SECTIONS 11440-11443 - California Statutes

INSURANCE CODE

SECTION 11440-11443

11440. Any insurer so reorganized shall have assets representing a
paid-in capital represented by shares of stock apart from any assets
described in Section 11441. At least two hundred thousand dollars
($200,000) of that capital shall be paid up before the insurer issues
any policies on the reserve plan.

11441. All assets belonging before transformation to any such
insurer or arising or accruing from policies issued upon the
assessment plan, shall be used only for the benefit of the holders of
such policies. Such assets shall not be used or considered as any
part of the paid in capital provided for by section 11440.

11442. If, at or after the time of the transformation, it appears,
either from the last preceding annual report by such insurer to the
commissioner, or from an investigation made by the commissioner, that
the present value of the contributions to be received from the
holders of policies on the assessment plan, together with all assets
owned by the insurer that have been accumulated from assessments paid
by members on that plan, are not equal to the present value of the
benefits, including all matured liabilities, to be derived by members
under the assessment plan, the insurer shall set aside and maintain
a fund for the purpose set forth in section 11443. Such fund together
with the present value of contributions and assets, shall equal the
present value of such benefits.

11443. The fund required by Section 11442 shall be used for the
payment of matured liabilities arising under the assessment plan when
other assets applicable thereto are exhausted. It may be derived
from the excess over two hundred thousand dollars ($200,000) of the
paid-in capital of the insurer. It need be maintained only during the
existence of conditions set forth in Section 11442.