BILL NUMBER: AB 1837	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 5, 2010

INTRODUCED BY   Assembly Member Gaines

                        FEBRUARY 12, 2010

   An act to amend Section 700 of the Insurance Code, relating to
insurance.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 1837, as amended, Gaines. Insurance transactions: nonadmitted
insurers.
   Existing law prohibits persons from transacting any class of
insurance within this state without first being admitted for that
class and makes a violation of that prohibition a crime. 
   This bill would make a technical, nonsubstantive change to that
provision.  
   This bill would authorize a nonadmitted insurer that is affiliated
with a California domestic insurer to receive administrative
services rendered in this state by its domestic affiliate so long as
the nonadmitted insurer provides the Insurance Commissioner with a
description of the administrative services to be rendered by the
domestic affiliate and the services do not violate specified
prohibitions.  
   The bill would also authorize the nonadmitted insurer and its
domestic affiliate to have common directors and officers so long as
the nonadmitted insurer maintains a resident operating manager in its
home state who is responsible for and carries out all management
functions in its home state. 
   Vote: majority. Appropriation: no. Fiscal committee:  no
  yes  . State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 700 of the Insurance Code is amended to read:
   700.  (a) A person shall not transact any class of insurance
business in this state without first being admitted for that class.
Except for the State Compensation Insurance Fund as authorized by
Sections 11770 and 11778 to 11780.5, inclusive, admission is secured
by procuring a certificate of authority from the commissioner. The
certificate shall not be granted until the applicant conforms to the
requirements of this code and of the laws of this state prerequisite
to its issue.
   (b) The unlawful transaction of insurance business in this state
in willful violation of the requirement for a certificate of
authority is a public offense punishable by imprisonment in the state
prison, or in a county jail not exceeding one year, or by  a
 fine not exceeding one hundred thousand dollars ($100,000), or
by both that fine and imprisonment, and shall be enjoined by a court
of competent jurisdiction on petition of the commissioner.
   (c) After the issuance of a certificate of authority, the holder
shall continue to comply with the requirements as to its business set
forth in this code and in the other laws of this state, including,
but not limited to, Chapter 5 (commencing with Section 1621), with
regard to employees or contractors who solicit, negotiate, or effect
insurance.
   (d) Where a hearing is held under this section the proceedings
shall be conducted in accordance with Chapter 5 (commencing with
Section 11500) of Part 1 of Division 3 of Title 2 of the Government
Code, and the commissioner shall have all the powers granted therein.

   (e) The commissioner shall either issue or deny an application for
a certificate of authority within 180 calendar days after the date
of the application.
   (f) The commissioner and his or her authorized representative
shall be prohibited from seeking a waiver to extend the 180 calendar
day period specified in subdivision (e), nor shall the applicant be
permitted to waive that period. 
   (g) (1) A nonadmitted insurer which is affiliated with a
California domestic insurer may receive administrative services
rendered in California by its California domestic insurer affiliate
so long as the nonadmitted insurer provides the commissioner with a
description of the administrative services to be rendered in
California by the California domestic insurer affiliate and the
services do not violate this section and Section 703.  
   (2) A nonadmitted insurer and its California domestic insurer
affiliate may have common directors and officers so long as the
nonadmitted insurer maintains a resident operating manager in its
home state who is responsible for and carries out all management
functions in its home state.