SECTIONS 12440-12442 - California Statutes

INSURANCE CODE

SECTION 12440-12442

12440. An insurer shall not transact mortgage insurance unless it
has a paid-in capital of at least $250,000 represented by shares of
stock.

12441. An insurer which anywhere in the United States transacts any
class of insurance other than mortgage insurance is not eligible for
the issuance of a certificate of authority to transact mortgage
insurance in this State nor for the renewal thereof.

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.