SECTIONS 12460-12464 - California Statutes

INSURANCE CODE

SECTION 12460-12464

12460. When a director of a mortgage insurer relies in good faith
on a balance sheet or profit and loss statement of the insurer, his
acts done in good faith are deemed to conform to the provisions of
this article if both the following conditions are present:
(a) On the basis of such balance sheet or statement such acts so
conform.
(b) The correctness of the balance sheet or statement is
established by one of the following:
(1) It is represented to him to be correct by the president of the
insurer or the insurer's officer having charge of, or supervision
of, the insurer's accounts.
(2) It is certified to be correct and according to the books of
the insurer by a public accountant or firm of public accountants who
were selected with reasonable care.

12461. Every mortgage insurer shall create and maintain an
insurance surplus which, when fully made up, is equal in amount to
twenty-five per cent of the then existing capital paid in.

12462. All or any of the insurance surplus may be paid in by
contributions from stockholders.

12463. Whenever its insurance surplus is not fully made up, every
mortgage insurer shall annually transfer to that surplus either at
least ten per cent of its net profits for the preceding year or such
lesser sum as will result in fully paying up that surplus.

12464. The insurance surplus must be maintained as a further
security to the holders of mortgage policies issued by the insurer.
If at any time such surplus is impaired by reason of a loss, the
amount of the impairment shall be restored in the manner provided for
its accumulation.