SECTIONS 939-956 - California Statutes

INSURANCE CODE

SECTION 939-956

939. Except as otherwise expressly provided, all deposits of
securities with the commissioner shall be subject to the provisions
of this article.

940. The commissioner shall accept and hold securities in trust for
the policyholders or policyholders and creditors of an insurer and
for their benefit, whenever (a) the law of another state or of a
foreign country requires such a deposit with an officer of this state
as a prerequisite to transacting insurance business in that state or
country, or (b) the law of this state requires such a deposit with
an officer of this state.

940.1. The commissioner shall require the payment of fifty-eight
dollars ($58) in lawful money of the United States in advance for
receiving and processing securities or deposit schedules for
securities deposited pursuant to this article. An additional fee of
twenty-nine dollars ($29) shall be payable for each withdrawal,
substitution, or any other change in the securities comprising such
deposit. There shall be no other or additional fee for attaching the
commissioner's seal to a securities deposit schedule for a deposit
under this article.

941. Such deposited securities shall not be estimated above their
par value nor above their market value, except that preferred stock
shall be estimated only at its market value.

942. The commissioner shall permit a deposit of those securities in
the State Treasury, subject to the provisions of Section 11691, if
applicable. The securities deposited with the Treasurer shall be
maintained in electronic book entry or certificate form as security
for policyholders or policyholders and creditors of the insurer to
whom they respectively belong. The state is responsible for the
custody and safe return of any money or securities so deposited. The
Treasurer shall deposit these moneys under the provisions of Sections
16370 and 16375 of the Government Code.

943. So long as the insurer continues solvent the commissioner
shall permit it to collect the interest or dividends on the
securities so deposited, and from time to time to withdraw any such
securities on depositing other securities in the stead of those to be
withdrawn. Such new securities shall be of the same value as those
withdrawn and of the character mentioned in this article.

944. Securities deposited under the provisions of this article
shall not be withdrawn from the State treasury except upon the
written order of the insurer making the deposits, with the
endorsement of the commissioner thereon, or upon the order of some
court of competent jurisdiction.

945. If the deposit is of mortgages, it shall be accompanied either
by full abstracts of title with the fees for examination of title,
or by policies of title insurance or certificates of title issued by
an admitted title insurer. The fees for appraisal of the property
shall be paid by the insurer making the deposit. In any case where he
ascertains that the expense thereof would not be unreasonable or
such as to make the deposit impracticable, the commissioner may
require a policy of title insurance or a guaranty that the abstract
is correct and that it shows title to be in the proper parties,
issued by a corporation authorized to issue such policies or
guaranties in the State in which the security or some part thereof is
located.

946. If the deposit is of stocks or bonds, it shall be accompanied
by the fees necessary for the appraisal thereof, except as otherwise
provided by Article 3, Chapter 1, Part 2, Division 1, of this code.

948. Whenever an insurer has deposited with the commissioner the
requisite security, in conformity with the requirements of this
article, the commissioner shall issue to such insurer, under his
official seal, a certificate of such deposit for each State or
country requiring such certificate. Such certificate shall state the
items and amount of securities so deposited, and their value.

949. The commissioner shall require the payment of twenty-nine
dollars ($29) in lawful money of the United States, in advance, as a
fee for each certificate issued pursuant to this article.

950. Whenever such a depositing insurer has paid, canceled, or
reinsured all its unexpired policies outstanding in this State, and
all its liabilities under such policies are extinguished, or assumed
by other responsible insurers, it may apply to the commissioner for
return of its deposit. Such application shall be in writing and
verified. If on such application, and from an examination of the
books of the insurer and of its officers under oath, the commissioner
is satisfied that all of its policies are so paid, canceled,
extinguished, or reinsured, he shall deliver up to the insurer the
securities deposited.

951. Pending such examination the securities requested to be
withdrawn may continue subject to withdrawal and substitution as
provided by section 943.

952. Whenever the laws of any other state or country, by reason of
which Section 940 is brought into force, are repealed and abrogated,
then any deposit with the commissioner under and by reason of that
section shall be delivered up to the depositing insurer.

953. Whenever a domestic insurer deposits securities with an
officer of this State, in order to enable it to do business in
another State pursuant to the laws of such other State, if such
insurer thereafter ceases to do business in such other State and
files conclusive evidence that all policies written in such other
State have expired or been paid, canceled or reinsured, the
securities shall on demand be returned to the depositing insurer.

954. The commissioner shall make an annual examination of the
securities received by him from each insurer. If it appears at any
time that the securities deposited by any such insurer amount to less
than the sum required for the purposes for which the deposit was
made, he shall notify the insurer thereof. Unless the deficiency is
made up within thirty days after the notice, the commissioner shall
revoke the insurer's certificate of authority, countermand all the
certificates issued to the insurer under this article, and give
notice thereof to the officers of the several States to whom the
certificate has been transmitted.

955. All appraisal fees collected by the commissioner under the
provisions of this article shall be paid into the State treasury in
trust and withdrawn as provided by law for withdrawal of trust funds
from the State treasury.

956. An account or accounts in one or more banks or savings and
loan associations the accounts of which are insured by an agency or
instrumentality of the federal government shall be accepted as
securities comprising any part of any deposit made with the
commissioner.