Cal. Code Regs. tit. 10 § 2609.03

Current through Register 2024 Notice Reg. No. 24, June 14, 2024

Section 2609.03 - Shares of Stock, Price of

A. The price per share of the initial issue of stock of a newly organized domestic insurer, as "insurer" is defined by Insurance Code Section 826 and paragraph C of Section 2601.02 of these regulations, shall be not less that $50.00 a share. (Secs. 839, 843)

B. Absent special circumstances compelling the same, stock splits or other actions to reduce the value and price of its shares will not be authorized for a domestic insurer unless and until:

1. It has filed successive annual statements with the Department which, after audit, constitute satisfactory evidence in the Commissioner's judgement that the applicant's operations have been and are financially safe; and

2. Its shares have acquired a reasonably stable value in the market place. (Section 839)

C. Permits authorizing already licensed and operating foreign insurance companies to sell their shares in this State at less than $50.00 a share, except in pre-emptive or comparable offerings, will not ordinarily be granted unless the applicant and its shares shall have attained the condition described in paragraph B of this section relating to domestic insurers. (California Constitution, Article XII, Section 15) The Commissioner will rely on financial statements (after audit) filed in this state if the applicant is admitted. A nonadmitted foreign applicant may prove its financial condition by copies of its annual statements filed with the regulatory authority of its home state, such copies to be certified by such regulatory authority as true copies of the same on file in such regulatory authority's office. Such statements shall be subject to reasonable audit by this Department.

D. Newly organized foreign applicants for permits to offer their securities in this state shall be subject to requirements not more favorable to the transaction of such business than are comparable domestic applicants under the preceding paragraphs of this section. (California Constitution, Article XII, Section 15)

Cal. Code Regs. Tit. 10, § 2609.03

1. Change without regulatory effect amending paragraph C. 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.