SECTIONS 12125-12129 - California Statutes

INSURANCE CODE

SECTION 12125-12129

12125. (a) Subject to the provisions of this chapter, any insurer
admitted to transact any class of insurance in this state, other than
title insurance, mortgage insurance, or mortgage guaranty insurance,
may transact legal insurance if it has a minimum paid-in capital and
surplus of not less than one million dollars ($1,000,000), provided
that the paid-in capital shall not be less than five hundred thousand
dollars ($500,000), notwithstanding the paid-in capital and surplus
requirements of Sections 700.01, 700.02, 10510, and 10511,
respectively.
(b) Any insurer not admitted to transact any other class of
insurance in this state may be admitted to transact legal insurance
if it has the paid-in capital and surplus required by subdivision
(a).
(c) As used in this section, "surplus" means the excess of
admitted assets over the sum of (1) liabilities for losses reported,
expenses, taxes, and all other indebtedness and reinsurance of
outstanding risks as provided by law, and either (2) paid-in capital,
in the case of an insurer issuing or having outstanding shares of
capital stock, or (3) minimum paid-in capital required by this
section, in the case of any other insurer.

12126. Group legal insurance shall mean that form of legal
insurance covering groups of persons as defined in this chapter with
or without one or more of their dependents and issued upon one of the
following bases:
(a) Under a policy issued to an employer insuring employees of the
employer;
(b) Under a policy issued to a labor union insuring members of the
union;
(c) Under a policy issued to the trustees of a fund established by
two or more employers in the same industry or by one or more labor
unions or by one or more employers and one or more labor unions,
which trustees shall be deemed the policyholder insuring employees of
the employers or members of the union;
(d) Under a policy issued to any other organization or combination
of organizations, incorporated or otherwise, (including professional
associations, trade associations, or other organizations) whose
members have common concerns or problems, or have joined together as
a means for bargaining for a particular position, or have voluntarily
formed or become members of an organization designed to perform a
service for its members, or any other substantially similar
organization, excluding an organization or combination of
organizations that is formed or maintained solely for the purposes of
obtaining insurance.

12127. Group and individual legal insurance may be offered in this
state subject to all the following conditions:
(a) Premium rates shall comply with any pertinent standards in
this code, including the standards that rates not be excessive,
inadequate, or unfairly discriminatory. Rates for group legal
insurance shall not be deemed to be unfairly discriminatory because
different premiums result for policyholders with like loss exposures
but different expense factors, or like expense factors but different
loss exposures, so long as the rates reflect the difference with
reasonable accuracy. Rates shall not be considered to be unfairly
discriminatory if they are averaged broadly among persons insured
under a group legal insurance plan.
(b) No policy or certificate of legal insurance may be delivered
or issued for delivery in this state unless and until a copy of the
form thereof has been filed with the commissioner. However, this
subdivision shall apply only to an insurer for a two-year period
immediately following the date upon which it files its first policy
or certificate of legal insurance with the commissioner.
(c) No policy of group legal insurance may be delivered or issued
for delivery in this state unless it contains a provision that the
insurer shall issue to the person in whose name the policy is issued,
for delivery to each member of the insured group, a certificate
setting forth in a summary form a statement of the essential features
of the insurance coverage and to whom benefits thereunder are
payable. If dependents are included in the coverage, only one
certificate need be issued for each family unit. Any certificates
delivered to members of an insured group pursuant to this subdivision
shall be required to be "individualized" within the meaning of that
term as it is defined by Section 10270.63 only if members of the
group contribute to the payment of the legal insurance premiums.

12128. In every group legal insurance plan, the employer, labor
union, trustees, or other person to whom a group legal insurance plan
policy is issued shall be the policyholder for all purposes of
entering into, amending, or terminating any contract of legal
insurance, administering any legal insurance plan, and exercising any
voting rights to which the policyholder is entitled. If entitled to
vote at meetings of the insurer, such policyholder shall be entitled
to one vote.

12129. The provisions of this chapter shall be enforced by the
commissioner, and he may, after notice and public hearing, promulgate
such reasonable rules and regulations as are necessary to administer
this chapter.