Cal. Code Regs. tit. 10 § 2603.12

Current through Register 2024 Notice Reg. No. 49, December 6, 2024

Section 2603.12 - Formal Allegations and Exhibits Required for All Applications

Unless otherwise provided by these regulations or permitted by statute, every application for an insurer securities permit shall conform to the basic requirements prescribed in this section. It shall set forth, either in the body of the application or by appropriate exhibits attached thereto and incorporated therein by reference, the information and data specified in paragraphs A. through D. of this section. It shall also be supported by the items described in paragraphs E. through M. hereof. Such latter items may be attached as exhibits and appropriately referred to and incorporated in the body of the application. (Sections 834, 835, 836, 887, 889, 889.1, 839.5, 840 and 843)

A. Names and addresses of the applicant's officers.

B. The street number, city and state of applicant's home office (which shall be the state of incorporation, unless there is a separate executive office, in which event both shall be listed); also the mailing address, if different from the home or executive office address.

C. An itemized account of applicant's financial condition, including the amount and character of its assets and liabilities. Admitted insurers may refer to attached current financial statement or statements already on file with the Commissioner and incorporate them by reference. Nonadmitted insurance companies shall furnish their latest annual statements in the form prescribed by the N.A.I.C. Blanks Committee, both copies signed and verified by appropriate officers of the company, one copy of which shall be certified by applicant's home state insurance Commissioner as being a true copy of the same on file in the Commissioner's office. If such statement is not available (as in the case of underwritten title companies, attorneys-in-fact of reciprocal insurers, exclusive managers of domestic insurers-elsewhere defined as "insurers" but not as "insurance companies"), furnish independent audit or other recent financial statement. A copy of a recent Registration Statement, Form S-1, filed with and acceptable to the Securities and Exchange Commission, will normally suffice in lieu of an annual statement unless the condition of applicant's finances or its book of business is unsatisfactory or cannot be accurately ascertained from such Registration Statement, in which event the Commissioner will insist upon a certified annual or more recent statement in the form of the annual statement prescribed by the N.A.I.C. Blanks Committee.

D. A detailed statement of the plan upon which applicant is transacting or proposes to transact business. Admitted applicants may refer to and incorporate by reference their latest report of examination and financial statement filed with the Commissioner. Any substantial new departure in plan of business or method of operation shall be fully alleged. Nonadmitted insurance companies shall attach reports of most recent examination, one copy of which shall be certified by applicant's home state Commissioner as a true copy of the same on file in the Commissoner's office. Nonadmitted insurers in most cases may attach as an exhibit to their application and incorporate a copy of a recent Registration Statement, Form S-1, filed with and acceptable to the Securities and Exchange Commission in lieu of a certified Report of Examination, if such a Registration Statement is available.

E. A voided specimen of any certificate for shares of stock, subscription warrant, option, contribution certificate, or other security which applicant proposes to issue.

F. A copy of any underwriting agreement, agreement among underwriters, selected dealer agreement, or any other contract applicant has made or proposes to make concerning the issue or providing for sale or disposition of the shares. Press proofs are acceptable for initial filing, but may be required to be supplemented by reprints completed as to dates, commissions, expenses, etc. (but not necessarily as to price), before a permit is issued. If final prints cannot be supplied before issuance of the permit on account of the fact that price and commissions are to be set immediately prior to the proposed offering, the Commissioner may act on the basis of such information supplied orally to be subsequently confirmed in writing by telegram or letter. When, in the Commissioner's judgment a copy of the papers as finally completed is essential to establish compliance with the law or to complete the record, the permit may require mailing to the Commissioner of a reproduction of the executed document for filing. In that event such copy shall be certified by an officer of applicant, attested by its corporate seal, to be a true copy of the document relied on by the parties thereto.

G. A copy of any prospectus or advertisement or other description of the securities sought to be issued, which applicant will circulate or publish. File preliminary prospectus and Registration Statement, Form S-1 (if any) with application and supplement by all amendments thereto. The Commissioner reserves the right to require the (final) prospectus to be filed before the Commissioner's (definitive) permit is issued. However, in the case of nationwide issues where time is an important factor, the permit can be issued before receipt of the (final) prospectus if the Commissioner is satisfied that it will be unchanged from the latest approved preliminary prospectus already on file except for changes required by S.E.C. rules. In such event, the permit will require that two copies of the (final) prospectus be mailed to the Commissioner for filing simultaneously with mailing to the offerees. Applications for organizational permits are required to include a prospectus or offering circular if there is to be a public sale of securities.

H. A copy of any letter to stockholders, offering letter, letter of solicitation, proxy, proxy statement, letter of extension or other circular concerning the securities to be issued. Final prints shall be filed before permit is issued, if at all possible. Otherwise, the permit will require mailing of duplicate final prints in the same form and text as the latest version on file to the Commissioner for filing simultaneously with mailing to the offerees. If a copy bearing the "Approved" stamp is desired for applicant's records, applicant shall mail the Commissioner three copies.

I. Applicant's articles of incorporation. Admitted insurance companies with articles as amended to date already on file in the Commissioner's office where the application for permit is filed may refer to and incorporate same by reference. Nonadmitted applicants must file their articles of incorporation, or comparable documents, as currently amended. One copy shall bear the original certificate of the official governmental custodian of the original thereof to the effect that it is a true copy of the same on file in the Commissioner's office. If a former application filed in the same office within two years prior to the instant application contained articles of incorporation so authenticated, they may be identified by specific reference to the file by entitlement, file number and date of filing, and may be incorporated by reference when so identified. Any amendment made since such prior filing, unless already officially filed with the Commissioner, shall be attached to or accompany the application. It shall be similarly authenticated. This portion of the application shall positively allege that the articles attached by exhibit, or incorporated by specific reference, or both, are applicant's articles of incorporation as currently amended to date of the application. (Sec. 836)

J. By-laws or comparable governing rules shall be attached or incorporated by reference. This exhibit may be cared for under similar circumstances in the same manner as required of articles of incorporation by the preceding paragraph hereof. Both copies shall be authenticated by the certificate of a corporate Secretary or Assistant Secretary attested by the company seal to the effect that they are true copies of the company by-laws currently in force.

K. A copy of the pertinent minutes of any proceeding of applicant's directors, stockholders, or members relating to or affecting the current issue of securities or transaction sought to be authorized. They are to be certified over the original signature of a Secretary or Assistant Secretary, attested by the corporate seal, to be true copies of true excerpts. (Section 836)

L. Foreign applicants (not organized under the laws of this state must file, either with their application or separately, before a permit can be granted, an original certificate of their domiciliary insurance commissioner or other proper officer of the jurisdiction in which they are organized certifying that applicant is on the date of the certificate duly authorized to transact business in its domiciliary state. Such certificate will not be acceptable if issued more than 30 days prior to the date on which such application is filed with this Department. (Section 837(a))

M. Section 837(b) requires that nonadmitted applicants (not holding a California Certificate of Authority) must file a stipulation or agreement for service of process. As a practical matter, admitted insurance companies who have on file with the Insurance Commissioner a current appointment of agent for service of process, as required by Insurance Code Sections 1600- 1603 and the stipulation required by section 1604 ibid., as those sections provided on or after September 30, 1963, need not file the stipulation described in section 837(b); otherwise, insurers shall make and file the stipulation required by said section 837(b). Forms may be obtained from the Department.

Cal. Code Regs. Tit. 10, § 2603.12

1. Editorial correction of subsection M. (Register 91, No. 15).
2. Change without regulatory effect amending paragraphs C., D., G. and I. filed 7-14-2021 pursuant to section 100, title 1, California Code of Regulations (Register 2021, No. 29). Filing deadline specified in Government Code section 11349.3(a) extended 60 calendar days pursuant to Executive Order N-40-20.