SECTIONS 1620.1-1620.7 - California Statutes

INSURANCE CODE

SECTION 1620.1-1620.7

1620.1. (a) The purpose of this article is to subject to the
jurisdiction of the commissioner and to the jurisdiction of the
courts of this State, insurers not authorized to transact business in
this State which place in or send into this State any false
advertising designed to induce residents of this State to purchase
insurance from insurers not authorized to transact business in this
State. The Legislature declares it is in the interest of the citizens
of this State who purchase insurance from insurers which solicit
insurance business in this State in the manner set forth in the
preceding sentence that such insurers be subject to the provisions of
this article. In furtherance of such state interest, the Legislature
in this article provides a method of substituted service of process
upon such insurers and declares that in so doing, it exercises its
power to protect its residents and also exercises powers and
privileges available to the State by virtue of Public Law 15, 79th
Congress of the United States, Chapter 20, 1st Session, S. 340, which
declares that the business of insurance and every person engaged
therein shall be subject to the laws of the several states; the
authority provided in such sections to be in addition to any existing
powers of this State.
(b) The provisions of this article shall be liberally construed.

1620.2. As used in this article (commencing with Section 1620.1):
(a) "Unfair Trade Practices Act" means Article 6.5 (commencing
with Section 790) of Chapter 1 of Part 2 of Division 1.
(b) "Residents" means any person defined in Section 19 who is
resident within the meaning of Section 30.

1620.3. No unauthorized foreign or alien insurer shall make, issue,
circulate or cause to be made, issued or circulated to residents of
this State any estimate, illustration, circular, pamphlet, or letter,
or cause to be made in any newspaper, magazine or other publication
or over any radio or television station, any announcement or
statement to such residents misrepresenting its financial condition
or the terms of any contracts issued or to be issued or the benefits
or advantages promised thereby, or the dividends or share of the
surplus to be received thereon in violation of the Unfair Trade
Practice Act, and whenever the commissioner shall have reason to
believe that any such insurer is engaging in unlawful advertising, it
shall be his duty to give notice of such fact by registered mail to
the insurer and to the insurance supervisory official of the
domiciliary state of the insurer. For the purpose of this section,
the domiciliary state of an alien insurer shall be deemed to be the
state of entry or the state of the principal office in the United
States.

1620.4. If after 30 days following the giving of the notice
mentioned in Section 1620.3 the insurer has failed to cease making,
issuing, or circulating such false misrepresentations or causing the
same to be made, issued or circulated in this State, and if the
commissioner has reason to believe that a proceeding by him in
respect to such matters would be to the interest of the public, and
that the insurer is issuing or delivering contracts of insurance to
residents of this State or collecting premiums on such contracts or
doing any of the acts enumerated in Section 1620.5, he shall take
action against the insurer under the Unfair Trade Practice Act.

1620.5. (a) Any of the following acts in this State, effected by
mail or otherwise, by any unauthorized foreign or alien insurer: (1)
the issuance or delivery of contracts of insurance to residents of
this State, (2) the solicitation of applications for such contracts,
(3) the collection of premiums, membership fees, assessments or other
considerations for such contracts, or (4) any other transaction of
insurance business, is equivalent to and shall constitute an
appointment by the insurer of the commissioner and his successor or
successors in office, to be its true and lawful attorney, upon whom
may be served all statements of charges, notices and lawful process
in any proceeding instituted in respect to the misrepresentations set
forth in Section 1620.3 under the provisions of the Unfair Trade
Practice Act, or in any action, suit or proceeding for the recovery
of any penalty therein provided, and any such act shall be
signification of its agreement that the service of statement of
charges, notices or process is of the same legal force and validity
as personal service of the statement of charges, notices or process
in this State, upon such insurer.
(b) Service of a statement of charges and notices under the Unfair
Trade Practice Act shall be made by any deputy or employee of the
Department of Insurance delivering to and leaving with the
commissioner or some person in apparent charge of his office, two
copies thereof. Service of process issued by any court in any action,
suit or proceeding to collect any penalty under the act provided,
shall be made by delivering and leaving with the commissioner, or
some person in apparent charge of his office, two copies thereof. The
commissioner shall forthwith cause to be mailed by registered mail
one of the copies of the statement of charges, notices or process to
the defendant at its last known principal place of business, and
shall keep a record of all statements of charges, notices and process
so served. Such service of statement of charges, notices or process
shall be sufficient provided they shall have been so mailed and the
defendant's receipt or receipt issued by the post office with which
the letter is registered, showing the name of the sender of the
letter and the name and address of the person to whom the letter is
addressed, and the affidavit of the person mailing the letter showing
a compliance herewith are filed with the commissioner in the case of
any statement of charges or notices, or with the clerk of the court
in which the action is pending in the case of any process, on or
before the date the defendant is required to appear or within such
further time as may be allowed.
(c) Service of statement of charges, notices and process in any
such proceeding, action or suit shall in addition to the manner
provided in subsection (b) of this section be valid if served upon
any person within this State who on behalf of such insurer is
(1) Soliciting insurance, or
(2) Making, issuing or delivering any contract of insurance, or
(3) Collecting or receiving in this State any premium for
insurance;
and a copy of such statement of charges, notices or process is
sent within 10 days thereafter by registered mail by or on behalf of
the commissioner to the defendant at the last known principal place
of business of the defendant, and the defendant's receipt, or the
receipt issued by the post office with which the letter is
registered, showing the name of the sender of the letter, the name
and address of the person to whom the letter is addressed, and the
affidavit of the person mailing the same showing a compliance
herewith, are filed with the commissioner in the case of any
statement of charges or notices, or with the clerk of the court in
which such action is pending in the case of any process, on or before
the date the defendant is required to appear or within such further
time as the court may allow.
(d) No cease or desist order or judgment by default under this
section shall be entered until the expiration of 30 days from the
date of the filing of the affidavit of compliance.
(e) Service of process and notice under the provisions of this
article (commencing with Section 1620.1) shall be in addition to all
other methods of service provided by law, and nothing in these
sections shall limit or prohibit the right to serve any statement of
charges, notices or process upon any insurer in any other manner now
or hereafter permitted by law.

1620.6. If any provision of this article (commencing with Section
1620.1) or the application thereof to any person or circumstance is
held invalid, such invalidity shall not affect other provisions or
application of this article which can be given effect without the
invalid provision or application, and to this end the provisions of
this article are declared to be severable.

1620.7. This article (commencing with Section 1620.1) may be cited
as the Unauthorized Insurers False Advertising Process Act.