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California Law (Last Updated: March 4, 2014) |
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Insurance Code - INS |
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Division 2. CLASSES OF INSURANCE |
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Part 4. MISCELLANEOUS CASUALTY INSURANCES |
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Chapter 1. Surety Insurers on Reserve Basis; Capital Requirements and Permitted Insurances |
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ARTICLE 5. Financial Guaranty Insurance |
Section 12115.5.
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(a) If an admitted financial guaranty insurance corporation fails to maintain a rating in any of the top three generic rating classifications by any securities rating agency acceptable to the commissioner, it shall immediately send written notification of this failure to both the commissioner and the insurance regulatory authority in its state of domicile.
(b) (1) If an admitted financial guaranty insurance corporation fails to maintain a rating at least equal to the highest notch in the fourth generic rating classification by any securities rating agency acceptable to the commissioner, the insurer shall prepare and file with the commissioner a two-year business plan, in reasonable detail, together with other information that the commissioner requires. The plan shall be filed within 45 days of the date when the insurer fails to maintain that rating.
(2) In response to that failure, the commissioner may conduct any examination or analysis of the insurer's assets, liabilities, and operations, including its pricing, that he or she deems necessary.
(3) After reviewing the business plan and conducting any examination or analysis, the commissioner may issue a corrective order specifying the corrective measures that he or she determines to be required, and the insurer shall implement those measures. In determining corrective measures, the commissioner may take into account the factors that he or she deems relevant with respect to the insurer, including the results of the examination or analysis.
(c) If an admitted financial guaranty insurance corporation fails to maintain an investment grade rating by any securities rating agency acceptable to the commissioner, it shall not do either of the following without the commissioner's specific prior written approval:
(1) If domiciled in this state, accept additional risks or issue new policies anywhere.
(2) If domiciled in another state, accept additional risks in this state or issue new policies insuring risks in this state.