BILL NUMBER: AB 444 CHAPTERED 09/12/03 CHAPTER 352 FILED WITH SECRETARY OF STATE SEPTEMBER 12, 2003 APPROVED BY GOVERNOR SEPTEMBER 11, 2003 PASSED THE SENATE AUGUST 25, 2003 PASSED THE ASSEMBLY MAY 29, 2003 AMENDED IN ASSEMBLY MAY 23, 2003 INTRODUCED BY Assembly Member Vargas FEBRUARY 14, 2003 An act to amend Sections 10506.4, 10507.5, and 12957 of the Insurance Code, relating to life insurers. LEGISLATIVE COUNSEL'S DIGEST AB 444, Vargas. Life insurers: guarantees. Existing law allows a life insurer meeting certain criteria to guarantee, pursuant to an approved policy, contract, or agreement, the value of the assets allocated to a separate account, which as provided under the applicable policy, contract, or agreement is not chargeable with liabilities arising out of any other business the company may conduct, or the investment results thereof, or the income thereon, or the benefits payable pursuant to the approved policy, contract, or agreement, and may transfer to the separate account cash to maintain its reserves for those guarantees, as specified. Existing law allows the commissioner to issue a bulletin setting forth reasonable requirements for insurers issuing policies, contracts, or agreements containing these guarantees. Existing law provides that these policies, contracts, and agreements must be filed by the insurer with the commissioner before being marketed or issued in this state. This bill would specify an alternative to this filing and approval procedure for these policies, contracts, and agreements. It would permit an insurer to file with the commissioner the proposed form of the policy, contract, or agreement, together with an officer's certificate, accompanied by an actuarial certification and demonstration, and other supporting material, all in accordance with procedures set forth in the bulletin. New information would be required to be included in the bulletin, which the bill would permit to be amended by the commissioner, as specified. The bill would permit the insurer to issue and deliver the policy, contract, or agreement the day following approval by the commissioner of this alternative filing. Absent explicit approval, it would permit an insurer to issue and deliver the policy, contract, or agreement 30 working days after a completed alternative filing, unless the commissioner gives a specified written objection or notification to the insurer. The bill would require the bulletin to set forth procedures for an insurer to respond to the objections. It would authorize the commissioner to suspend an insurer's authority to use the policy, contract, or agreement approved under this alternative procedure, and declare the insurer ineligible to utilize the procedure for a period not to exceed 3 years from the date of the filing of the policy, contract, or agreement, if the filing is improper, as specified. It would permit a policy not approved pursuant to these new provisions to be refiled under the original filing procedures. Existing law allows an insurer to deliver or issue for delivery one or more policies, contracts, or agreements that establish the insurer's obligations under the policies, contracts, or agreements by reference to a portfolio of assets that is not owned by or possessed by the insurer, if certain requirements are met. Existing law requires the commissioner to issue a bulletin setting forth reasonable requirements for insurers that issue these policies, contracts, or agreements. This bill would specify that these policies, contracts, and agreements that are not otherwise subject to filing under applicable law and regulation, shall be filed by the insurer with the commissioner before being marketed or issued in this state, and would authorize the commissioner to disapprove them as provided. This bill would permit, rather than require, the commissioner to issue the bulletin with regard to this type of policy, contract, or agreement, and would specify the bulletin's contents in a manner making it similar to the bulletin for separate account asset value guarantee policies, contracts, and agreements, as specified above. If the commissioner issued this bulletin regarding these policies, contracts, and agreements establishing insurer obligations by reference to a portfolio not owned or possessed by the insurer, the bill would permit an insurer to use an alternative filing mechanism with regard to these policies based on the bulletin. This alternative filing procedure would be analogous to the alternative filing procedure permitted for separate account asset value guarantee insurance, as specified above. Existing law provides that the commissioner may not withdraw approval of a policy except on specified grounds, and must provide a hearing on request to an insurer facing withdrawn approval within 30 days of demand, or the withdrawal is ineffective. Existing law, prior to an amendment leaving an inaccurate cross-reference, exempted certain policies and documents required to be approved by the commissioner and subject to a specified approval withdrawal procedure from this alternative approval withdrawal procedure. This bill would correct the inaccurate cross-reference, and would additionally exempt policies, contracts, and agreements regarding separate account asset value guarantees and establishing insurer obligations by reference to a portfolio not owned or possessed by the insurer from the application of these approval withdrawal provisions. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 10506.4 of the Insurance Code is amended to read: 10506.4. (a) An admitted life insurer that is financially qualified pursuant to subdivision (b) and complies with the provisions of this section and those of Section 10506 that expressly refer to this section or are not inconsistent with it, may guarantee, pursuant to an approved policy, contract, or agreement, the value of the assets allocated to a separate account, which as provided under the applicable policy, contract, or agreement is not chargeable with liabilities arising out of any other business the company may conduct, or the investment results thereof, or the income thereon, or the benefits payable pursuant to the approved policy, contract, or agreement, and may transfer to the separate account cash to maintain its reserves for those guarantees pursuant to paragraph (2) of subdivision (f) of Section 10506. The general account of the insurer shall be paid reasonable and sufficient compensation not less frequently than quarterly, for risks and other expenses incurred, from any separate account that receives a guarantee authorized by this section. (b) For the purposes of this section "approved policy, contract, or agreement" means a policy, contract, or agreement, the form of which has been approved by the commissioner, for issue or marketing in this state, and which in addition to meeting the requirements of all pertinent provisions of this code, meets the requirements of one of the following paragraphs: (1) A policy, contract, or agreement meets the requirements of this paragraph if it satisfies and is expected to satisfy over the full life of the policy, contract, or agreement all of the following conditions: (A) The weighted asset valuation reserve factor for the assets held in the separate account pursuant to the terms of the policy, contract, or agreement shall not exceed 2 percent. (B) Guarantees of interest that extend beyond 14 months at any time shall be no greater than 3 percent per annum. (C) Any reserves required because the contract value is less than the reserves required for the policy, contract, or agreement shall be maintained in a separate identified segment of the insurer's general account or otherwise segregated within the general account, or be held in a separate account all of the assets of which shall also be chargeable with liabilities arising out of other business of the insurer. (D) In the event the policy, contract, or agreement provides for withdrawals (other than those resulting from an election by a participant under a pension, retirement, retirement medical benefit, or profit-sharing plan) of amounts other than on the conversion date or guarantee effective date, if any, the withdrawals shall be made in either of the following manners: (i) In a lump sum in an amount not to exceed the market value. (ii) In one or more contract value installments the present value of which is equal to or less than the market value of the aggregate withdrawal. (2) A policy, contract, or agreement meets the requirements of this paragraph if it satisfies and is expected to satisfy over the full life of the policy, contract, or agreement all of the following conditions: (A) The weighted asset valuation reserve factor for the assets held in the separate account pursuant to the terms of the policy, contract, or agreement shall not exceed 4 percent. (B) The market value of the assets held in the separate account plus any reserves described in subparagraph (C) shall exceed the current aggregate liabilities determined by discounting the guaranteed benefit liability cashflows at the rate of 105 percent of the then current yields as quoted on United States Government issued securities having substantially similar maturities by at least the following applicable amount: (i) For assets consisting of debt instruments, an amount equal to the asset valuation reserve "maximum reserve factor," provided, however, that the factor shall be reduced by 50 percent for the purpose of this calculation if the difference in durations of the assets and liabilities (as confirmed in the actuarial statement referred to in subparagraph (B) of paragraph (1) of subdivision (d)) are one year or less. (ii) For assets that are not debt instruments, 20 percent. (C) Any reserves required because the contract value is less than the reserves required for the policy, contract, or agreement shall be maintained in a separate identified segment of the insurer's general account or otherwise segregated within the general account, or be held in a separate account all of the assets of which shall also be chargeable with liabilities arising out of other business of the insurer. (D) In the event the policy, contract, or agreement provides for withdrawals (other than those resulting from an election by a participant under a pension, retirement, retirement medical benefit, or profit-sharing plan) of amounts other than on the conversion date or guarantee effective date, if any, the withdrawals shall be made in either of the following manners: (i) In a lump sum in an amount not to exceed the market value. (ii) In one or more contract value installments the present value of which is equal to or less than the market value of the aggregate withdrawal. (3) A policy, contract, or agreement meets the requirements of this paragraph if it satisfies and is expected to satisfy over the full life of the policy, contract, or agreement all of the following conditions: (A) The guarantees contained in the policy, contract, or agreement applicable to the value of the assets held in the separate account by the insurer shall be based upon a publicly available interest rate series or an index of the aggregate market value of a group of publicly traded financial instruments, the interest rate series or index to be specified in the policy, contract, or agreement. (B) Assets held in the separate account and the accumulations thereon shall be invested in accordance with the requirements of subdivision (a) of Section 10506 applicable to policies, contracts, or agreements governed by this section and shall comply with all of the following: (i) Interest-bearing bonds, notes, or other obligations shall be publicly traded or meet applicable requirements of the United States Securities and Exchange Commission enabling the securities to be publicly traded. (ii) Investments in capital stock shall be traded on an exchange regulated by the United States Securities and Exchange Commission, and investments in any futures contracts with respect thereto shall be traded on an exchange regulated under the Commodities Exchange Act (Title 7, United States Code). (iii) Issuers of interest-bearing obligations held in the separate account must be rated by an independent nationally recognized financial rating agency approved by the commissioner or by the Securities Valuation Office of the National Association of Insurance Commissioners. (iv) With respect to any investments in shares of investment companies registered under the federal Investment Company Act of 1940 (15 U.S.C. Sec. 80a-1 et seq.) the assets of the entity must qualify as investments directly allowed for separate accounts pursuant to the requirements of subdivision (a) of Section 10506 applicable to policies, contracts, or agreements governed by this section. (v) The type, quality, industry diversification, prepayment characteristics, expected duration, and other factors pertaining to investments shall be set forth in the approved method of operations which shall contain a demonstration satisfactory to the commissioner that the investments are likely to achieve the performance of the applicable index or interest rate series. (C) The period between the commencement date of the guaranty of the value of the assets held in the separate account and the conversion date, if any, shall not exceed five years. (D) Any reserves required because the contract value is less than the reserves required for the policy, contract, or agreement shall be maintained in a separate identified segment of the insurer's general account or otherwise segregated within the general account, or be held in a separate account all of the assets of which shall also be chargeable with liabilities arising out of other business of the insurer. (E) In the event the policy, contract, or agreement provides for withdrawals (other than those resulting from an election by a participant under a pension, retirement, retirement medical benefit, or profit-sharing plan) of amounts other than on the conversion date or guarantee effective date, if any, the withdrawals shall be made in either of the following manners: (i) In a lump sum in an amount not to exceed the market value. (ii) In one or more contract value installments the present value of which is equal to or less than the market value of the aggregate withdrawal. (4) For the purposes of this section, "conversion date" means the date, if any, specified in the policy, contract, or agreement upon which the assets held pursuant to it shall be converted or applied to the purchase of annuities or returned to the owner of the policy, contract, or agreement, or its designee. (5) For the purposes of this section, the "asset valuation reserve factor" for each asset will be determined by the application of the asset valuation reserve factor, "maximum reserve factor," as contained in the National Association of Insurance Commissioners (NAIC) Life, Accident and Health Annual Statement Instructions (Instructions) and Valuation of Securities Manual, or if not contained therein, an asset valuation reserve factor of 20 percent shall be assigned. To determine the weighted asset valuation reserve factor, the asset valuation reserve factor shall be applied to the market value of each asset. (6) For the purposes of this section, "market value" means the policy, contract, or agreement's proportionate share of the actual market value of the separate account at the time of withdrawal or if the determination of market value is by formula, the formula shall be set forth in the policy, contract, or agreement and shall be designed to closely match actual market value. (7) For the purposes of this section, "guarantee effective date" means the date guarantees authorized by this section may result in payments from the general account to the separate account. (c) No admitted life insurer may issue or market in this state, nor may any domestic life insurer issue or market anywhere, a policy, contract, or agreement, or coverage thereunder by certificate or otherwise, which contains the guarantees referred to in subdivision (a) unless both of the following apply: (1) It has received from the commissioner authority to issue policies or contracts providing for the payment of variable benefits pursuant to subdivision (h) of Section 10506. (2) The commissioner has determined after application by the insurer in the form and content as the commissioner may require, review of the insurer's applicable proposed method of operations relating to policies, contracts, or agreements containing the guarantees authorized by subdivision (a), payment of fees specified in Section 736 and consideration of the matters set forth in subdivision (h) of Section 10506, that the insurer is financially qualified to issue policies, contracts, or agreements that contain the guarantees referred to in subdivision (a) including by meeting or exceeding the financial standards in subdivision (d). (d) (1) No admitted life insurer that has been financially qualified pursuant to subdivision (c) may issue or market or continue to issue or market in this state, nor may any domestic life insurer issue or market anywhere or continue to issue or market anywhere, policies, contracts, or agreements, or coverage thereunder by certificate or otherwise, providing the guarantees referred to in subdivision (a) unless all of the following apply: (A) It has at least one billion dollars ($1,000,000,000) of admitted assets or at least one hundred million dollars ($100,000,000) of aggregate capital and surplus. (B) It annually complies with the requirement to furnish an actuarial statement as a part of or in addition to the statement required by Section 10489.15, provided the actuarial statement is in form and substance satisfactory to the commissioner. This actuarial statement shall meet all the following requirements: (i) The statement shall state that, after taking into account risk charges payable from the assets of the separate account with respect to the guarantee, the assets of the separate account, together with any reserves in excess of the account value, make good and sufficient provision for the liabilities of the insurer with respect thereto. (ii) The statement shall provide an opinion of the reasonableness and sufficiency of the pricing of any general account guarantees and any other fees for administration paid to the general account from the separate account. (iii) The statement shall be supported by a memorandum by a qualified actuary, also in form and substance satisfactory to the commissioner, that describes the calculations made in support of the actuarial statement and includes the assumptions used in the calculations. (C) Its ratio of aggregate capital and surplus to its aggregate liabilities is not lower than 75 percent of that ratio as of the December 31 prior to its receiving financial qualification from the commissioner except as allowed under paragraph (4) of subdivision (d). For the purposes of this section, "capital and surplus" includes capital and surplus plus the asset valuation reserve and one-half of the liability for dividends, all as reflected on the most recent financial statement on file with the commissioner. "Liabilities" means the total liabilities as reflected on the financial statement excluding therefrom liabilities for policies, contracts, and agreements issued in connection with separate accounts, liabilities in connection with contracts issued pursuant to this section and excluding both of the following: (i) The liability for any asset valuation reserve. (ii) One-half the liability for dividends. (2) If the commissioner, following notice to the insurer and a hearing, determines that an insurer that has received financial qualification pursuant to subdivision (c) no longer maintains the financial strength needed to initially receive the qualification, the commissioner may issue an order requiring the insurer to cease issuing new policies, contracts, or agreements providing for guarantees contemplated by subdivision (a). (3) In the event an insurer that has received financial qualification pursuant to subdivision (c) determines that it does not meet the requirements of subdivision (d), it shall promptly comply with paragraph (2) as if an order had been issued by the commissioner after notice and hearing, and within 45 days, notify the commissioner in writing at the place designated by the commissioner that it has ceased to meet the requirements specified in the written notice. (4) In the event the insurer thereafter meets or exceeds all of the requirements of subdivision (d), it may notify the commissioner at the place designated by the commissioner, in writing, and upon the passage of 45 days following receipt by the commissioner of the notice, may resume issuing policies, contracts, or agreements that provide for guarantees contemplated by subdivision (a) as long as it meets the requirements of subdivision (d). However, if the insurer believes that the resumption of the issuance of the policies, contracts, or agreements that provide for the guarantees contemplated by subdivision (a) would not be hazardous to its policyholders or the citizens of California, even though it does not meet the requirements specified in subparagraph (C) of paragraph (1), the insurer shall include in the notice a demonstration that the issuance of policies, contracts, or agreements containing the guarantees referred to in subdivision (a) is not hazardous to its policyholders or the citizens of California. Within the 45-day period, the commissioner may issue an order containing the requirements of paragraph (2) if, in the commissioner's opinion, any of the requirements of subdivision (d) are not met, or resumption would violate any provision of this code or, resumption may be hazardous to the insurer, policyholders, creditors, or the public. The failure to issue an order within 45 days shall not be deemed an approval of the activities. The order shall specify the grounds upon which the commissioner is basing the order. The insurer may, within 10 days of the order, request a hearing. The hearing shall be a private hearing and shall commence not less than 10 days, nor more than 20 days, after the request for hearing is served on the commissioner. (e) Policies, contracts, and agreements referred to in subdivision (a), that are not otherwise subject to filing under applicable law and regulation, shall be filed, before being marketed or issued in this state, by the insurer with the commissioner. If the commissioner finds that the policies, contracts, or agreements submitted pursuant to subdivision (a) contemplate practices that are unfair or unreasonable or otherwise inconsistent with the provisions of this code, he or she may disapprove of the forms of policies, contracts, or agreements specifying in what regard the policies, contracts, or agreements are unfair or unreasonable or otherwise inconsistent with the provisions of this code. (f) As an alternative to the filing and approval procedure set forth in subdivision (e), an insurer that satisfies eligibility criteria specified in the bulletin authorized by subdivision (g) may file with the commissioner the proposed form of the policy, contract, or agreement, together with an officer's certificate, accompanied by an actuarial certification and demonstration, and other supporting material, all in accordance with procedures set forth in the bulletin authorized by subdivision (g). An insurer may issue and deliver a policy, contract, or agreement the day following approval by the commissioner of a filing under this subdivision. Absent explicit approval, an insurer may, no sooner than 30 working days after the filing of the policy, contract, or agreement and all required supporting documentation, issue and deliver any policy, contract, or agreement that has been filed pursuant to this subdivision if the commissioner has not notified the insurer in writing that the filing lacks the required documentation or that he or she objects to the filing upon grounds sufficient to disapprove the policy, contract, or agreement. The bulletin shall set forth procedures providing the insurer an opportunity to respond to any objections. If the commissioner finds that the officer's certificate or the actuarial certification or demonstration filed in support of the policy, contract, or agreement is false or incorrect, the commissioner may, in addition to taking any other lawful measures, including suspension of authority to use the policy, contract, or agreement, declare the insurer ineligible to utilize the alternative procedure authorized by this subdivision for a period not to exceed three years from the date of the filing of the policy, contract, or agreement. The commissioner may summarily suspend the use of any policy, contract, or agreement used by the insurer pursuant to this subdivision on any grounds sufficient to disapprove the policy, contract, or agreement, or if the filing fails to include the required documents. This suspension may be prospective only. Suspension of use of a policy, contract, or agreement shall be in writing and shall specify the reasons for the suspension. Unless the commissioner in the suspension order or subsequent thereto specifies a later effective date for the suspension, any suspension shall be effective on the day following the receipt of the suspension order by the insurer. An insurer affected by any suspension, issued pursuant to this subdivision, of a policy, contract or agreement may refile the policy, contract, or agreement with the commissioner pursuant to subdivision (e). The commissioner may suspend or discontinue filings of policies, contracts, or agreements under this subdivision at any time upon notice to affected insurers. Any filing by an insurer of a policy, contract, or agreement under this subdivision that is not accepted by the commissioner may be filed by the insurer pursuant to subdivision (e). (g) The commissioner may issue, and amend from time to time thereafter, as he or she deems appropriate, a bulletin setting forth reasonable requirements for insurers that issue policies, contracts, or agreements referred to in subdivision (a) relating to all of the following: (1) The reserves to be maintained by insurers for those policies, contracts, or agreements. (2) The accounting and reporting of funds credited under, assets held with respect to, and transfers to and from the insurer's general account and separate accounts pertaining to, those policies, contracts, or agreements. (3) The disclosure of information to be given to holders and prospective holders of those policies, contracts, or agreements. (4) The qualification of persons selling those policies, contracts, or agreements on behalf of the insurers. (5) The filing of those policies, contracts, or agreements with the commissioner. (6) The filing with the commissioner of specified sales and financial information pertaining to those policies, contracts and agreements. (7) The eligibility criteria and procedure for filing under subdivision (f). (8) Other matters relating to those policies, contracts, and agreements as the commissioner considers necessary, proper, and advisable that are not inconsistent with this section. This bulletin 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. (h) The authority granted in this section is in addition to the authority granted to life insurers by other provisions of this code and the requirements of this section shall not contravene that authority. No policy, contract, or agreement that constitutes investment return assurance pursuant to Section 10203.10 or Section 10507 may be issued pursuant to this section. (i) Guarantees authorized by this section may only be made in connection with policies, contracts, or agreements issued to an owner that is not a natural person, and is an "accredited investor" as defined in Regulation D-Rules Governing the Limited Offer and Sale of Securities Without Registration Under the Securities Act of 1933, 17 Code of Federal Regulations Section 230.501 et seq., as promulgated by the United States Securities and Exchange Commission, in transactions where the aggregate single premium or deposit for all policies, contracts, or agreements (excluding certificates issued under a group or master policy) issued to the owner containing guarantees authorized by this section is at least one million dollars ($1,000,000). Notwithstanding the foregoing, an insurer may issue policies, contracts, or agreements qualifying under paragraph (1) of subdivision (b) above, to a pension, retirement, or retirement medical benefit or profit-sharing plan reasonably expected to receive contributions in excess of two hundred fifty thousand dollars ($250,000) within the first 12 months following issuance of the policy, contract, or agreement and that has more than 10 participants. Policies, contracts, or agreements providing coverage in this state, by certificate or otherwise, that contain guarantees authorized by this section issued on a group basis shall be issued only to groups referred to in Chapter 2 (commencing with Section 10200) of Part 2 of Division 2. SEC. 2. Section 10507.5 of the Insurance Code is amended to read: 10507.5. (a) An insurer may deliver or issue for delivery one or more policies, contracts, or agreements that establish the insurer's obligations under the policies, contracts, or agreements by reference to a portfolio of assets that is not owned by or possessed by the insurer, if the following requirements are met: (1) The insurer is authorized to deliver, or issue for delivery, life insurance policies in this state. (2) The insurer has at least one billion dollars ($1,000,000,000) in admitted assets or one hundred million dollars ($100,000,000) in capital and surplus, as reflected by the most recent financial statements on file with the commissioner. For the purposes of this section, "capital and surplus" includes capital and surplus plus the asset valuation reserve and one-half of the liability for dividends, all as reflected on the most recent financial statement on file with the commissioner. (b) Policies, contracts, and agreements referred to in subdivision (a), that are not otherwise subject to filing under applicable law and regulation, shall be filed, before being marketed or issued in this state, by the insurer with the commissioner. If the commissioner finds that the policies, contracts, or agreements submitted pursuant to subdivision (a) contemplate practices that are unfair or unreasonable or otherwise inconsistent with the provisions of this code, he or she may disapprove of the forms of policies, contracts, or agreements specifying in what regard the policies, contracts, or agreements are unfair or unreasonable or otherwise inconsistent with the provisions of this code. (c) As an alternative to the filing and approval procedure set forth in subdivision (b), if a bulletin is issued by the commissioner pursuant to subdivision (d), an insurer that satisfies eligibility criteria specified in that bulletin may file with the commissioner the proposed form of the policy, contract, or agreement, together with an officer's certificate, accompanied by an actuarial certification and demonstration, and other supporting material, all in accordance with procedures set forth in the bulletin authorized by subdivision (d). An insurer may issue and deliver a policy, contract, or agreement the day following approval by the commissioner of a filing under this subdivision. Absent explicit approval, an insurer may, no sooner than 30 working days after the filing of the policy, contract, or agreement and all required supporting documentation, issue and deliver any policy, contract, or agreement that has been filed pursuant to this subdivision if the commissioner has not notified the insurer in writing that the filing lacks the required documentation or that he or she objects to the filing upon grounds sufficient to disapprove the policy, contract, or agreement. The bulletin authorized in subdivision (d) shall set forth procedures providing the insurer an opportunity to respond to any objections. If the commissioner finds that the officer's certificate or the actuarial certification or demonstration filed in support of the policy, contract, or agreement is false or incorrect, the commissioner may, in addition to taking any other lawful measures, including suspension of authority to use the policy, contract, or agreement, declare the insurer ineligible to utilize the alternative procedure authorized by this subdivision for a period not to exceed three years from the date of the filing of the policy, contract or agreement. The commissioner may summarily suspend the use of any policy, contract, or agreement used by the insurer pursuant to this subdivision on any grounds sufficient to disapprove the policy, contract, or agreement, or if the filing fails to include the required documents. This suspension may be prospective only. Suspension of use of a policy, contract, or agreement shall be in writing and shall specify the reasons for the suspension. Unless the commissioner in the suspension order or subsequent thereto specifies a later effective date for the suspension, any suspension shall be effective on the day following the receipt of the suspension order by the insurer. An insurer affected by any suspension, issued pursuant to this subdivision, of a policy, contract, or agreement may refile the policy, contract, or agreement with the commissioner pursuant to subdivision (b). The commissioner may suspend or discontinue filings of policies, contracts, or agreements under this subdivision at any time upon notice to affected insurers. Any filing by an insurer of a policy, contract, or agreement under this subdivision that is not accepted by the commissioner may be filed by the insurer pursuant to subdivision (b). (d) The commissioner may issue, and amend from time to time thereafter, as he or she deems appropriate, a bulletin setting forth reasonable requirements for insurers that issue policies, contracts, or agreements referred to in subdivision (a), relating to all of the following: (1) The reserves to be maintained by insurers for those policies, contracts, or agreements. (2) The accounting and reporting of those policies, contracts, or agreements. (3) The disclosure of information to be given to holders and prospective holders of those policies, contracts, or agreements. (4) The qualification of persons selling those policies, contracts, or agreements on behalf of the insurers. (5) The filing of those policies, contracts, or agreements with the commissioner. (6) The filing with the commissioner of specified sales and financial information pertaining to those policies, contracts and agreements. (7) The eligibility criteria and procedure for filing under subdivision (c). (8) Other matters relating to those policies, contracts, and agreements as the commissioner considers necessary, proper, and advisable that are not inconsistent with this section. This bulletin 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. (e) Upon completion of the determination of qualification required by subdivision (a), and, whether authorization to issue policies, contracts, or agreements referred to in subdivision (a) is granted or denied, the commissioner shall require the payment of the fee specified in Section 736 for the determination of qualification. SEC. 3. Section 12957 of the Insurance Code is amended to read: 12957. The commissioner shall not withdraw approval of a policy theretofore approved by him except upon those grounds as, in his opinion, would authorize disapproval upon original submission thereof. Any withdrawal of approval shall be in writing and shall specify the ground thereof. If the insurer demands a hearing on a withdrawal, the hearing shall be granted and commenced within thirty days of filing of a written demand therefor with the commissioner. Unless the hearing is so commenced, the notice of withdrawal shall become ineffective upon the thirty-first day from and after the date of filing of the demand. This section shall not apply to policies subject to the provisions of subdivision (f) of Section 10291.5, or to policies, contracts, or agreements that were approved under an alternative filing and approval procedure as provided for in subdivision (f) of Section 10506.4 or subdivision (c) of Section 10507.5.