SECTIONS 12090-12093 - California Statutes

INSURANCE CODE

SECTION 12090-12093

12090. (a) An admitted surety insurer shall not become surety on
any one undertaking, or accept reinsurance on such undertaking, when
its liability thereon, in excess of the amount reinsured by it in an
admitted insurer, amounts to more than ten percent of its capital and
surplus as shown by its last statement on file in the office of the
commissioner.
(b) In determining its liability on an undertaking for purposes of
subdivision (a), an admitted insurer may reduce its liability by
either or both of the following:
(1) Deposits with the surety insurer, in a manner acceptable to
the commissioner, or by conveyance to it in trust for its protection,
of assets that would qualify as admitted assets.
(2) A clean and irrevocable letter of credit acceptable to the
commissioner.

12091. Whenever a surety insurer fails to maintain such a financial
condition that assets allowed under subdivision (a) are equal in
value to the aggregate of the charges prescribed under subdivision
(b), the commissioner shall act as prescribed in Section 12092.
(a) In estimating its condition the commissioner shall allow as
assets only such as are allowed under law in force at the time of the
estimate.
(b) The charges to be aggregated shall be:
(1) Eighty percent of the paid-in capital, but in no case less
than two hundred fifty thousand dollars ($250,000).
(2) All outstanding indebtedness.
(3) Provision for reinsuring all outstanding risks, estimated as
prescribed in Section 985.

12092. Whenever such an insurer fails to maintain the financial
condition required by section 12091, the commissioner shall require
the deficiency to be made up in sixty days. If it is not made up as
required, he shall issue a certificate showing the extent of such
deficiency. He shall publish the certificate once a week for three
weeks, in a daily San Francisco paper. From the time of first
publication until such deficiency is made up, the insurer shall not
do business in this State.

12093. Whenever a surety insurer gives notice of cancellation of
the coverage of an employee under a blanket fidelity bond, upon the
request of the employee, the surety insurer, within 10 days of the
request, shall furnish to the employee a statement setting forth the
ground or grounds upon which the notice of cancellation is based.
There shall be no liability on the part of, and no cause of action
shall arise against, any surety insurer, or its licensed
investigative sources, for any statements made by it concerning any
employee in a written notice required to be given pursuant to this
section.
If the surety insurer fails to comply with the provisions of the
first paragraph of this section, the employee may apply to the
commissioner for a certificate of the facts or information desired
and the commissioner shall act thereon in accordance with the
provisions of Article 3 (commencing with Section 12950) of Chapter 2
of Division 3.