SECTIONS 900-925.4 - California Statutes

INSURANCE CODE

SECTION 900-925.4

900. (a) On or before the first day of March of each year every
insurer doing business in this state shall make and file with the
commissioner, in the number, form, and by the methods prescribed by
the commissioner, statements exhibiting its condition and affairs as
of the previous December 31. If the first day of March falls on a day
other than a business day, the filing is due to the commissioner by
the first business day preceding the first day of March.
(b) Each year, on or before the following dates, every insurer
doing business in this state shall make and file with the
commissioner, in the number, form, and methods prescribed by the
commissioner, statements exhibiting its condition and affairs for the
period beginning on January 1 of the current calendar year through
the end of each quarter of the current year as described below. These
quarterly filings shall cover the period of time beginning January 1
of the current year through and including the last day of the
quarter for which the report is being made. The first quarter filing
shall be filed with the commissioner on or before May 15th of every
year. The second quarter filing shall be filed with the commissioner
on or before August 15th of every year. The third quarter filing
shall be filed with the commissioner on or before November 15th of
every year. If any of these dates fall on a day other than a business
day, then the filing is due to the commissioner by the first
business day preceding that date.

900.2. (a) All insurers doing business in this state shall have an
annual audit by an independent certified public accountant. The
audit, including required auditor and management reporting, the audit
committee and its membership, and other aspects of the audit content
and process, shall be conducted, and the audit report prepared and
filed, in conformity with the standards adopted by the National
Association of Insurance Commissioners.
(b) The commissioner may grant 30-day extensions of the filing
date upon a showing by the insurer and its independent certified
public accountant of the reasons for requesting each extension and
the determination by the commissioner of substantial cause for an
extension. The request for an extension shall be submitted in writing
not less than 10 days prior to the due date in sufficient detail to
permit the commissioner to make an informed decision on the requested
extension.
(c) The commissioner may promulgate regulations to further the
purposes of this section.

900.5. The commissioner shall charge and collect one hundred
eighteen dollars ($118) in advance as a fee for the first filing each
year of a statement under this article. Only one such fee shall be
charged or collected from any one insurer in any one calendar year.

900.8. The commissioner may decline to grant or renew or may
suspend or revoke a certificate of authority of an insurer that
knowingly files with the department a false financial statement.

900.9. Any officer, director, employee or agent of any insurer, who
wilfully signs or files a false or untrue report or statement of the
business, affairs, or condition of such insurer with intent to
deceive any public officer, office, or board to which such insurer is
required by law to report, or which has authority by law to examine
into its affairs or transactions, is guilty of a felony.

902. Insurers engaged in the business of compensation insurance
shall, at such intervals as may be prescribed by the commissioner,
file statements supplemental to such annual statements and covering
such matters dealt with in such annual statements as the commissioner
designates. Neither such supplemental report nor any synopsis
thereof need be published.

903. The commissioner shall require statements and reports to be
verified as follows: (a) If made by a domestic corporation, by the
oaths of any two of the executive officers thereof. (b) If made by an
individual or firm, by the oath of such individual or a member of
the firm. (c) If made by a foreign insurer, by the oath of the
principal executive officer thereof, or manager, residing within the
United States.

903.5. In any case where an insurer is required by law to file with
the commissioner statements or reports respecting its financial
condition, income or disbursements, verified or signed by its
designated officers, agents, or employees, the commissioner may
accept and file the statement or report verified by affidavit of the
president or vice president and the treasurer or secretary of such
insurer, in lieu of the verification or signature otherwise
prescribed by law.

904. In addition to the annual statement required to be filed
pursuant to Section 900, each admitted insurer shall file an
authorization for disclosure to the commissioner of financial records
pertaining to such funds pursuant to Section 7473 of the Government
Code, to be effective until the next such annual filing.

922. The guarantee by the Small Business Administrator that a
surety shall not suffer loss as set forth in the Small Business
Investment Act of 1958, as amended, shall for all purposes and
requirements under this code be deemed a contract of reinsurance
between such surety and an authorized or admitted reinsurer
irrespective of whether or not such guarantee contains all the
provisions required of other reinsurance contracts.

922.1. The Legislature declares its intent that:
(a) In some instances, it is appropriate for the protection of
insureds, insurers, and the public generally, that assuming insurers
be required to provide security for the payment of their reinsurance
obligations.
(b) Where such security is provided and upon the insolvency of the
assuming insurer or initiation of receivership proceedings against
it, the commissioner shall have the authority to determine whether it
is in the best interest of insureds, claimants, and insurers to
retain such security in the United States, to allow the filing of
claims against the assuming insurer in the United States, and to have
such claims valued in a United States proceeding subject to United
States laws.
(c) In furtherance of the protection of insureds, insurers, and
the public generally, the Legislature hereby states that these
matters are fundamental to the business of insurance and hereby
exercises its powers and privileges available pursuant to Sections
1011 and 1012 of Title 15 of the United States Code.

922.2. (a) Credit for reinsurance shall be allowed a domestic
ceding insurer as either an asset or a deduction from liability in
accordance with Sections 922.4 and 922.5 only if the reinsurance
contract contains provisions that provide, in substance, as follows:
(1) The reinsurer shall indemnify the ceding insurer for the risk
it has assumed according to the terms and conditions contained in the
reinsurance contract.
(2) In the event of insolvency and the appointment of a
conservator, liquidator, or statutory successor of the ceding
company, the reinsurance shall be payable to the conservator,
liquidator, or statutory successor on the basis of claims allowed
against the insolvent company by any court of competent jurisdiction
or by any conservator, liquidator, or statutory successor of the
company having authority to allow such claims, without diminution
because of that insolvency, or because the conservator, liquidator,
or statutory successor has failed to pay all or a portion of any
claims. Payments by the reinsurer as set forth in this subdivision
shall be made directly to the ceding insurer or to its conservator,
liquidator, or statutory successor, except where the contract of
insurance or reinsurance specifically provides another payee of such
reinsurance in the event of the insolvency of the ceding insurer.
The reinsurance contract may provide that the conservator,
liquidator, or statutory successor of a ceding insurer shall give
written notice of the pendency of a claim against the ceding insurer
indicating the policy or bond reinsured, within a reasonable time
after such claim is filed and the reinsurer may interpose, at its own
expense, in the proceeding where such claim is to be adjudicated,
any defense or defenses which it may deem available to the ceding
insurer or its conservator, liquidator, or statutory successor. The
expense thus incurred by the reinsurer shall be payable subject to
court approval out of the estate of the insolvent ceding insurer as
part of the expense of conservation or liquidation to the extent of a
proportionate share of the benefit which may accrue to the ceding
insurer in conservation or liquidation, solely as a result of the
defense undertaken by the reinsurer.
(b) Payment pursuant to a reinsurance contract shall be made
within a reasonable time with reasonable provision for verification
in accordance with the terms of the reinsurance agreement. However,
in no event shall the payments be beyond the period required by the
National Association of Insurance Commissioners (NAIC) Accounting
Practices and Procedures Manual.
(c) The original insured or policyholder shall not have any rights
against the reinsurer which are not specifically set forth in the
contract of reinsurance, or in a specific agreement between the
reinsurer and the original insured or policyholder.

922.3. Notwithstanding any other provision of law, credit for
reinsurance, as either an asset or a deduction, shall not be allowed
in any accounting or financial statement of the ceding insurer in
respect to any so-called reinsurance contract unless, in such
contract, the reinsurer undertakes to indemnify the ceding insurer,
not only in form but in fact, against all or a part of the loss or
liability arising out of the original insurance.

922.4. Credit for reinsurance shall be allowed a domestic ceding
insurer as either an asset or a deduction from liability on account
of reinsurance ceded only when the reinsurer meets the requirements
of subdivision (a), (b), (c), or (d). Credit shall be allowed under
subdivision (a) or (b) only for cessions of those kinds or classes of
business that the assuming insurer is licensed or otherwise
permitted to write or assume in its state of domicile or, in the case
of a United States branch of an alien assuming insurer, in the state
through which it is entered and licensed to transact insurance or
reinsurance. If meeting the requirements of subdivision (c), the
requirements of subdivision (e) shall also be met.
(a) Credit shall be allowed when the reinsurance is ceded to an
assuming insurer that is licensed to transact insurance or
reinsurance in this state unless the assuming insurer is the subject
of a regulatory order or regulatory oversight by any state in which
it is licensed based upon a commissioner's determination that the
assuming insurer is in a hazardous financial condition.
(b) (1) Credit shall be allowed when the reinsurance is ceded to
an assuming insurer that is accredited as a reinsurer in this state
unless the assuming insurer is the subject of a regulatory order or
regulatory oversight by any state in which it is licensed based upon
a commissioner's determination that the assuming insurer is in a
hazardous financial condition. An accredited reinsurer is one that
does all of the following:
(A) Files with the commissioner evidence of its submission to this
state's jurisdiction.
(B) Submits to this state's authority to examine its books and
records.
(C) Designates the commissioner or a designated attorney in this
state as its true and lawful attorney upon whom may be served any
lawful process in any action, suit, or proceeding instituted by or on
behalf of the ceding insurer.
(D) Is licensed to transact insurance or reinsurance in at least
one state, or in the case of a United States branch of an alien
assuming insurer, is entered through and licensed to transact
insurance or reinsurance in at least one state.
(E) Files annually with the commissioner a copy of its annual
statement filed with the insurance department of its state of
domicile and a copy of its most recent audited financial statement
and other financial information requested by the commissioner.
(F) Submits a statement, signed and verified by an officer of the
assuming insurer to be true and correct, that discloses whether the
assuming insurer or any affiliated person who owns or has a
controlling interest in the assuming insurer is currently known to be
the subject of any of the following:
(i) Any order or proceeding regarding conservation, liquidation,
or receivership.
(ii) Any order or proceeding regarding the revocation or
suspension of a license or accreditation to transact insurance or
reinsurance in any jurisdiction.
(iii) Any order or proceeding brought by an insurance regulator in
any jurisdiction seeking to restrict or stop the assuming insurer
from transacting insurance or reinsurance based upon a hazardous
financial condition.
The assuming insurer shall provide the commissioner with copies of
any orders or other documents initiating proceedings subject to
disclosure under this paragraph. The statement shall affirm that no
actions, proceedings, or orders subject to this subparagraph are
outstanding against the assuming insurer or any affiliated person who
owns or has a controlling interest in the assuming insurer, except
as disclosed in the statement.
(G) Maintains a surplus as regards policyholders in an amount that
is not less than twenty million dollars ($20,000,000) and whose
accreditation has not been denied by the commissioner within 90 days
of its submission or maintains a surplus as regards policyholders in
an amount less than twenty million dollars ($20,000,000) and whose
accreditation has been approved by the commissioner.
(2) The commissioner may deny or revoke an assuming insurer's
accreditation if the assuming insurer does not meet all of the
standards required of an accredited reinsurer, or if its
accreditation would be hazardous to the policyholders of this state.
In determining whether to deny or revoke accreditation, the
commissioner may consider the qualifications of the assuming insurer
with respect to all the following subjects:
(A) Its financial stability.
(B) The lawfulness and quality of its investments.
(C) The competency, character, and integrity of its management.
(D) The competency, character, and integrity of persons who own or
have a controlling interest in the assuming insurer.
(E) Whether claims under its contracts are promptly and fairly
adjusted and are promptly and fully paid in accordance with the law
and the terms of the contracts.
(3) Credit shall not be allowed a domestic ceding insurer if the
assuming insurer's accreditation has been revoked by the commissioner
after notice and hearing.
(4) The actual costs and expenses incurred by the department to
review a reinsurer's request for accreditation and subsequent reviews
shall be charged to and collected from the requesting reinsurer. If
the reinsurer fails to pay the actual costs and expenses promptly
when due, the commissioner may refuse to accredit the reinsurer or
may revoke the reinsurer's accreditation.
(c) (1) Credit shall be allowed when the reinsurance is ceded to
an assuming insurer that maintains a trust fund in a qualified United
States financial institution as defined in subdivision (b) of
Section 922.7 for the payment of the valid claims of its United
States ceding insurers, their assigns, and successors in interest. To
enable the commissioner to determine the sufficiency of the trust
fund the assuming insurer shall report annually to the commissioner
information substantially the same as that required to be reported on
the NAIC Annual Statement form by licensed insurers or any other
form required by the NAIC.
(2) Credit for reinsurance shall not be granted under this
subdivision unless the form of the trust and any amendments to the
trust have been approved by either:
(A) The commissioner of the state where the trust is domiciled.
(B) The commissioner of another state who, pursuant to the terms
of the trust instrument, has accepted principal regulatory oversight
of the trust.
The trust and any trust amendments shall also be filed with the
commissioner of every state in which the ceding insurer beneficiaries
of the trust are domiciled. Notwithstanding the foregoing, nothing
in this paragraph shall prevent the commissioner from disapproving
the form of the trust if it is not in compliance with this state's
laws and regulations.
(3) Credit for reinsurance shall not be granted under this
subdivision unless the following requirements are met:
(A) The trust instrument shall provide that contested claims shall
be valid, enforceable, and payable out of funds in trust to the
extent remaining unsatisfied 30 days after entry of the final order
of any court of competent jurisdiction in the United States.
(B) The trust shall vest legal title to its assets in the trustees
of the trust for the benefit of the grantor's United States ceding
insurers, their assigns, and successors in interest.
(C) The trust and the assuming insurer shall be subject to
examination as determined by the commissioner.
(D) The trust shall remain in effect for as long as the assuming
insurer, or any member or former member of a group of insurers, shall
have outstanding obligations due under the reinsurance agreements
subject to the trust.
(E) No later than February 28 of each year, the trustees of the
trust shall report to the commissioner in writing setting forth the
balance of the trust and listing the trust's investments at the
preceding year end and shall certify the date of termination of the
trust, if so planned, or certify that the trust shall not expire
within the next 18 months.
(4) The following requirements apply to the following categories
of assuming insurer:
(A) The trust fund for a single assuming insurer shall consist of
funds in trust in an amount not less than the assuming insurer's
liabilities attributable to reinsurance ceded by United States
domiciled ceding insurers, and, in addition, the assuming insurer
shall maintain a trusteed surplus of not less than twenty million
dollars ($20,000,000).
(B) In the case of a group including incorporated and individual
unincorporated underwriters:
(i) For reinsurance ceded under reinsurance agreements with an
inception, amendment, or renewal date on or after August 1, 1995, the
trust shall consist of a trusteed account in an amount not less than
the group's several liabilities attributable to business ceded by
United States domiciled ceding insurers to any member of the group.
(ii) For reinsurance ceded under reinsurance agreements with an
inception date on or before July 31, 1995, and not amended or renewed
after that date, notwithstanding the other provisions of this
article, the trust shall consist of a trusteed account in an amount
not less than the group's several insurance and reinsurance
liabilities attributable to business written in the United States.
(iii) In addition to the trusts required in clauses (i) and (ii),
the group shall maintain in trust a trusteed surplus of which one
hundred million dollars ($100,000,000) shall be held jointly for the
benefit of the United States domiciled ceding insurers of any member
of the group for all years of account.
(iv) The incorporated members of the group shall not be engaged in
any business other than underwriting as a member of the group and
shall be subject to the same level of regulation and solvency control
by the group's domiciliary regulator as are the unincorporated
members.
(v) The group shall, within 90 days after its financial statements
are due to be filed with the group's domiciliary regulator, provide
to the commissioner an annual certification by the group's
domiciliary regulator of the solvency of each underwriter member; or
if a certification is unavailable, financial statements prepared by
independent public accountants of each underwriter member of the
group.
(C) In the case of a group of incorporated insurers under common
administration, the group shall meet all of the following
requirements:
(i) Have continuously transacted an insurance business outside the
United States for at least three years immediately prior to making
application for accreditation and be in good standing with its
domiciliary regulator.
(ii) Demonstrate that individual insurer members maintain
standards and financial conditions reasonably comparable to admitted
insurers.
(iii) Maintain aggregate policyholders' surplus of at least ten
billion dollars ($10,000,000,000).
(iv) Maintain a trust fund in an amount not less than the group's
several liabilities attributable to business ceded by United States
domiciled ceding insurers to any member of the group pursuant to
reinsurance contracts issued in the name of such group.
(v) In addition, maintain a joint trusteed surplus of which one
hundred million dollars ($100,000,000) shall be held jointly for the
benefit of United States ceding insurers of any member of the group
as additional security for these liabilities. The commissioner shall
have the authority to require additional amounts to be held in the
trust as a condition for initial or continued accreditation if the
commissioner determines that these additional amounts are required
for the protection of ceding insurers.
(vi) Within 90 days after its financial statements are due to be
filed with the group's domiciliary regulator, make available to the
commissioner an annual certification of each underwriter member's
solvency by the member's domiciliary regulator, and financial
statements for each underwriter member of the group prepared by its
independent public accountant.
(5) The actual costs and expenses incurred by the department to
review the trusts and subsequent amendments established or maintained
pursuant to this subdivision shall be charged to and collected from
the requesting reinsurer or group. If the reinsurer or group fails to
pay the actual costs and expenses promptly when due, the
commissioner may refuse to allow credit for reinsurance ceded to that
reinsurer or group.
(d) Credit shall be allowed when the reinsurance ceded to an
assuming insurer not meeting the requirements of subdivision (a),
(b), or (c), but only as to the insurance of risks located in
jurisdictions where the reinsurance is required by applicable law or
regulation of that jurisdiction.
(e) If the assuming insurer is not licensed or accredited to
transact insurance or reinsurance in this state, the credit permitted
by subdivision (c) shall not be allowed unless the assuming insurer
does both of the following:
(1) Submits to the jurisdiction of any court of competent
jurisdiction in any state of the United States, complies with all
requirements necessary to give such court jurisdiction, and abides by
the final decision of the court or of any appellate court in the
event of an appeal.
(2) Designates the commissioner or a designated attorney in this
state as its true and lawful attorney upon whom may be served any
lawful process in any action, suit, or proceeding instituted by or on
behalf of the ceding insurer.
This subdivision is not intended to conflict with or override the
obligation of the parties to a reinsurance agreement to arbitrate
their disputes, if this obligation is created in the agreement.
(f) If the assuming insurer does not meet the requirements of
subdivision (a), (b), or (d), the credit permitted by subdivision (c)
shall not be allowed unless the assuming insurer agrees in the trust
agreement that notwithstanding any other provision in the trust
instrument, if the trust fund is inadequate because it contains an
amount less than the amount required by paragraph (4) of subdivision
(c), or if the grantor of the trust has been declared insolvent or
placed into receivership, rehabilitation, liquidation, or similar
proceedings under the laws of its state or country of domicile:
(1) The trustee shall comply with an order of the commissioner
with regulatory oversight over the trust or with an order of a court
of competent jurisdiction directing the trustee to transfer to the
commissioner with regulatory oversight all of the assets of the trust
fund.
(2) The assets shall be distributed by, and insurance claims shall
be filed with and valued by, the commissioner with regulatory
oversight in accordance with the laws of the state in which the trust
is domiciled that are applicable to the liquidation of domestic
insurance companies.
(3) If the commissioner with regulatory oversight determines that
the assets of the trust fund or any part thereof are not necessary to
satisfy the claims of the United States ceding insurers of the
grantor of the trust, the assets or part thereof shall be returned by
the commissioner with regulatory oversight to the trustee for
distribution in accordance with the trust agreement.
(4) The grantor hereby waives any right otherwise available to it
under United States law that is inconsistent with this provision.

922.5. (a) An asset or a deduction from liability for reinsurance
ceded by a domestic insurer to an assuming insurer not meeting the
requirements of Section 922.4 shall be allowed in an amount not
exceeding the liabilities carried by the ceding insurer to the extent
of either of the following:
(1) The asset or deduction is not greater than the amount of funds
held by the ceding insurer under a reinsurance contract with that
assuming insurer as security for the payment of obligations
thereunder and such funds are held in the United States under the
exclusive control of the ceding insurer.
(2) The asset or deduction is not greater than the amount of funds
held in a trust, satisfactory to the commissioner, on behalf of the
ceding insurer under a reinsurance contract with such assuming
insurer as security for the payment of obligations thereunder and is
held in a qualified United States financial institution, as defined
in subdivision (b) of Section 922.7, subject to withdrawal solely by
the ceding insurer.
The security under this subdivision may be in the form of cash or
securities authorized as general investments under Article 3
(commencing with Section 1170) of Chapter 2, or securities listed by
the Securities Valuation Office of the NAIC, qualifying as admitted
assets under this code and with liquidity meeting the requirements of
Section 706.5.
(b) An asset or a deduction from liability for reinsurance ceded
by a domestic insurer to an assuming insurer not meeting the
requirements of Section 922.4 shall be allowed in an amount not
exceeding the liabilities carried by the ceding insurer to the extent
that security is provided in the form of letters of credit,
satisfactory to the commissioner, which shall be:
(1) Clean, irrevocable, unconditional letters of credit, issued or
confirmed by qualified United States financial institutions, as
defined in subdivision (a) of Section 922.7, effective no later than
December 31st in respect of the year for which filing is being made,
and in the possession of the ceding insurer on or before the filing
date of its annual statement.
(2) Letters of credit meeting applicable standards of issuer
acceptability as of the dates of their issuance or confirmation and
shall, notwithstanding the issuing or confirming institutions'
subsequent failure to meet applicable standards of issuer
acceptability, continue to be acceptable as security until their
expiration, extension, renewal, modification, or amendment, whichever
first occurs.

922.6. (a) Unless credit for reinsurance or deduction from
liability is disallowed pursuant to Section 922.3 or 923, credit for
reinsurance or deduction from liability shall be allowed a foreign
ceding insurer to the extent credit has been allowed by the ceding
insurer's state of domicile if either:
(1) The state of domicile is accredited by the NAIC.
(2) Credit or deduction from liability would be allowed under this
statute if the foreign ceding insurer were domiciled in this state.
(b) Notwithstanding subdivision (a), credit for reinsurance or
deduction from liability may be disallowed upon a finding by the
commissioner that either the financial condition of the reinsurer, or
the collateral or other security provided by the reinsurer, does
not, in substance, satisfy the credit for reinsurance requirements
applicable to ceding insurers domiciled in this state.

922.7. (a) For purposes of subdivision (b) of Section 922.5, a
"qualified United States financial institution" means an institution
that complies with all of the following:
(1) Is organized or in the case of a United States office of a
foreign banking organization, licensed, under the laws of the United
States or any state thereof.
(2) Is regulated, supervised, and examined by United States
federal or state authorities having regulatory authority over banks
and trust companies.
(3) Has been determined by the commissioner, or, in the discretion
of the commissioner, the Securities Valuation Office of the NAIC, to
meet such standards of financial condition and standing as are
considered necessary and appropriate to regulate the quality of
financial institutions whose letters of credit will be acceptable to
the commissioner.
(b) A "qualified United States financial institution" means, for
purposes of those provisions of this law specifying those
institutions that are eligible to act as a fiduciary of a trust, an
institution that is both:
(1) Organized, or in the case of a United States branch or agency
office of a foreign banking organization, licensed, under the laws of
the United States or any state thereof and has been granted
authority to operate with fiduciary powers.
(2) Regulated, supervised, and examined by federal or state
authorities having regulatory authority over banks and trust
companies.

922.8. (a) The commissioner, after notice, comment period, and a
hearing if requested by more than 10 affected insurers, may issue a
bulletin setting forth reasonable requirements for the allowance of
reinsurance as an asset or deduction from liability consistent with
Sections 922.4 to 922.6, inclusive, including the following:
(1) Filing requirements for an accredited assuming insurer.
(2) Accreditation requirements for an assuming insurer with less
than a twenty million dollars ($20,000,000) surplus as regards
policyholders.
(3) The definition of "liabilities" as used in Sections 922.4 and
922.5.
(4) Investment guidelines for trust funds established and
maintained pursuant to subdivision (c) of Section 922.4.
(5) Definitions and required or permitted conditions for trust
funds established and maintained pursuant to Section 922.5.
(6) Requirements of letters of credit established and maintained
pursuant to Section 922.5.
(b) On or before January 1, 1998, the commissioner shall notify
the Legislature that the bulletin has been promulgated so that the
Legislature is able to ensure the commissioner's compliance with the
requirements of this subdivision.
(c) The bulletin authorized by this section shall have the same
force and effect, and may be enforced by the commissioner to the same
extent and degree, as regulations issued by the commissioner until
the time that the commissioner issues additional or amended
regulations pursuant to subdivision (d).
(d) The commissioner shall adopt regulations implementing the
provisions of this law, that shall supersede the bulletin authorized
by this section, no later than December 31, 2001.

922.9. Sections 922.4 and 922.5 shall apply to all cessions on and
after January 1, 1997, under reinsurance contracts that have had an
inception, anniversary, or renewal date not less than six months
after that date.

923. The commissioner shall require every insurer which is required
to file an annual or quarterly statement to use the statement blanks
and instructions thereto for the appropriate year adopted by the
National Association of Insurance Commissioners. The statements shall
be completed in conformity with the Accounting Practices and
Procedures Manual adopted by the National Association of Insurance
Commissioners, to the extent that the practices and procedures
contained in the manual do not conflict with any other provision of
this code. The commissioner may make changes from time to time in the
form of the statements and the number and method of filing reports
as seem to him or her best adapted to elicit from the insurers a true
exhibit of their condition. The commissioner shall notify each
insurer of any changes from the National Association of Insurance
Commissioners' statement blanks which the commissioner has determined
pursuant to this section to be appropriate.

923.5. Each insurer transacting business in this state shall at all
times maintain reserves in an amount estimated in the aggregate to
provide for the payment of all losses and claims for which the
insurer may be liable, and to provide for the expense of adjustment
or settlement of losses and claims.
The reserves shall be computed in accordance with regulations made
from time to time by the commissioner. The promulgation of the
regulations by the commissioner, or any changes thereto or amendments
thereof, shall be in accordance with the procedure provided in
Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3
of Title 2 of the Government Code. The commissioner shall make the
regulations upon reasonable consideration of the ascertained
experience and the character of such kinds of business for the
purpose of adequately protecting the insured and securing the
solvency of the insurer.
The commissioner may prescribe the manner and form of reporting
pertinent information concerning the reserves provided for in this
section.
This section shall not apply to life insurance, title insurance,
disability insurance, mortgage insurance, or mortgage guaranty
insurance.

924. The commissioner shall collect a late filing fee of three
hundred thirty-six dollars ($336) from any admitted insurer that
fails to make and file in the commissioner's office within the time
prescribed by law any statements or stipulations required by this
code. After the first month, the commissioner shall also collect a
late filing fee of four hundred four dollars ($404) for each and
every month or fractional part of a month thereafter that the insurer
continues to transact the business of insurance until those
statements and stipulations are filed.

925. Upon request of the commissioner, and at intervals as
prescribed by him or her, any insurer that appears to the
commissioner to require immediate regulatory attention shall provide
to the commissioner supplemental accounting, financial, and actuarial
information. The commissioner may request that an insurer select and
retain an independent certified public accountant, certified public
accountant corporation, an actuary corporation, or an independent
actuary satisfactory to the commissioner, if that person has not
already been retained by the insurer, whenever the information
supplied or likely to be supplied is not satisfactory or acceptable
to the commissioner, or, whenever the person who would be responsible
for that preparation of that information has previously provided
information that was not satisfactory or acceptable to the
commissioner. The commissioner may select or retain an independent
certified public accountant, a certified public accountant
corporation, an actuary corporation, or an independent actuary, if
the insurer does not within a reasonable time make the selection as
requested by the commissioner. If the information is prepared by an
independent certified public accountant or independent actuary, or
other independent professional financial corporation or person, the
corporation or person shall examine and render an opinion upon that
supplemental information.

925.1. (a) All supplemental information, work papers and other
relevant documents of the independent certified public accountant, or
independent actuary, or other independent professional financial
person and the insurer relevant to information provided to the
commissioner pursuant to Sections 925 to 925.2, inclusive, shall be
made available by the insurer for review by the commissioner upon
request at the insurer's office, at the commissioner's office, or any
other reasonable place designated by the commissioner.
(b) All supplemental information, relevant work papers and other
relevant documents of the certified public accountant or actuary
shall be retained for a period of not less than five years from the
date of the report. The certified public accountant or the actuary
shall make that information available to the insurer upon the
reasonable request of the commissioner made to the insurer, except
when that information is subject to the right against
self-incrimination or other relevant privileges.
(c) Every insurer shall authorize, in writing, the independent
certified public accountant, independent actuary, or other
independent professional financial person retained or engaged by it
to provide to the commissioner all information subject to Section 925
to 925.2, inclusive.

925.2. The commissioner may prescribe the subject matter and form
of reporting supplemental information and the subject matter of
opinions.

925.3. All supplemental information provided or made available to
the commissioner pursuant to Sections 925 to 925.2, inclusive,
including work papers and other relevant documents of the independent
certified public accountants or, independent actuary or other
independent professional financial person and the insurer relevant to
that information, shall be received in confidence within the meaning
of subdivision (d) of Section 6254 of the Government Code and exempt
from the California Public Records Act (Chapter 3.5 (commencing with
Section 6250) of Division 7 of Title 1 of the Government Code).
Additionally, that information shall not be subject to subpoena or
subpoena duces tecum.

925.4. Nothing contained herein shall be deemed in any manner to
limit, restrict or abridge the powers of the commissioner to examine
insurers, to inquire into their financial condition or to obtain
supplemental information in accordance with any other provision of
this code.