Section 2647.1 - Costs of Administration and Operation(a) For purposes of this section, "insurer" means every person holding a certificate of authority and writing insurance on risks on operations in this state, except those insurers exclusively writing insurance on lines or classes specified in section 1851 of the Insurance Code, including credit, and financial guaranty insurance.(b) Fees assessed and collected pursuant to this section shall be deposited in a sub-account within the Insurance Fund ("the Sub-Account"), for the sole purpose of collecting and disbursing funds for the administrative and operational costs arising from the provisions of article 10 of division 1, part 2, chapter 9 of the Insurance Code.(c) Each insurer shall be assessed, and shall pay, in quarterly installments as specified in this section, an annual fee, in the amount determined as specified in this section, for each line of insurance written in California (including surety, credit, and financial guaranty insurance), excluding policies written in lines or classes specified in section 1851 of the Insurance Code. (1) The Department shall adopt a Base Rate, which shall be calculated to produce a total assessment equal to the appropriation contained in the State Budget for the administrative and operational costs arising from the provisions of article 10 of division 1, part 2, chapter 9 of the Insurance Code, plus or minus such amounts as the Commissioner deems necessary as a contingency against unanticipated fluctuations in expenditures and revenues and plus or minus such amounts as the Commissioner deems necessary to correct for over-collections or under-collections in prior years. The Base Rate shall reflect any revenues, other than revenues from the assessment specified in this section, which revenues are properly attributable to the administrative and operational costs arising from the provisions of article 10 of division 1, part 2, chapter 9 of the Insurance Code.(2) The amount of fee shall be based on the insurer's California derived direct premiums written in the calendar year preceding the first day of the fiscal year in which the assessment is made, calculated by annual statement line of insurance.(3) For each line of insurance, the assessment shall equal the Base Rate multiplied by the Assessment Factor contained in the following table: | For Each Line in Which the Derived Direct Written Premiums Were Greater Than | And Less Than or Equal to | Assessment Factor |
| $0 | $250,000 | 1.0 |
| 250,000 | 500,000 | 2.0 |
| 500,000 | 1,000,000 | 4.0 |
| 1,000,000 | 2,000,000 | 7.0 |
| 2,000,000 | 4,000,000 | 14.0 |
| 4,000,000 | 7,000,000 | 25.0 |
| 7,000,000 | 12,000,000 | 35.0 |
| 12,000,000 | 20,000,000 | 50.0 |
| 20,000,000 | 30,000,000 | 70.0 |
| 30,000,000 | 45,000,000 | 100.0 |
| 45,000,000 | 65,000,000 | 140.0 |
| 65,000,000 | 100,000,000 | 180.0 |
| 100,000,000 | 150,000,000 | 250.0 |
| 150,000,000 | 250,000,000 | 360.0 |
| 250,000,000 | | 500.0 |
(d) Each quarterly installment shall be in the amount of one-quarter of the annual fee, except when the Commissioner determines that it is necessary, due to operational requirements and the timing of liabilities, to collect more than one-quarter of the annual fee in a given quarter, in which case the installment may be in an amount no greater than one-half of the annual fee, provided that in no event shall the sum of the quarterly installment exceed the annual fee.(e) If, at the end of any fiscal year, the Sub-Account contains a surplus in excess of 25 percent of the administrative and operational costs arising from the provisions of article 10 of division 1, part 2, chapter 9 of the Insurance Code, as determined from the prior year's actual costs and any budgeted additional or reduced costs, the Commissioner shall credit the amount in excess of 25 percent against future assessments and shall review the Base Rate to determine whether an adjustment is necessary to reduce the surplus in the Sub-Account to no more than 25 percent of the expected annual administrative and operational costs arising from the provisions of article 10 of division 1, part 2, chapter 9 of the Insurance Code.Cal. Code Regs. Tit. 10, § 2647.1
1. New section filed 8-13-91 as an emergency; operative 8-13-91 (Register 92, No. 3). A Certificate of Compliance must be transmitted to OAL 12-11-91 or emergency language will be repealed by operation of law on the following day.
2. Repealed by operation of Government Code section 11346.1(g) (Register 92, No. 15).
3. New section refiled 2-14-92 as an emergency; operative 2-14-92 (Register 92, No. 15). A Certificate of Compliance must be transmitted to OAL 6-15-92 or emergency language will be repealed by operation of law on the following day.
4. Certificate of Compliance as to 2-14-92 order transmitted to OAL 7-27-92 and filed 7-27-92 (Register 92, No. 31).
5. Amendment of subsection (a), repealer of subsection (b), and amendment of new subsections (b)-(e) and NOTE filed 9-11-95 as an emergency; operative 9-11-95 (Register 95, No. 37). A Certificate of Compliance must be transmitted to OAL by 1-9-96 or emergency language will be repealed by operation of law on the following day.
6. Reinstatement of section as it existed prior to emergency amendment filed 9-11-95 by operation of Government Code section 11346.1(f) Register 96, No. 14).
7. Amendment of section heading and subsection (a), repealer of subsection (b), new subsections (b)-(e) and amendment of NOTE filed 4-1-96 as an emergency; operative 4-1-96 (Register 96, No. 14). A Certificate of Compliance must be transmitted to OAL by 7-30-96 or emergency language will be repealed by operation of law on the following day.
8. Editorial correction of NOTE (Register 96, No. 18).
9. Certificate of Compliance as to 4-1-96 order, including amendment of subsection (a), transmitted to OAL 3-20-96 and filed 5-1-96 (Register 96, No. 18). Note: Authority cited: Sections 1861.01, 1861.05, 12979 and 12992, Insurance Code. Reference: Section 12979, Insurance Code; and Calfarm Insurance Company v. Deukmejian (1989) 48 Cal.3d 805.
1. New section filed 8-13-91 as an emergency; operative 8-13-91 (Register 92, No. 3). A Certificate of Compliance must be transmitted to OAL 12-11-91 or emergency language will be repealed by operation of law on the following day.
2. Repealed by operation of Government Code section 11346.1(g) (Register 92, No. 15).
3. New section refiled 2-14-92 as an emergency; operative 2-14-92 (Register 92, No. 15). A Certificate of Compliance must be transmitted to OAL 6-15-92 or emergency language will be repealed by operation of law on the following day.
4. Certificate of Compliance as to 2-14-92 order transmitted to OAL 7-27-92 and filed 7-27-92 (Register 92, No. 31).
5. Amendment of subsection (a), repealer of subsection (b), and amendment of new subsections (b)-(e) and Note filed 9-11-95 as an emergency; operative 9-11-95 (Register 95, No. 37). A Certificate of Compliance must be transmitted to OAL by 1-9-96 or emergency language will be repealed by operation of law on the following day.
6. Reinstatement of section as it existed prior to emergency amendment filed 9-11-95 by operation of Government Code section 11346.1(f) Register 96, No. 14).
7. Amendment of section heading and subsection (a), repealer of subsection (b), new subsections (b)-(e) and amendment of Note filed 4-1-96 as an emergency; operative 4-1-96 (Register 96, No. 14). A Certificate of Compliance must be transmitted to OAL by 7-30-96 or emergency language will be repealed by operation of law on the following day.
8. Editorial correction of Note (Register 96, No. 18).
9. Certificate of Compliance as to 4-1-96 order, including amendment of subsection (a), transmitted to OAL 3-20-96 and filed 5-1-96 (Register 96, No. 18).