9080-9103

INSURANCE CODE
SECTION 9080-9103




9080.  Except as provided by this chapter, an association organized
and operating on or before January 1, 1947, under this chapter is not
governed by the provisions of this code or other insurance laws of
this State. No other association shall be formed or transact
insurance under this chapter.



9080.1.  On and after January 1, 1954, no association shall transact
insurance under this chapter unless it has theretofore received and
continues to hold a certificate of exemption from the commissioner.
   Before procuring such certificate such association shall file with
the commissioner certified copies of the articles of incorporation,
association, by-laws, rules and regulations or other organization or
governing documents, together with certified copies of all evidences
of insurance which it proposes to issue. It shall thereafter file
with the commissioner certified copies of all amendments to such
documents or evidences. The commissioner shall issue such certificate
of exemption upon application by such association and a showing by
it that it qualifies therefor under the provisions of this chapter.
   Such certificate of exemption is subject to suspension or
revocation by the commissioner if the organization fails to comply
with the requirements of this chapter.
   The proceedings shall be conducted in accordance with Chapter 5 of
Part 1 of Division 3 of Title 2 of the Government Code and the
commissioner shall have all the powers granted therein.
   Such association is subject to Sections 1 to 41, inclusive, and to
Articles 4 and 14 of Chapter 1, Part 2, Division 1 of this code.



9080.3.  Any religious organization engaged in the business of
writing fire insurance solely for its members and its churches on the
effective date of this section, and which has been doing so
continuously in California since January 1, 1925, is subject to all
applicable provisions of this chapter.
   Any religious organization described in this section shall not
write insurance:
   (a) In excess of 10 percent of its capital and surplus as shown in
its last statement on file with the commissioner, on any one risk,
or in excess of 20 percent of its capital and surplus as shown in its
last statement on file with the commissioner in any one city block
within an incorporated city without immediately reinsuring the excess
over those amounts.
   (b) On business property within any incorporated city.




9081.  Secret fraternal societies, having lodges, councils or
granges in this State, conducting their business and securing their
membership on the lodge, council or grange system exclusively, and
having ritualistic work and ceremonies in their lodges, councils or
granges, may form an insurer by association of the members of their
order or society, binding themselves to contribute to each other's
loss by fire.



9082.  Such association shall be formed by filing a certificate in
the office of the Secretary of State and a like certificate in the
office of the clerk of each county in which a member has property
insured in said association. Each such certificate shall state:
   (a) Generally, the objects of the association.
   (b) Its principal place of business.
   (c) The names of its officers.
   Such certificates shall be signed by the officers of the
association and verified by at least three of them.



9083.  The officers of the association shall be members of the
association, having property insured therein.



9084.  Such an association may insure the property of its members
against loss or damage by fire for an amount not exceeding ten
thousand dollars ($10,000) on any one risk, subject to the following
conditions as to amount:
   (a) A risk in excess of three thousand five hundred dollars
($3,500) shall not be binding as to such excess until risks to the
amount of two hundred thousand dollars ($200,000) have been written
and all premiums paid thereon.
   (b) A risk of more than one thousand five hundred dollars ($1,500)
shall not be binding as to such excess until risks to the amount of
one hundred thousand dollars ($100,000) have been written and all
premiums paid thereon.
   (c) A risk regardless of amount, shall not be binding until risks
to the amount of seventy-five thousand dollars ($75,000) have been
written and all premiums paid thereon.



9084.5.  Such association shall not write insurance in excess of ten
thousand dollars ($10,000) on any one risk nor in excess of sixty
thousand dollars ($60,000) in any one city block within an
incorporated city without immediately reinsuring all the excess
amount. An association may write insurance for an amount not
exceeding sixty thousand dollars ($60,000) on any one risk, if the
excess over ten thousand dollars ($10,000) is reinsured as provided
in this section. Such associations may not accept reinsurance but may
reinsure risks if such reinsurance is by contracts and with
reinsurers which meet the standards therefor prescribed in Sections
922.1 to 922.8 of this code.



9085.  A risk shall not be written by such association except for
members in good standing on the books of the society forming the
association. A suspension or withdrawal from membership in such
society shall suspend the insurance until the member is restored to
good standing in the society and association. A restoration to
membership after suspension therefrom shall not extend the term of
the insurance.



9086.  All such associations shall classify the property insured by
them at the time of issuing policies on such property. The
classification shall be under different rates, corresponding as
nearly as practicable to the greater or less risk from fire loss
attached to the insured property.



9087.  No property within the corporate limits of any city or town
shall be insured except dwellings and the contents thereof, grange
halls and the contents thereof, other grange property, and any
buildings appurtenant thereto.


9087.5.  Section 9087 is not applicable to insurance covering an
insurable interest of a member in property which was insured by the
association prior to the inclusion of the property within the
corporate limits of a city.


9088.  Such association shall provide in its by-laws for the
ascertainment of loss or damage by fire, and for the payment thereof.



9089.  Such association by and in its own name may:
   (a) Sue and be sued.
   (b) Loan such funds as it has on hand in such manner as its
articles of association and its by-laws provide.
   (c) Own sufficient real property for its business purposes, and
such other real property as it becomes necessary to purchase on
foreclosure of its mortgages. Real estate obtained by such
foreclosure shall be sold and conveyed within five years from the
time title vests in the association.
   (d) Make such by-laws, not inconsistent with the laws of this
State, as are necessary for its government and for the transaction of
its business.


9090.  Such association creates a mutual agreement of its members to
participate in each other's loss by fire.



9091.  Every insured shall give to the association a written
instrument binding him to pay his share, proportioned to his
insurance in the association, of the expense of operation and of the
fire loss sustained by it during the term of his policy. Such loss
consists of amounts paid or owing to insureds by reason of losses
under the terms of fire policies issued by the association, together
with the necessary expenses of the association in respect to such
losses.


9092.  Persons insuring property with the association shall, at the
time of effecting the insurance, pay such a percentage in cash, and
such other charges, as are required by the rules or by-laws of the
association.


9093.  Policies of the association may be canceled by either party
thereto. In such case settlement or adjustment shall be made in
accordance with the terms of the by-laws of the association.



9094.  The secretary of each such association shall prepare an
annual statement showing the financial condition of the association,
including a statement of all assets and liabilities, as of the
thirty-first day of December then next preceding. Such statement
shall be verified under oath by the president and secretary of the
association. A copy of the verified statement shall be transmitted to
the commissioner on or before the first day of March of each year.



9095.  An association may, if it has issued an insurance policy
against fire, endorse that policy to extend the coverage thereof to
include loss or damage caused by windstorm, cyclone, tornado and
hail, explosion, riot, riot attending a strike, aircraft, vehicles
and smoke, and to include waiver of the fallen building clause. An
association may also insure against (a) water damage from plumbing
and heating systems, (b) rupture or bursting of steam or hot water
heating system, (c) vandalism or malicious mischief, (d) vehicles
owned or operated by the insured or by any tenant of the described
premises, (e) glass breakage, (f) ice, snow and freezing, (g) fall of
trees, (h) collapse, (i) burglary and theft, and (j) mysterious
disappearance.
   As used in this section "explosion" does not include explosions
(a) of any boiler, heater, or other fired pressure vessel, caused by
pressure of contents, (b) of any unfired pressure vessel or of any
piping caused by pressure of contents or vacuum, (c) of any engine,
turbine, compressor, pump, or wheel, (d) of any electrical apparatus,
or (e) of any other machine having moving or rotating parts. This
restricted definition of "explosion" does not exclude loss or damage
by fire only where fire ensues.
   As used in this paragraph, the terms "boiler," "heater," and
"pressure vessel," do not include hot water heaters used solely to
provide hot water for delivery to faucets for domestic purposes and
having a storage capacity of not more than 50 gallons.



9096.  An association certificated under this chapter is hereby
declared to be a charitable and benevolent institution, and all of
its funds shall be exempt from all and every state, county, district,
municipal, and school tax, other than taxes on real estate and
office equipment.



9097.  An association or organization certified under this chapter
may reinsure all of its policies with, and, upon the assumption of
all of its liabilities, may transfer its assets to, any mutual
insurer admitted to transact the classes of insurance embraced within
the policies issued by such organization or association, upon
compliance with Sections 9098 through 9103, inclusive.



9098.  The plan and agreement by which any such transaction
permitted by Section 9097 is to be effected shall be approved by the
board of directors or other governing body of such organization or
association and submitted to the commissioner accompanied by an
application for approval thereof and a fee of two hundred seven
dollars ($207).



9099.  The commissioner shall examine such plan and agreement and
may require such provisions to be inserted in the agreement and such
actions to be taken in connection with the transaction (including but
not limited to: (1) the terms of the reinsurance, transfer and
assumption, (2) the terms of the notice of the vote thereon by the
members of such organization or association, and (3) the manner and
form of voting thereon by such members) as he may deem necessary in
order that the transaction shall be fair and equitable to the members
of such organization or association.



9100.  When any such plan and agreement shall have been approved by
the commissioner with such changes, if any, required by him, the same
shall be approved by a vote of not less than two-thirds of those
members of such organization or association voting in person or by
proxy at a meeting of the members.



9101.  The meeting of members at which the transaction is voted upon
shall be preceded by a written or printed notice of the meeting and
of the purpose to vote thereat upon the plan or agreement for
reinsurance, transfer and assumption, addressed to each member of
record on the date of the notice and mailed at least 30 days before
the date fixed for the meeting. The presence in person or by proxy of
5 percent of the members of such organization or association
entitled to vote shall constitute a quorum unless a higher percentage
is required by the articles of incorporation, association, bylaws,
rules or regulations or other organization or governing documents. In
the absence of a quorum, the members present at the meeting in
person or by proxy may adjourn the meeting to a later date and no
further notice need be given of the date to which the meeting is
adjourned.


9102.  If the members vote to approve the plan of reinsurance,
transfer and assumption, a certified copy of all proceedings relating
thereto shall be filed with the commissioner. If the commissioner
finds that the proceedings have been in accordance with the law and
his requirements, he shall issue his certificate approving the plan
and the agreement and the transaction shall become effective at that
time or upon such later date as may be specified in the agreement.



9103.  The board of directors or other governing body of such
organization or association shall file with the Secretary of State a
duplicate original of the commissioner's certificate approving the
plan and agreement and thereupon such organization or association
shall cease to exist except for the purpose of completing the winding
up of its affairs.