasonably necessary for the operation of the
insurer during the period of such emergency.

688.2.  In the event that the board of directors of a domestic
insurer has not adopted emergency bylaws, the following provisions
shall become effective upon the occurrence of such a national
emergency:
   (1) Three directors shall constitute a quorum for the transaction
of business at all meetings of the board.
   (2) Any vacancy in the board may be filled by a majority of the
remaining directors, though less than a quorum, or by a sole
remaining director.
   (3) If there are no surviving directors, but at least three vice
presidents of the company survive, the three vice presidents with the
longest term of service shall be the directors and shall possess all
of the powers of the previous board of directors and such powers as
are granted herein or by subsequently enacted legislation. By
majority vote such emergency board of directors may elect other
directors. If there are not at least three surviving vice presidents,
the commissioner or duly designated person exercising the powers of
the commissioner shall appoint three persons as directors who shall
possess all of the powers of the previous board of directors and such
powers as are granted herein or by subsequently enacted legislation,
and these persons by majority vote may elect other directors.

688.3.  At any time the board of directors of a domestic insurer
may, by resolution, provide that in the event of such a national
emergency and in the event of the death or incapacity of the
president, the secretary or the treasurer of the company such
officers, or any of them, shall be succeeded in the office by the
person named or described in a succession list adopted by the board
of directors. Such list may be on the basis of named persons or
position titles, shall establish the order of priority and may
prescribe the conditions under which the powers of the office shall
be exercised.

688.4.  At any time the board of directors of a domestic insurer
may, by resolution, provide that in the event of such a national
emergency the home office or principal place of business of the
insurer shall be at such location as is named or described in the
resolution. Such resolution may provide for alternate locations and
establish an order of preference.

688.5.  "Insurer" as used in this article includes insurance
corporations and insurer organizations of every type and reciprocal
or interinsurance exchanges and the incorporated attorney in fact of
a reciprocal or interinsurance exchange, which corporate attorney in
fact is either organized under the laws of or has its home office and
principal place of business in this State.
   "Board of directors" as used in this article includes the
policy-determining body of an insurer whether or not it is called by
that name.