SECTIONS 1320-1330 - California Statutes

INSURANCE CODE

SECTION 1320-1330

1320. The attorney of every admitted reciprocal or interinsurance
exchange shall verify and cause to be filed with the commissioner
copies of the following forms used by the exchange:
(a) The form of every amendment to, revision of, or substitution
for the power of attorney in use at the time of admission.
(b) The form of each application for insurance and the form of
each contract for exchange of indemnity which would have to be filed
with or approved by the commissioner if such insurer were a capital
stock insurer, including where applicable the rates to be used
therewith.
(c) Every amendment, revision or replacement of forms described in
subdivision (b).
(d) Such other specific forms of applications for insurance or
specific contracts for exchange of indemnity as the commissioner may
from time to time by written order require be filed.
The commissioner may disapprove of any form filed in accordance
with this section if:
(1) It be contrary to law, or
(2) He finds it contains any material which is unintelligible,
uncertain, unfair, ambiguous, or obtuse, or likely to mislead a
person to whom the form is offered, delivered, or issued.
The procedure for such disapproval shall be that specified in
Section 12957 for withdrawal of approval of previously approved forms
of other insurers.
It shall be unlawful for such insurer to use any such form after
such disapproval has become final.

1321. If the name of the exchange does not contain either the words
"interinsurance," "reciprocal" or "exchange," then such forms shall
have printed under such name the words "an interinsurance exchange"
in a prominent place on each of such forms.

1322. The attorney prior to admission shall file with the
commissioner a declaration verified by his oath or, where such
attorney is a corporation, by the oath of its duly authorized
officers. Such declaration shall set forth or have annexed thereto:
(a) The name of the attorney and the name under which contracts
are to be made.
(b) The location of the principal office of the exchange.
(c) The classes of insurance to be exchanged.
(d) A copy of each form of policy under or by which insurance is
to be exchanged.
(e) A copy of the form of the power of attorney or agreement under
and by which such insurance is to be exchanged.
(f) A statement that executed contracts or bona fide applications,
to be concurrently effective, have been made for the exchange of
indemnities by at least 100 separate subscribers, except that such
statement shall not be required for organizations operating pursuant
to Section 1284.
(g) In the case of employer's liability or workmen's compensation
insurance, a statement that there have been executed contracts or
bona fide applications, to be concurrently effective, representing
annual payroll having a total of not less than one million dollars
($1,000,000).
(h) A statement that there are in the possession of such attorney
subject to the supervision of the advisory board, assets conforming
to the requirements of Article 5 of this chapter.
(i) A financial statement under oath in the form prescribed by the
commissioner for the annual statement.
(j) The instrument authorizing service of process as provided in
this chapter.
(k) A certificate showing any deposits of funds or securities.

1323. Concurrently with the filing of the declaration provided for
by the terms of section 1322 the attorney shall file with the
commissioner an instrument in writing executed by him, providing that
after the issuance of the certificate of authority actions against
the exchange may be brought either in the county in which the person
or property insured is located, or in which the exchange has its
principal office or place of business in the State; and also
providing that service of process may be had upon the
attorney-in-fact or upon the commissioner in suits against the
exchange.

1324. Except as provided in Section 1330, the attorney,
concurrently with the filing of the declaration provided for in
Section 1322, also shall file with the commissioner a bond, approved
by the commissioner, in favor of the people of the State of
California.

1325. Such bond shall be executed by the attorney with an admitted
surety insurer as surety.

1325.5. Such attorney may deposit with the commissioner, in lieu of
the bond executed by him, securities of a value equal to the
required amount of the bond and of the kinds set forth in sections
1170 and 1240. Such deposit shall be subject to the provisions of
Article 11, Chapter 1, Part 2, Division 1, of this code. Such deposit
shall be subject to levy of execution upon judgments against the
attorney.

1326. The attorney's bond shall be in the penal sum of fifty
thousand dollars ($50,000), conditioned that the attorney will
faithfully account for all moneys and other property which come into
his or her hands or are handled by him or her under the terms of the
power of attorney and the rules of the exchange, and that the
attorney will neither withdraw nor cause to be withdrawn nor
appropriate for his or her own use, from the funds of the exchange,
anything of value to which he or she is not entitled under the terms
of the power of attorney and the rules.

1327. The attorney's bond may be sued upon in one and the same
action either by any subscriber or any number of subscribers
suffering loss through a violation of its conditions or by the
receiver or trustee in liquidation of the exchange. Liability
thereunder may be enforced by any one or more of such parties.

1328. Any amount recovered on the attorney's bond shall be
deposited in and become a part of the funds of the exchange.

1329. Where provision is made, by the power of attorney executed by
the subscribers or the rules adopted by the exchange, for the
bonding of the attorney-in-fact against fraud and dishonesty with a
bond executed as prescribed in Section 1325 and conditioned as
provided by this chapter and in a penal sum at least equal to the
amount set forth in Section 1326, such bond may be filed with the
commissioner in lieu of any other bond required by this chapter and
shall be actionable in similar manner and for similar purposes as
such other bond.

1330. Where the home office of an exchange is located outside of
this State and the attorney files such a bond in the home State,
there may be filed with the commissioner, in lieu of such bond,
either a certified copy or duplicate thereof or an affidavit from the
insurance authority of the home State to the effect that such a bond
has been filed with it.