2011 California Code
Insurance Code
DIVISION 2. CLASSES OF INSURANCE [1880 - 12865]
ARTICLE 2. Capital Requirements and Permitted Insurances
Section 12442

A mortgage insurer shall not reduce the aggregate par value of the shares of stock representing its outstanding paid-in capital, nor such paid-in capital, to an aggregate value less than is required to be maintained by it; provided, in the event any insurer shall give notice in writing to the commissioner that it has ceased to issue policies of mortgage insurance and mortgage participation certificates, the provision of this code requiring a minimum of $250,000 paid-in capital shall not be applicable, but such insurer shall at all times maintain its unimpaired paid-in capital up to an amount equal to at least one-twentieth of the aggregate amount of unpaid principal of securities guaranteed or insured by it, and such insurer shall not issue any new policies of mortgage insurance or any mortgage participation certificates so long as its fully paid-in and unimpaired capital is less than $250,000. A mortgage insurer shall not be deemed insolvent under the provisions of section 984 of this code or under any other law of this State, because of the fact that it has reduced its outstanding capital stock to an aggregate par value less than $250,000 pursuant to the provisions of this section. Changes in the assets of any trust under which mortgage participation certificates have been issued, which certificates at the date of issuance fully conformed to and complied with the law then in force, which changes are effected in the administration of and pursuant to the provisions of such trust, shall not be deemed the issuance of policies of mortgage insurance or mortgage participation certificates.

(Amended by Stats. 1935, Ch. 559.)