SECTIONS 7010-7018 - California Statutes

INSURANCE CODE

SECTION 7010-7018

7010. When any loss exceeds in amount the cash funds of the insurer
and also exceeds one-eighth of one per cent of the total amount of
the insurer's insurance in force, its president shall convene its
directors to make an assessment.

7011. Upon being convened for the purpose, the directors shall make
an assessment upon all of the property insured in the insurer. Such
assessment shall be in proportion to the amount for which each piece
of property is insured, taken in connection with the rate of premium
under which it is classified.

7012. When the amount of such loss does not exceed one-eighth of
one per cent of the total amount of insurance in force in the
insurer, its directors may, by resolution in writing signed by
two-thirds of all the directors while present at a meeting, borrow
money in the name of the insurer and give its evidence of
indebtedness therefor, in a total amount not exceeding one-eighth of
one per cent of the total amount of insurance thus in force.

7013. The term of any such loan shall not be greater than twelve
months nor shall the date of maturity be in excess of thirty days
beyond the date of the next annual meeting of the insurer.

7014. The board of directors may at its annual meeting levy an
assessment not to exceed twenty-five cents on the $100 of the first
class of insurance and a pro rata amount on lower classes. The sum so
raised shall constitute a reserve fund to be used in emergency cases
only. Another assessment for this fund shall not be made while this
reserve fund remains intact.

7015. (a) No assessment or assessments may be levied upon any
policy in excess of three times the amount of the premium named
therein. The liability to assessment on any policy may be further
reduced or eliminated as provided in subdivisions (b), (c), (d), and
(e).
(b) Upon written request, and if the commissioner finds that an
insurer has a surplus of admitted assets over liabilities of at
least:
(1) Seventy-five thousand dollars ($75,000) but less than one
hundred fifty thousand dollars ($150,000).
(2) One hundred fifty thousand dollars ($150,000) but less than
two hundred fifty thousand dollars ($250,000), or
(3) Two hundred fifty thousand dollars ($250,000); he or she shall
issue his or her certificate stating that the insurer has a surplus
of at least $____, but less than $____, filling in the applicable
amounts, or of at least two hundred fifty thousand dollars
($250,000), as the case may be.
(c) If, when a policy is issued, there is in force an unrevoked
certificate issued by the commissioner stating that the insurer has a
surplus of admitted assets over liabilities of at least:
(1) Seventy-five thousand dollars ($75,000), but less than one
hundred fifty thousand dollars ($150,000), no assessment or
assessments may be levied on the policy in excess of twice the amount
of the premium named therein.
(2) One hundred fifty thousand dollars ($150,000), but less than
two hundred fifty thousand dollars ($250,000), no assessment or
assessments may be levied on the policy in excess of a sum equal to
the amount of the premium stated therein.
(3) Two hundred fifty thousand dollars ($250,000), no assessment
or assessments may be levied on the policy.
(d) Whenever the commissioner finds that the surplus of the
insurer is less than the minimum specified in an outstanding
certificate he or she shall revoke the certificate.
(e) Upon revocation of the certificate no policy shall thereafter
be issued nor be permitted to remain in force beyond the date fixed
for the next payment of premium without provision therein or
endorsement thereon providing for that assessment liability as may be
applicable at the time of issuance or at the time for the payment of
the premium.
(f) As used in this section "liabilities" includes liabilities for
losses reported, expenses, taxes and all other indebtedness, and
provision for reinsuring all outstanding risks.

7015.5. The commissioner shall charge and collect in advance a fee
of seventy-four dollars ($74) for issuing a certificate under this
article, or for reissuing and amending or changing an obsolete
certificate at the request of an insurer.

7016. The secretary, whenever such an assessment is made, shall
immediately notify every policyholder in such insurer either
personally, by agent, or by letter directed to the policyholder's
usual post-office address, stating:
(a) The amount of the loss.
(b) The sum due from the policyholder as his share.
(c) To whom such payment is to be made.
(d) The time when the payment is to be made. Such time shall not
be less than thirty days nor more than ninety days from the date of
mailing notice.

7017. The insurer may bring an action against any member who
neglects or refuses to pay an assessment made upon him under the
provisions of this chapter, or to pay other liabilities due the
insurer.

7018. A director of any such insurer who wilfully refuses or
neglects to perform the duties imposed upon him by law or by the
insurer's by-laws shall be liable in his individual capacity to the
person sustaining a loss.