SECTIONS 1610-1620 - California Statutes

INSURANCE CODE

SECTION 1610-1620

1610. Any of the acts described in Section 1611, when effected in
this State, by mail or otherwise, by a foreign or alien insurer which
is nonadmitted at the time of the solicitation, issuance or delivery
by it of contracts of insurance to residents of, or to corporations
authorized to do business in, this State, is equivalent to and shall
constitute an appointment by such insurer of the commissioner and his
successor or successors in office to be its true and lawful
attorney, upon whom may be served all lawful process in any action,
suit, or proceeding instituted by or on behalf of an insured or
beneficiary arising out of any such contracts of insurance, and any
such act shall be signification of its agreement that such service of
process is of the same legal force and validity as personal service
of process in this State upon such insurer.

1611. The acts referred to in Section 1610 are:
(1) The issuance or delivery to residents of, or to corporations
authorized to do business in, this State of contracts of insurance
insuring (a) the lives or persons of residents of this State
physically present herein at the time of such issuance or delivery or
(b) property or operations located in this State.
(2) The solicitation of applications for such contracts.
(3) The collection of premiums, membership fees, assessments or
other considerations for such contracts.
(4) Any other transaction of business arising out of such
contracts.

1612. Such service of process may be made as provided in Article 1
(commencing with Section 12919) of Chapter 2 of Division 3.

1616. Before any nonadmitted foreign or alien insurer shall file or
cause to be filed any pleading in any action, suit or proceeding
instituted against it, the insurer shall either (1) procure a
certificate of authority to transact insurance in this state; or (2)
give a bond in the action, suit or proceeding in an amount to be
fixed by the court sufficient to secure the payment of any final
judgment which may be rendered in the action, suit, or proceeding.

1617. The court in any action, suit, or proceeding, in which
service of process is effected in the manner provided in Section 1612
may, in its discretion, order such postponement as may be necessary
to afford the defendant reasonable opportunity to comply with the
provisions of Section 1616 and to defend such action.

1618. Nothing in Section 1616 is to be construed to prevent a
nonadmitted foreign or alien insurer from filing a motion to quash a
writ or to set aside service thereof made in the manner provided in
Section 1612 on the ground that such insurer has not done any of the
acts described in Section 1611.

1619. In any action against a nonadmitted foreign or alien insurer
upon a contract of insurance issued or delivered in this State to a
resident thereof or to a corporation authorized to do business
therein, if the insurer has failed for 30 days after demand prior to
the commencement of the action to make payment in accordance with the
terms of the contract, and it appears to the court that such refusal
was vexatious and without reasonable cause, the court may allow to
the plaintiff a reasonable attorney fee and include such fee in any
judgment that may be rendered in such action. Such fee shall not
exceed 12 1/2 percent of the amount which the court or jury finds the
plaintiff is entitled to recover against the insurer, but in no
event shall such fee be less than twenty-five dollars ($25). Failure
of an insurer to defend any such action shall be deemed prima facie
evidence that its failure to make payment was vexatious and without
reasonable cause.

1620. (a) The provisions of the preceding sections of this article
shall not apply to any action, suit or proceeding against any
unauthorized foreign or alien insurer arising out of any contract of
insurance effected in accordance with Section 1760, 1760.5, 1763, or
1763.1, or, if the contract is governed by and complies with the laws
of the state in which the contract was entered. The provisions of
Section 1610 shall apply to any action, suit, or proceeding under
this section unless the insurer has designated an agent in California
for service of process or the contract contains a provision
designating a resident of this state or any firm of which one member
is a resident of this state to be its true and lawful attorney upon
whom may be served all lawful process in any such action, suit or
proceeding.
(b) In any such action, suit or proceeding arising out of any such
contract of insurance, the court may require the insurer to file a
bond, in an amount sufficient to secure the payment of any final
judgment which may be rendered unless one or more of the following is
applicable:
(1) The insurer makes a showing satisfactory to the court that it
maintains in a state of the United States funds or securities in
trust or otherwise, sufficient and available to satisfy any such
final judgment and that it will pay the judgment without requiring
suit to be brought thereon in the state where the securities or funds
are located.
(2) At the time the insurer files any pleading in any action,
suit, or proceeding instituted against it, the insurer is listed as
an eligible surplus line insurer in accordance with subdivision (f)
of Section 1765.1, unless by facts presented to the court there is
created a reasonable doubt as to the present ability of the insurer
to satisfy any final judgment in the action, suit, or proceeding.
Upon request of a party or the court, the unauthorized foreign or
alien insurer or reinsurer shall provide the court and the party
requesting the bond with copies of documents relating to the
financial condition of the insurer, including, but not limited to,
copies of the insurer's most recent annual statement and audited
financial report and, where applicable, a certified copy of the trust
agreement required by subdivision (b) of Section 1765.1 and a
verified copy of the most recent quarterly statement or list of
assets in the trust.
(3) With respect to a contract of reinsurance issued in accordance
with Section 1760.5, the reinsurer has complied with the provisions
of this code necessary to permit the ceding insurer to take credit on
its financial statement for the reinsurance as set forth in Section
922.4 or 922.5.