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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 6. INSURANCE COVERING LAND |
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Chapter 2A. Mortgage Guaranty Insurance |
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ARTICLE 4. Limitations and Restrictions for Transacting Business |
Section 12640.091.
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(a) In order to qualify as a segregated trust under subdivision (d) of Section 12640.09, a trust shall meet all of the following requirements:
(1) Be established by an insurer or reinsurer for the benefit of the ceding mortgage guaranty insurer.
(2) Have the trust assets located in the mortgage guaranty insurer's state of domicile, in the State of California, or in another jurisdiction which is approved by the commissioner.
(3) Be funded by assets permitted by Article 3 (commencing with Section 1170) of Chapter 2 of Part 2 of Division 1, or by tax and loss bonds purchased pursuant to Section 832(e) of the Internal Revenue Code.
(4) Be subject to withdrawals only by, and under the control of, the ceding mortgage guaranty insurer provided that written notification with adequate supporting documentation is filed with the commissioner within 15 calendar days after the withdrawal.
(5) Consent to and be subject to examination by the commissioner.
(6) Appoint an agent for service of process in the State of California and file the appointment with the commissioner within 30 calendar days after the effective date.
(b) The trust agreement and any amendments to it shall be filed with the commissioner within 30 calendar days after its effective date. The commissioner may order a prospectively applicable modification, correction, disapproval, or termination of any trust arrangement, agreement, or amendment which fails to meet the requirements set forth in this chapter. Any order of the commissioner shall be in writing and shall specify the reasons for the modifications, corrections, disapproval, or termination.
(c) The ceding mortgage guaranty insurer shall make quarterly, annual, and interim reports on the segregated trust account at the time as they are required or requested by the commissioner on forms prescribed by the commissioner.
(d) The commissioner may adopt rules and regulations necessary to carry out the provisions of this section including appropriate rules or regulations to assure that the trust assets are legally segregated, reasonably liquid, secure, and accessible.