Section 1401.5.

(a) When the commissioner finds after a public hearing that a reciprocal or interinsurance exchange has at all times during any consecutive five-year period terminating on December 31, 1964, or on the last day of any subsequent calendar year, as shown by its annual statements, as filed or as adjusted by the commissioner, as the case may be, maintained a surplus of admitted assets over all liabilities of at least three million dollars ($3,000,000) the commissioner may make an order that such reciprocal or interinsurance exchange need not obtain the certificate provided in Section 1401 and that its subscribers shall thereafter in perpetuity have no liability for assessment on policies issued or renewed at any time after such order becomes final or may, if the reciprocal desires not to become nonassessable, issue a certificate of capability to reinsure. To request such an order such reciprocal or interinsurance exchange shall file a petition with the commissioner, on a form prescribed by the commissioner. The filing fee for such a petition shall be two hundred thirty-six dollars ($236). The commissioner shall give notice of such hearing in the insurance press and in such other ways as he deems advisable and to the extent he deems advisable. Such an order is subject to the provisions of Section 12940 and any person with sufficient relevant interest shall be authorized to bring any permitted action thereunder.

(b) When any such order of the commissioner becomes final any domestic reciprocal or interinsurance exchange obtaining such an order shall no longer be subject to or entitled to the benefits of: subdivision (c) of Section 1307, subdivision (b) of Section 1374, and Article 6 (commencing with Section 1390) of this chapter.

(c) At such time as all reciprocal or interinsurance exchanges conducting insurance business in this state are by law governed for all purposes as to required minimum surplus (including that for admission, amendment of certificate of authority and solvency) by the same standards for minimum paid-in capital and surplus as are then applicable to capital stock insurers, any domestic reciprocal or interinsurance exchange may obtain the order provided in subdivision (a), subject to the provisions in subdivision (a) by showing that it has maintained such minimum paid-in capital and surplus requirement applicable to capital stock insurers for at least five consecutive years in lieu of the three million dollars ($3,000,000) surplus prescribed in subdivision (a).

(d) If the power of attorney or any policy of any domestic reciprocal or interinsurance exchange obtaining the order provided by subdivision (a) contains language directly or indirectly creating a liability for assessment, in respect to policies issued prior to or issued after such an order becomes final such power of attorney and all such policies shall be deemed in law to have been amended to delete and repeal any and all such assessment provisions as of the date such order becomes final without any further action on the part of such a reciprocal or interinsurance exchange, its subscribers, its attorney in fact or the body exercising the subscriber's rights.

(Amended by Stats. 1986, Ch. 638, Sec. 1.)