§ 12116. — 12116. (Amended by Stats. 2005, Ch. 412, Sec. 10.)

California § 12116.

• Jurisdiction: California
• Code INS: Insurance Code - INS
• Div. 2.: DIVISION 2. CLASSES OF INSURANCE
• Part 4.: PART 4. MISCELLANEOUS CASUALTY INSURANCES
• Ch. 1.: CHAPTER 1. Surety Insurers on Reserve Basis; Capital Requirements and Permitted Insurances
• Art. 5.: ARTICLE 5. Financial Guaranty Insurance

Text

(a)
If an admitted financial guaranty insurance corporation at any time exceeds any limitation prescribed by subdivision (a) or (b) of Section 12114 or Section 12115, the corporation shall immediately notify the commissioner in writing. Upon receipt of the written notification, or independent of its receipt, the commissioner may issue an order to show cause why the financial guaranty insurance corporation should not cease transacting financial guaranty insurance business. If the commissioner issues such an order, the commissioner shall serve
notice of hearing with the order to the financial guaranty insurance corporation stating the time and place therefor, and the conduct, condition or grounds upon which the commissioner has made the order. The hearing shall occur not less than 20 nor more than 30 days after notice is served. At the hearing, the burden to show cause why the financial guaranty insurance corporation should not cease transacting new financial guaranty insurance shall be borne solely by the financial guaranty insurance corporation.
(b)
If the commissioner does not issue an order pursuant to subdivision (a) upon receiving written notice, the financial guaranty insurance corporation shall, within 30 days after the limitations are breached, submit a written plan to the commissioner detailing the steps that it will take or has taken to reduce its exposure to loss to no more than the amounts permitted by subdivisions (a) and (b) of Section 12114 and Section 12115. If,
after review of the written plan, the commissioner determines that the corporation has not presented reasonable steps to reduce its exposure to loss to not more than the permitted amounts, the commissioner may issue an order to show cause following the same procedures as prescribed in subdivision (a).
(c)
If, after notice and hearing pursuant to subdivision (a) or (b), the commissioner determines that the financial guaranty insurance corporation has exceeded any limitation prescribed by subdivision (a) or (b) of Section 12114 or Section 12115, the commissioner may order the corporation to cease transacting any new financial guaranty insurance business until its exposure to loss no longer exceeds these limitations.
(d)
The provisions of this section and Section 12115.5 shall in no way limit the stop order power of the commissioner under any other section.

Legislative History

Amended by Stats. 2005, Ch. 412, Sec. 10. Effective January 1, 2006.