SECTIONS 4030-4034 - California Statutes

INSURANCE CODE

SECTION 4030-4034

4030. No domestic mutual insurer shall hereafter make any contract
whereby any person is granted or is to enjoy in fact the management
of the insurer to the substantial exclusion of its board of directors
or to have the controlling or pre-emptive right to produce
substantially all insurance business for the insurer, unless the
contract is filed with and approved by the commissioner. No such
contract shall be effective unless and until approved by the
insurance commissioner. Such approval shall be obtained by filing
application for approval with the commissioner accompanied by a
one-hundred-dollar ($100) fee. Any disapproval shall be delivered to
the insurer in writing, stating the grounds therefor.

4031. Any such contract shall provide that any such manager or
producer of its business shall within 90 days after expiration of
each calendar year furnish the insurer's board of directors a written
statement of amounts received under or on account of the contract
and amounts expended thereunder during such calendar year, including
the emoluments received therefrom by the respective directors,
officers, and other principal management personnel of the manager or
producer, and with such classification of items and further detail as
the insurer's board of directors may reasonably require.

4032. The commissioner shall disapprove any such contract if he
finds that it:
(a) Subjects the insurer to excessive charges; or
(b) Is to extend for an unreasonable length of time; or
(c) Does not contain fair and adequate standards of performance;
or
(d) Contains other inequitable provisions or provisions which
impair the proper interests of policyholders of the insurer.

4033. The commissioner may, after a hearing held thereon, withdraw
his approval of any such contract theretofore approved by him, if he
finds that the bases of his original approval no longer exist, or
that the contract has, in actual operation, shown itself to be
subject to disapproval on any of the grounds referred to in Section
4032 above.

4034. The holder of any such contract described in this Article
shall be subject to examination by the commissioner pursuant to
Article 4 (beginning with Section 730), Chapter 1, Part 2, Division 1
of this code.