SECTIONS 1250-1254 - California Statutes

INSURANCE CODE

SECTION 1250-1254

1250. When any domestic incorporated insurer has, pursuant to the
laws of this State, invested any of its funds in purchases of, or
loans upon, the stock or obligations of a corporation or of a nation,
state, or political or municipal division of a state, if the
commissioner has reason to believe that such stock or obligations are
not amply secured or are not yielding an income, he may direct the
insurer to report to him under oath the amount of the stock or
obligation, the security therefor and its market value.

1251. A stock, bond or other evidence of debt if in default as to
principal or interest, or if not amply secured, shall not be valued
as an asset of the insurer above its market value.

1252. All bonds or other evidences of debt held by an admitted
incorporated insurer if amply secured and if not in default as to
principal or interest may, in the discretion of the commissioner, be
valued as follows:
(a) If purchased at par, at the par value.
(b) If purchased above or below par, on the basis of the purchase
price adjusted so as to bring the value to par at maturity and so as
to yield the effective rate of interest on the price at which the
purchase was made.
(c) In such valuation, the purchase price shall in no case be
taken at a higher figure than the actual market value at the time of
purchase.
The commissioner shall have full discretion in determining the
method of calculating values according to the foregoing rule, the
values found by him in accordance with such method being final and
binding.

1253. Any such insurer may report such bonds or other evidence of
debt at market value or book value, but in no event at an aggregate
value exceeding the aggregate of the values calculated according to
the rule prescribed by section 1252.

1254. Any asset of an insurer which is found by the commissioner to
be insolvent or threatened with insolvency shall be reduced in
value, if necessary, to reflect its proper value.
Where the asset is subject to an offset or lien which the
commissioner has reasonable grounds to believe is about to be
exercised or enforced, the commissioner may require that the asset
and the liability which gives rise to the offset or lien be reduced
proportionately.
The commissioner shall grant a hearing to establish the value of
an asset upon written demand of the insurer.