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1011.5.             CONSENT TO TRANSFER; APPLICATION; FEES

1012.                DURATION OF ORDER; HEARING

1013.                COMMISSIONER’S POWER OF SUMMARY SEIZURE; GROUNDS

1014.                ASSISTANCE OF PEACE OFFICERS

1015.                PROCEDURE FOLLOWING SUMMARY SEIZURE

1016.                APPLICATION FOR LIQUIDATION ORDER; HEARING; COURT ORDER

1017.                ORDER DISSOLVING CORPORATION

1018.                RECORDATION OF COURT ORDER

1019.                DATE OF VESTING OF CLAIMANT’S RIGHTS

1020.                INJUNCTIONS; OTHER COURT ORDERS

1021.                NOTICE TO CLAIMANTS

1022.                PUBLICATION OF NOTICE

1023.                FORM AND CONTENTS OF CLAIM

1024.                FAILURE TO FILE CLAIMS; LIFE INSURANCE DEATH CLAIMS

1025.                UNLIQUIDATED CLAIMS

1025.5.             ALTERNATIVE PROCEDURES TO REQUIRING SEPARATE CLAIMS

1026.                THIRD PARTY LIABILITY CLAIMS

1026.1.             SUBROGATION TO RIGHTS OF THIRD PARTY CLAIMS

1027.                ALLOWANCE OF THIRD PARTY LIABILITY CLAIMS

1028.                DEFAULT OR COLLUSIVE JUDGEMENT AGAINST INSURED

1064.1.                DEFINITIONS

1064.2.                CONDUCT OF DELINQUENCY PROCEEDINGS AGAINST INSURERS DOMICILED IN THIS STATE

1064.3.             CONDUCT OF DELINQUENCY PROCEEDINGS AGAINST INSURERS NOT DOMIILED IN THIS STATE

1064.4.             FILING AND PROVING OF CLAIMS OF NONRESIDENTS AGAINST DELINQUENT INSURERS DOMICILED IN THIS STATE

1064.5.             FILING AND PROVING OF CLAIMS OF RESIDENTS AGAINST DELINQUENT INSURERS DOMICILED IN RECIPROCAL STATES

1064.6.             PRIORITY OF PREFERRED CLAIMS

1064.7.             PRIORITY OF SPECIAL DEPOSIT CLAIMS

1064.8.             PRIORITY OF SECURED CLAIMS

1064.9.             ATTACHMENT AND GARNISHMENT OF ASSETS

1064.10.            RIGHT OF DOMICILLIARY RECEIVER TO SUE IN THIS STATE

1064.11.            SEVERABILITY

1064.12.                       SHORT TITLE; UNIFORMITY OF INTERPRETATION; APPLICATION OF §1010 ET. SEQ.

STOP ORDERS OF COMMISSIONER

1065.1.             AUTHORITY OF COMMISSIONER TO MAKE ORDER; GROUNDS; HEARING; NOTICE

1065.2.             IRREPARABLE LOSS AND INJURY; ISSUANCE OF ORDER BEFORE HEARING; NOTICE OF HEARING; WAIVER OF HEARING; JUDICIAL REVIEW

1065.3.             ORDER CORRECTING ADVERSE CONDUCT OR CONDITIONS

1065.4.             JUDICIAL REVIEW OF ORDER’ TIME

1065.5.             FAILURE TO COMPLY WITH ORDER; PENALTIES

The superior court of the county in which the principal office of a person described in Section 1010 is located shall, upon the filing by the commissioner of the verified application showing any of the following conditions hereinafter enumerated to exist, issue its order vesting title to all of the assets of that person, wheresoever situated, in the commissioner or his or her successor in office, in his official capacity as such, and direct the commissioner forthwith to take possession of all of its books, records, property, real and personal, and assets, and to conduct, as conservator, the business of said person, or so much thereof as to the commissioner may seem appropriate, and enjoining said person and its officers, directors, agents, servants, and employees from the transaction of its business or disposition of its property until the further order of said court:

            (a) That such person has refused to submit its books, papers, accounts, or affairs to the reasonable inspection of the commissioner or his or her deputy or examiner.

            (b) That such person has neglected or refused to observe an order of the commissioner to make good within the time prescribed by law any deficiency in its capital if it is a stock corporation, or in its reserve if it is a mutual insurer.

            (c) That such person, without first obtaining the consent in writing of the commissioner, has transferred, or attempted to transfer, substantially its entire property or business or, without such consent, has entered into any transaction the effect of which is to merge, consolidate, or reinsure substantially its entire property or business in or with the property or business of any other person.

            (d) That such person is found, after an examination, to be in such condition that its further transaction of business will be hazardous to its policyholders, or creditors, or to the public.

            (e) That such person has violated its charter or any law of the state.

            (f) That any officer of such person refuses to be examined under oath, touching its affairs.

            (g) That any officer or attorney in fact of such person has embezzled, sequestered, or wrongfully diverted any of the assets of such person.

            (h) That a domestic insurer does not comply with the requirements for the issuance to it of a certificate of authority, or that its certificate of authority has been revoked; or

            (i) That the last report of examination of any person to whom the provisions of this article apply shows such person to be insolvent within the meaning of Article 13 (commencing with Section 980), Chapter 1, Part 2, Division 1; or if a reciprocal or interinsurance exchange, within the applicable provisions of Section 1370.2, 1370.4, 1371, or 1372; or if a life insurer, within the applicable provisions of Sections 10510 and 10511.

1011.5.             CONSENT TO TRANSFER; APPLICATION; FEES

The consent described in Section 1011(c) shall be obtained by filing  an application with the commissioner in a form to be prescribed by him accompanied by such additional information concerning the insurer, its condition and affairs as the commissioner requires.

            A fee of two thousand six hundred fifty-five dollars ($2,655) shall be paid to the commissioner for the filing of the application.

1012.                DURATION OF ORDER; HEARING

Said order shall continue in force and effect until, on the application either of the commissioner or of such person, it shall, after a full hearing, appear to said court that the ground for said order directing the commissioner to take title and possession does not exist or has been removed and that said person can properly resume title and possession of its property and the conduct of its business.

1013.                COMMISSIONER’S POWER OF SUMMARY SEIZURE; GROUNDS

Whenever it appears to the commissioner that any of the conditions set forth in section 1011 exist or that irreparable loss and injury to the property and business of a person specified in section 1010 has occurred or may occur unless the commissioner so act immediately, the commissioner, without notice and before applying to the court for any order, forthwith shall take possession of the property, business, books, records and accounts of such person, and of the offices and premises occupied by it for the transaction of its business, and retain possession subject to the order of the court.

Any person having possession of and refusing to deliver any of the books, records or assets of a person against whom a seizure order has been issued by the commissioner, shall be guilty of a misdemeanor and punishable by fine not exceeding one thousand dollars or imprisonment not exceeding one year, or both such fine and imprisonment.

1014.                ASSISTANCE OF PEACE OFFICERS

Whenever the commissioner makes any seizure as provided in section 1013, it shall, on the demand of the commissioner, be the duty of the sheriff of any county of this State, and of the police department of any municipal corporation therein, to furnish him with such deputies, patrolmen or officers as may be necessary to assist the commissioner in making and enforcing any such seizure.

1015.                PROCEDURE FOLLOWING SUMMARY SEIZURE

Immediately after such seizure, the commissioner shall institute a proceeding as provided for in section 1011 and thereafter shall proceed in accordance with the provisions of this article.

1016.                APPLICATION FOR LIQUIDATION ORDER; HEARING; COURT ORDER

If at any time after the issuance of an order under section 1011, or if at the time of instituting any proceeding under this article, it shall appear to the commissioner that it would be futile to proceed as conservator with the conduct of the business of such person, he may apply to the court for an order to liquidate and wind up the business of said person.

Upon a full hearing of such application, the court may make an order directing the winding up and liquidation of the business of such person by the commissioner, as liquidator, for the purpose of carrying out the order to liquidate and wind up the business of such person.

1017.                ORDER DISSOLVING CORPORATION

(a) In the commissioner's application for an order for the liquidation of a domestic corporation, or at any time thereafter, the commissioner may apply for, and the court shall make, an order dissolving the corporation.

(b) At any time during a proceeding for the liquidation of a domestic corporation authorized under Section 1016, the commissioner may apply for, and the court shall make, an order to permit the commissioner to sell the charter and license of that corporation while continuing to administer and distribute the remaining assets according to the provisions of this article.

The order shall provide that the liabilities of the domestic corporation may not be transferred with the charter and license.

In continuing the administration and distribution of assets the commissioner need not establish a liquidating trust or other, similar entity.

1018.                RECORDATION OF COURT ORDER

The recording in the office of a county recorder of any county in the State of an order entered pursuant to section 1011, 1016 or 1017 shall impart the same notice that would be imparted by the recordation of a deed, bill of sale or other evidence of title duly executed by such person.

1019.                DATE OF VESTING OF CLAIMANT’S RIGHTS

Upon the issuance of an order of liquidation under section 1016, the rights and liabilities of any such person and of creditors, policyholders, shareholders and members, and all other persons interested in its assets, including the State of California, shall, unless otherwise directed by the court, be fixed as of the date of the entry of the order in the office of the clerk of the county wherein the application was made.

1020.                INJUNCTIONS; OTHER COURT ORDERS

Upon the issuance of an order either under Section 1011 or 1016, or at any time thereafter, the court shall issue such other injunctions or orders as may be deemed necessary to prevent any or all of the following occurrences:

(a) Interference with the commissioner or the proceeding.

(b) Waste of assets of such person.

(c) The institution or prosecution of any actions or proceedings.

(d) The obtaining of preferences, judgments, attachments, or other liens against such person or its assets.

(e) The making of any levy against any such person or its assets.

(f) The sale or deed for nonpayment of taxes or assessments levied by any taxing agency of property:

(1) Owned by such person.

(2) Upon which such person holds an encumbrance.

(3) Upon which such person has prior thereto commenced an action to foreclose any deed of trust or mortgage or has exercised the power of sale under any trust deed or mortgage which sale or foreclosure proceedings have not yet been completed or upon which no trustee's deed or judgment of court or sheriff's certificate of sale has been issued.

"Taxing agency" as used in this section has the meaning ascribed to it by Section 121 of the Revenue and Taxation Code.

The injunctions or orders authorized by this subdivision may be modified, dissolved or rescinded by the court on motion of the commissioner, the State Controller, the person charged with the collection of taxes or assessments on such property, or any person beneficially interested in the property.

The recording in the office of the county recorder of any county in the State of an order or injunction issued pursuant to this section, shall constitute service of such order or injunction upon any taxing agency with respect to property or interests therein located in such county.

(g) Any managing general agent or attorney in fact from withholding from the commissioner any books, records, accounts, documents or other writing relating to the business of such person; provided, however, that, if by contract or otherwise any of the same are the property of such an agent or attorney, the same shall be returned when no longer necessary to the commissioner or at any time the court after notice and hearing shall so direct.

1021.                NOTICE TO CLAIMANTS

(a) Upon the making of an order to liquidate the business of such person, the commissioner shall publish notice to its policyholders, creditors, shareholders, and all other persons interested in its assets.          

The order and the notice shall require claimants to file their claims with the commissioner, together with proper proofs thereof, within six months to one year, at the commissioner's discretion, after the date of first publication of such notice, in the manner specified in this article.

(b) The time period specified in subdivision (a) shall not apply to the California Insurance Guarantee Association or the California Life and Health Insurance Guarantee Association provided it files with the commissioner a notice of possible claim within such six-month period and files actual claim or claims within such periods of time as may be permitted by order of court.

(c) Notwithstanding the provisions of subdivision (a), both of the following apply:

(1) If the commissioner determines that the business subject to liquidation order possesses, or is likely to possess, insufficient assets to permit significant distribution to a person interested in those assets, the commissioner may decline to handle a claim submitted pursuant to subdivision (a), as long as the notice requirements of subdivision (a) and Section 1022 are observed.

(2) If the commissioner reasonably determines that the business subject to liquidation order possesses, or is likely to possess, insufficient assets to permit significant distribution of funds to pay the expenses of administration under this article, as provided in paragraph (1) of subdivision (a) of Section 1033, the commissioner may decline to continue, and may abandon, the insolvency proceeding upon providing notice pursuant to subdivision (a) and Section 1022.

1022.                PUBLICATION OF NOTICE

Such notice shall be published in a newspaper of general circulation, published in the county in which the proceeding is pending, and in the Counties of Alameda, Los Angeles, Sacramento, San Diego, San Francisco, and Santa Clara, not less than once a week for four successive weeks.

A copy of the notice, accompanied by an affidavit of due publication, including a statement of the date of first publication, shall be filed with the clerk of the court.

1023.                FORM AND CONTENTS OF CLAIM

A claim must set forth, under oath, on the form prescribed by the commissioner:

(a) The particulars thereof, and the consideration therefor.

(b) Whether said claim is secured or unsecured, and, if secured, the nature and amount of such security.

(c) The payments, if any, made thereon.

(d) That the sum claimed is justly owing from such person to the claimant.

(e) That there is no offset to the claim.

(f) Such other data or supporting documents as the commissioner requires.

1024.                FAILURE TO FILE CLAIMS; LIFE INSURANCE DEATH CLAIMS

Unless such claim is filed in the manner and within the time provided in section 1021, it shall not be entitled to filing or allowance, and no action may be maintained thereon.

In the liquidation, pursuant to the provisions of this article, of any domestic insurer which has issued policies insuring the lives of persons, the commissioner shall, within thirty days after the last day set for the filing of claims, make a list of the persons who have not filed proofs of claim with him and to whom, according to the books of said insurer, there are amounts owing under such policies, and he shall set opposite the name of each person the amount so owing to such person.

Each person whose name shall appear upon said list shall be deemed to have duly filed, prior to the last day set for the filing of claims, a claim for the amount set opposite his name on said list.

1025.                UNLIQUIDATED CLAIMS

Claims founded upon unliquidated or undetermined demands must be filed within the time limit provided in this article for the filing of claims, but claims founded upon such demands shall not share in any distribution to creditors of a person proceeded against under section 1016 until such claims have been definitely determined, proved and allowed.

Thereafter, such claims shall share ratably with other claims of the same class in all subsequent distributions.

An unliquidated or undetermined claim or demand within the meaning of this article shall be deemed to be any such claim or demand upon which a right of action has accrued at the date of the order of liquidation and upon which the liability has not been determined or the amount thereof liquidated.

1025.5.             ALTERNATIVE PROCEDURES TO REQUIRING SEPARATE CLAIMS

Notwithstanding the provisions of Sections 1021 to 1025, inclusive, the commissioner may, in lieu of requiring claimants to file separate claims:

(a) File a claim himself or herself on behalf of all claimants for return premiums.

(b) Permit any assignee of the right of the insured to a return premium by virtue of a valid assignment, as security or otherwise, made prior to an order under Section 1011 or a seizure under Section 1013, whichever is earlier in time in the particular case, to file one claim as assignee on behalf of all insureds having assigned rights to the assignee, which shall set forth such information as may be required under Section 1023.

(c) Permit the California Insurance Guarantee Association under subdivision (b) of Section 1063.4, or the California Life and Health Insurance Guarantee Association under paragraph (1) of subdivision (m) of Section 1067.07 to file one claim, for its association, combining all assigned claims and setting forth the information that the commissioner may require under Section 1023.

1026.                THIRD PARTY LIABILITY CLAIMS

Whenever any person has a cause of action against an insured and such cause is covered by a liability policy, such person, if the insurer is adjudged insolvent, may file a claim in the liquidation proceeding even if the claim is undetermined or unliquidated.

1026.1.             SUBROGATION TO RIGHTS OF THIRD PARTY CLAIMS

Where a claim arising out of a policy of insurance has been filed by a third party and approved by the liquidator and such claim has subsequently been paid or satisfied, either wholly or in part, by the transfer of anything of value, either voluntarily or by process, from the insured of the person in liquidation to such third party, then upon the filing with the liquidator of proof of the making and value of such transfer, to the extent and in the manner required by the liquidator, the insured shall be subrogated to the rights of the third party claimant to the extent that the claim has been satisfied and discharged, but the rights of the insured shall not exceed the face value of such claim and if the insured has theretofore filed a claim covering the same subject matter, he is entitled to only one recovery.

1027.                ALLOWANCE OF THIRD PARTY LIABILITY CLAIMS

A claim by a third party founded upon an insurance policy may be allowed by the liquidator without requiring such claim to be reduced to judgment, provided it can be reasonably inferred from the proof presented that the claimant would be able to obtain a judgment upon his cause of action against the insured and that such judgment would represent a liability of the person in liquidation under the policy of insurance upon which such claim is founded.

In the event several claims founded upon one policy or bond are filed, and the aggregate amount of such claims exceeds the liability limit of said policy or bond, and one or more of such claims is unliquidated and undetermined, then all of such claims shall be deemed unliquidated and undetermined; provided, however, that should one or more of said claims become determined and proved within the time provided in this article, the liquidator, upon any distribution to creditors, shall impound the distribution percentage of the face amount of said claim or claims so determined and proved, not exceeding the policy or bond limit, and upon such claim or claims becoming liquidated as to amount, the liquidator shall release to such claimant the distribution percentage of the final liquidated value of such claims out of the funds so impounded.

1028.                DEFAULT OR COLLUSIVE JUDGEMENT AGAINST INSURED