California Insurance Code Section 100 through 124
Definitions of Selected Lines and Classes of Insurance
Lines of Insurance as defined in
California Insurance Code Section 100 through 124
Aircraft
Annuity
Automobile
Boiler and Machinery
Burglary
Commercial Automobile
Commercial
Earthquake
Fidelity and Surety
Fire and Allied Lines
Flood
Health
Homeowners
Life
Marine
Medical Malpractice
Mortgage Guaranty
Other Liability
Product Liability
Title
Workers' Compensation
Lines of Insurance that Include Several Classes of Insurance
Life
101. Life insurance includes insurance upon the lives of persons or appertaining thereto, and the granting, purchasing, or disposing of annuities.
Fire
102. Fire insurance includes:
(a) Insurance against loss by fire, lightning, windstorm, tornado, or earthquake.
(b) Insurance against loss of, or destruction of, or damage to, any of the following property, when such insurance includes loss thereof by fire and excludes coverage of property while in the custody of, or possession of, or being transported by, any carrier for hire or in the mail:
1. Accounts, books, maps, manuscripts, indexes and other valuable papers, documents and records incidental to the business or profession or activity in which the insured is engaged, resulting from any cause, but excluding any article constituting stock in trade or used as a sample or sold or held for sale.
2. Moneys, stamps, coins, bullion, securities, notes, drafts, acceptances or instruments of like kind or character, resulting from any cause, except:
(i) Forgery.
(ii) Any dishonest, fraudulent or criminal act of any officer, employee, partner, director, trustee or authorized representative of the insured.
(c) Insurance by means of an all-risk policy of the type commonly known as the "Personal Property Floater" against any and all kinds of loss of or damage to, or loss of use of, any personal property other than merchandise.
The provisions of Section 2070 shall not apply to insurance written pursuant to subdivisions (b) or (c).
>
Marine insurance
103. Marine insurance includes insurance against any and all kinds of loss of or damage to:
(a) Vessels, craft, aircraft, cars, automobiles and vehicles of every kind (excluding aircraft and automobiles operating under their own power or while in storage not incidental to transportation), as well as all goods, freights, cargoes, merchandise, effects, disbursements, profits, money, bullion, securities, choses in action, evidences of debt, valuable papers, bottomry and respondentia interests and all other kinds of property, and interests therein, in respect to, appertaining to or in connection with any and all risks or perils of navigation, transit, or transportation, including war risks, on or under any seas or other waters, on land or in the air, or while being assembled, packed, crated, baled, compressed or similarly prepared for shipment or while awaiting the same, or during any delays, storage, transshipment, or reshipment incident thereto including marine builder's risks, and all personal property floater risks.
(b) Person or to property in connection with or appertaining to a marine, inland marine, transit or transportation insurance including liability for loss of or damage arising out of or in connection with the construction, repair, maintenance or use of the subject matter of such insurance (but not including life insurance or surety bonds); but except as herein specified, shall not mean insurances against loss by reason of bodily injury to the person. Inland marine insurance shall be deemed to include hull insurance on water pleasure craft not used for commercial purposes of a size and type to be determined by the commissioner.
(c) Precious stones, jewels, jewelry, gold, silver and other precious metals, whether used in business or trade or otherwise and whether the same be in course of transportation or otherwise.
>
Title Insurance
104. Title insurance means insuring, guaranteeing or indemnifying owners of real or personal property or the holders of liens or encumbrances thereon or others interested therein against loss or damage suffered by reason of:
(a) Liens or encumbrances on, or defects in the title to said property;
(b) Invalidity or unenforceability of any liens or encumbrances thereon; or
(c) Incorrectness of searches relating to the title to real or personal property.
>
Surety Insurance
105. Surety insurance includes:
(a) The guaranteeing of behavior of persons and the guaranteeing of performance of contracts (including executing or guaranteeing bonds and undertakings required or permitted in all actions or proceedings or by law allowed), other than insurance policies and other than for payments secured by a mortgage, deed of trust, or other instrument constituting a lien or charge on real estate.
(b) Insurance against loss resulting from the forgery or alteration of any instrument of any kind or character or of any signature thereon. Nothing in this section shall be deemed to limit any of the powers of title insurers.
(c) Any of the following insurance when included as a part of contract containing any such guarantee of behavior or performance or in a contract indemnifying any bank, banker, broker, financial or moneyed corporation or association, any state, political subdivision, public or municipal corporation, or any officer of any state, political subdivision, public or municipal corporation: Insurance indemnifying the insured named therein against loss or destruction from any cause of any evidences of debt of any kind or character, evidences of ownership of any kind or character, deeds, mortgages, warehouse receipts, bills of lading, certificates of stock, bonds, notes, drafts, checks, instruments of similar character, stamps, documents, money, precious metals of any kind or character, refined or unrefined, and articles made therefrom, jewelry, watches, necklaces, bracelets, gems and precious and semiprecious stones, and also against loss or damage, except by fire, to the insured's premises, furnishings, fixtures, equipment, safes and vaults therein caused by burglary, robbery, holdup, theft or larceny or attempt thereat. No such insurance indemnifying against loss of any property as specified herein shall indemnify against loss of any such property occurring while in the mail or in the exclusive custody or possession of a common carrier for the purpose of transportation, except for the purpose of transportation by an armored motor vehicle.
(d) No insurance may be written as surety insurance if it falls within the definition of financial guaranty insurance as set forth in Section 12100.
>
Disability Insurance
106. Disability insurance includes insurance appertaining to injury, disablement or death resulting to the insured from accidents, and appertaining to disablements resulting to the insured from sickness.
>
Plate Glass Insurance
107. Plate glass insurance includes insurance against breakage of glass.
>
Liability Insurance
108. Liability insurance includes:
(a) Insurance against loss resulting from liability for injury, fatal or nonfatal, suffered by any natural person, or resulting from liability for damage to property, or property interests of others but does not include worker's compensation, common carrier liability, boiler and machinery, or team and vehicle insurance.
(b) (1) With respect to operations or property covered by a policy of liability insurance as defined in subdivision (a), insurance of medical, hospital, surgical and funeral loss or expense of the insured or other persons injured, and in the case of an automobile liability policy disability benefits to the insured or other persons injured and in the event of their death, funeral and accidental death benefits to their dependents, beneficiaries or personal representatives irrespective of legal liability of the insured, when issued with or supplemental to the insurance defined in subdivision (a);
(2) When issued with or supplemental to the insurance defined in subdivision (a), disability insurance covering the insured and members of his household, or other persons who customarily operate any automobile covered by such a policy and who are named in such policy; and such disability insurance may cover against accidental injury, death or dismemberment caused by any or all hazards as defined in such coverage;
(c) Insurance covering injuries sustained by an insured resulting from a tort committed by a third party against which such third party is not himself covered by liability insurance;
(d) Insurance coverage against the legal liability of the insured, and against loss, damage, or expense incident to a claim arising out of the death or injury of any person as the result of negligence or malpractice in rendering professional services by any person who holds a certificate or license issued pursuant to Chapter 5 (commencing with Section 2000) of Division 2 of the Business and Professions Code, a license issued pursuant to the Osteopathic Initiative Act, or license as a community clinic defined in subdivision (a) of Section 1203 of the Health and Safety Code, or a license as a health facility pursuant to Chapter 2 (commencing with Section 1250) of Division 2 of the Health and Safety Code.
(e) The provisions of this code relating to disability insurance do not apply to insurance defined in this section.
Insurers admitted to transact liability insurance are also deemed to be admitted to transact workers' compensation insurance for the purpose of covering those persons defined as employees of subdivision (d) of Section 3351 of the Labor Code.
>
Product Liability
Coverage usually provided under the COMMERCIAL GENERAL LIABILITY INSURANCE (CGL); it can also be purchased separately. [Class: 108 Liability]
Product Liability Line of Insurance - 108. Liability insurance includes:
(a) Insurance against loss resulting from liability for injury, fatal or nonfatal, suffered by any natural person, or resulting from liability for damage to property, or property interests of others but does not include worker's compensation, common carrier liability, boiler and machinery, or team and vehicle insurance.
(b) (1) With respect to operations or property covered by a policy of liability insurance as defined in subdivision (a), insurance of medical, hospital, surgical and funeral loss or expense of the insured or other persons injured, and in the case of an automobile liability policy disability benefits to the insured or other persons injured and in the event of their death, funeral and accidental death benefits to their dependents, beneficiaries or personal representatives irrespective of legal liability of the insured, when issued with or supplemental to the insurance defined in subdivision (a);
(2) When issued with or supplemental to the insurance defined in subdivision (a), disability insurance covering the insured and members of his household, or other persons who customarily operate any automobile covered by such a policy and who are named in such policy; and such disability insurance may cover against accidental injury, death or dismemberment caused by any or all hazards as defined in such coverage;
(c) Insurance covering injuries sustained by an insured resulting from a tort committed by a third party against which such third party is not himself covered by liability insurance;
(d) Insurance coverage against the legal liability of the insured, and against loss, damage, or expense incident to a claim arising out of the death or injury of any person as the result of negligence or malpractice in rendering professional services by any person who holds a certificate or license issued pursuant to Chapter 5 (commencing with Section 2000) of Division 2 of the Business and Professions Code, a license issued pursuant to the Osteopathic Initiative Act, or license as a community clinic defined in subdivision (a) of Section 1203 of the Health and Safety Code, or a license as a health facility pursuant to Chapter 2 (commencing with Section 1250) of Division 2 of the Health and Safety Code.
(e) The provisions of this code relating to disability insurance do not apply to insurance defined in this section.
Insurers admitted to transact liability insurance are also deemed to be admitted to transact workers' compensation insurance for the purpose of covering those persons defined as employees of subdivision (d) of Section 3351 of the Labor Code.108.
>
Workers' Compensation Insurance
109. Workers' compensation insurance includes insurance against loss from liability imposed by law upon employers to compensate employees and their dependents for injury sustained by the employees arising out of and in the course of the employment, irrespective of negligence or of the fault of either party.
Common Carrier Liability Insurance
110. Common carrier liability insurance includes insurance against loss resulting from liability of a common carrier for accident or injury, fatal or nonfatal, to any person but does not include liability or workers' compensation insurance.
>
Boiler and Machinery Insurance
111. Boiler and machinery insurance includes insurance against loss of property and liability for damage to persons or property from explosion of, or accident to, boilers, tanks, pipes, pressure vessels, engines, wheels, electrical machinery, or apparatus connected therewith or operating thereby.
>
Burglary Insurance
112. Burglary insurance includes:
(a) Insurance against loss by burglary or theft or both.
(b) Insurance against loss of, or destruction of, or damage to, any of the following property, resulting from any cause, when such insurance includes loss thereof by burglary or theft, or both, and excludes coverage of property while in the custody of, or possession of, or being transported by, any carrier for hire or in the mail: Moneys, stamps, coins, bullion, securities, notes, drafts, acceptances or instruments of like kind or character, accounts, books, maps, manuscripts, indexes and other valuable papers, documents and records incidental to the business or profession or activity in which the insured is engaged.
(c) Insurance by means of an all-risk policy of the type commonly known as the "Personal Property Floater" against any and all kinds of loss of or damage to, or loss of use of, any personal property other than merchandise.
>
Credit Insurance
113. Credit insurance includes insurance of persons engaged in business against loss by reason of extending credit to those dealing with them, and insurance against loss from the failure of persons to meet existing or contemplated obligations to the insured. However, no insurance may be written as credit insurance if it falls within the definition of financial guaranty insurance as set forth in Section 12100.
>
Sprinkler Insurance
114. Sprinkler insurance includes insurance against loss through damage by water to goods or premises arising from the breakage or leakage of sprinklers, pumps, or other apparatus placed for extinguishing fires, or loss arising from the breakage or leakage of water pipes, or through accidental injury to such sprinklers, pumps, or other apparatus.
>
Team and Vehicle Insurance
115. Team and vehicle insurance includes insurance against loss through damage or legal liability for damage, to property caused by the use of teams or vehicles other than ships, boats, or railroad rolling stock, whether by accident or collision or by explosion of engine, tank, boiler, pipe, or tire of the vehicle, and insurance against theft of the whole or part of such vehicle.
>
Automobile Insurance
116. (a) Automobile insurance includes insurance of automobile owners, users, dealers, or others having insurable interests therein, against hazards incident to ownership, maintenance, operation, and use of automobiles, other than loss resulting from accident or physical injury, fatal or nonfatal, to, or death of, any natural person.
(b) Automobile insurance also includes any contract of warranty, or guaranty that promises service, maintenance, parts replacement, repair, money, or any other indemnity in event of loss of or damage to a motor vehicle or any part thereof from any cause, including loss of or damage to or loss of use of the motor vehicle by reason of depreciation, deterioration, wear and tear, use, obsolescence, or breakage if made by a warrantor or guarantor who or which as such is doing an insurance business.
(c) The making of a contract covering only defects in material and workmanship, which may include towing and substitute transportation, in exchange for a separately stated charge where it is merely incidental to the business of selling or leasing automobiles, shall not be deemed insurance, provided, that the maker of the contract has an insurance policy with an admitted automobile insurer providing coverage for the making of those contracts. The policy shall include a loss payee endorsement that provides coverage to any lending institution as its interest may appear. In addition, the contract shall conspicuously state the name and address of the licensed underwriting insurer and contain a statement that the holder shall be entitled to make a direct claim against that insurer upon the failure of the maker to pay any claim within 60 days after proof of loss has been filed with the maker. The requirements of this section shall not apply where the maker is a manufacturer, distributor, or importer of automobiles.
(d) A contract covering only defects in material and workmanship, which may include towing and substitute transportation, in exchange for a separately stated charge, where the contract is sold by an automobile dealer incidental to the automobile dealer's business of selling or leasing automobiles and the legal obligor is other than the automobile dealer shall not be deemed insurance, provided that the legal obligor of the contract complies with all of the following requirements:
(1) Maintain an insurance policy with an admitted automobile insurer providing coverage for the obligation of those contracts. The policy shall include a loss payee endorsement that provides coverage to any lending institution as its interest may appear. In addition, the contract shall conspicuously state the name and address of the licensed underwriting insurer and contain a statement that the holder shall be entitled to make a direct claim against that insurer upon the failure of the legal obligor to pay any claim within 60 days after proof of loss has been filed with the party designated in the contract.
(2) Possess a fire and casualty broker agent license.
(3) Comply with the requirements of subparagraph (A) or (B), as follows:
(A) Comply with both of the following:
(i) Maintain a funded reserve account for its obligations under its contracts issued and outstanding in this state. The reserves shall not be less than 40 percent of gross consideration received, less claims paid, on the sale of the contract for all in-force contracts. The reserve account shall be subject to examination and review by the commissioner.
(ii) Place in trust with the Commissioner a financial security deposit having a value of not less than 5 percent of the gross consideration received, less claims paid, on the sale of the contract for all contracts issued and in force, but not less than twenty-five thousand dollars ($25,000) consisting of one of the following:
(I) A surety bond issued by an authorized surety.
(II) Securities of the type eligible for deposit by admitted insurers.
(III) Cash.
(IV) A letter of credit issued by a qualified financial institution.
(V) Another form of security prescribed by regulations issued by the Commissioner.
(B) (i) Maintain a net worth of one hundred million dollars ($100,000,000).
(ii) An obligor that complies with this subparagraph shall, upon request, provide the commissioner with a copy of the obligor's financial statements or the obligor's parent company's financial statements. The financial statement shall be the most recent Form 10-K filed with the Securities and Exchange Commission within the last calendar year, or if the obligor does not file with the Securities and Exchange Commission, a copy of the obligor's audited financial statements, that shows a net worth of the obligor or its parent company of at least one hundred million dollars ($100,000,000). If the obligor's parent company's Form 10-K or audited financial statements are filed to meet the obligor's financial stability requirement, then the parent company shall agree to guarantee the obligations of the obligor relating to contracts of the obligor in this state.
(e) The doing or proposing to do any business in substance equivalent to the business described in this section in a manner designed to evade the provisions of this section is the doing of an insurance business.
>
Mortgage Insurance
117. Mortgage insurance includes the guaranteeing of the payment of the principal, interest and other sums agreed to be paid under the terms of any note or bond secured by mortgage, or other sums secured under the terms of any such mortgage, in its entirety, or of any undivided or other partial interest in any such mortgage, or in a group of such mortgages, and the guaranteeing or insuring, directly or indirectly, against loss thereon.
>
AircraftInsurance
118. Aircraft insurance includes insurance of aircraft owners, users, dealers or others having insurable interests therein, against loss through hazards incident to ownership, maintenance, operation and use of aircraft, other than against loss resulting from accident or physical injury, fatal or nonfatal, to any natural person.
>
Mortgage Guaranty Insurance
119. Mortgage guaranty insurance includes insurance against financial loss by reason of the nonpayment of principal, interest and other sums agreed to be paid under the terms of any note or bond or other evidence of indebtedness secured by a mortgage, deed of trust, or other instrument constituting a lien or charge on real estate.
>
Insolvency Insurance
119.5 Insolvency insurance includes insurance against loss arising from the failure of an insolvent insurer to discharge its obligations under its insurance policies.
>
Legal Insurance
119.6 Legal insurance includes the assumption of a contractual obligation to reimburse the insured against all or a portion of his fees, costs, and expenses related to or arising out of services performed by or under the supervision of an attorney who is an active member of the bar of any jurisdiction or jurisdictions of the United States, in which these legal services are performed. Legal insurance does not include any of the following:
(a) Retainer contracts made by an individual lawyer or law firm with an individual client with the fee based on an estimate of the nature and the amount of services that will be provided to that specific client, and similar contracts made with a group of clients involved in the same or closely related legal matters (such as class actions);
(b) Plans providing no benefits other than consultation and advice on matters in connection with, or a part of, referral services.
(c) Plans providing limited benefits on simple legal matters on a voluntary and informal basis, not involving a legally binding promise, in the context of an employment or educational or similar relationship; or
(d) Legal services provided by labor unions or employee associations to their members in matters relating to employment or occupation.
(e) Legal service incidental to other insurance coverages.
The foregoing is not intended as an exclusive list of legal services plans or arrangements which do not constitute legal insurance as defined by this section.
>
Miscellaneous Insurance
120. Miscellaneous insurance includes insurance against loss from damage done, directly or indirectly by lightning, windstorm, tornado, earthquake or insurance under an open policy indemnifying the producer of any motion picture, television, theatrical, sport, or similar production, event, or exhibition against loss by reason of the interruption, postponement, or cancellation of such production, event, or exhibition due to death, accidental injury, or sickness preventing performers, directors, or other principals from commencing or continuing their respective performance or duties; and any insurance not included in any of the foregoing classes, and which is a proper subject of insurance.
>
Scope of Class
121. Scope of Class. Except as otherwise stated, the enumeration in this chapter of the kinds of insurance in a particular class does not limit any such kind to any one of such particular classes, inasmuch as the classification of similar insurance may vary with the subject matter, risk, and connected insurances; but the fact that similar kinds of insurance occur in different classes does not extend or change the scope of any such class.
>
Insurers Admitted to Transact - Additional Underwriting Powers
122. Insurers admitted to transact fire, plate glass, liability, burglary and miscellaneous insurance; additional underwriting powers. (a) An insurer admitted for all the classes of insurance defined in Sections 102, 107, 108, 112 and 120 is authorized, in addition to the underwriting powers granted by such classes, to include any and all insurance described in paragraph (b) in a policy which contains fire coverage written on a form complying with either Section 2070 or Section 2071 and which provides insurance covering only noncommercial risks and covering either residence properties (not more extensive than a four-family dwelling) and appurtenances, or the contents thereof other than merchandise, or both.
(b) Such insurance is any or all insurance against all risks of physical loss of, damage to, or personal liability (except workers' compensation) for injury to person or damage to property incident to, any or all of the following:
(1) The location described and property covered by the fire insurance policy as described in subdivision (a),
(2) Personal effects,
(3) Boats not over 16 feet in length (including furnishings, equipment, outboard motors, and trailers); provided the physical loss or damage coverage does not exceed five hundred dollars ($500),
(4) Personal property intended primarily for residential or recreational use, (excluding boats except as provided above),
(5) Farm implements or self-propelled vehicles, excluding automobiles and aircraft, and,
(6) Horses, including accouterments and vehicles or implements to be drawn thereby.
>
Insurers Admitted to Transact Liability Insurance
123. Insurer admitted to transact liability insurance; extension to include team and vehicle insurance. An insurer admitted to transact liability insurance may extend such insurance on noncommercial or farm risks to include insurance of the legal liability of the insured for damage to property caused by use of "teams" or "vehicles" as the meaning thereof is limited by Section 115.
>
Financial Guaranty Insurance
124. "Financial guaranty insurance" means that insurance as defined by California Insurance Code Section 12100 (noted below).
INSURANCE CODE SECTION 12100-12122
12100. As used in this article:
(a) (1) "Financial guaranty insurance" means a surety bond, insurance policy or, when issued by an insurer, an indemnity contract and any guaranty similar to the foregoing types, under which loss is payable upon proof of occurrence of financial loss to an insured claimant, obligee, or indemnitee as a result of any of the following events:
(A) Failure of any obligor on any debt instrument or other monetary obligation (including common or preferred stock guarantied under a surety bond, insurance policy, or indemnity contract) to pay when due principal, interest, premium, dividend, purchase price of or on the instrument or obligation, or other monetary payment when due when the failure is the result of a financial default or insolvency, regardless of whether the obligation is incurred directly or as guarantor by or on behalf of another obligor that has also defaulted.
(B) Changes in the levels of interest rates, whether short or long term, or the differential in interest rates between various markets or products.
(C) Changes in the rate of exchange of currency.
(D) Changes in the value of financial or commodity indices, or price levels in general.
(E) Other events that the commissioner determines by order, regulation, or written consent are substantially similar to any of the foregoing.
(2) Notwithstanding paragraph (1), "financial guaranty insurance" shall not include any of the following:
(A) Insurance of any loss resulting from any event described in paragraph (1), if the loss is payable only upon the occurrence of any of the following, as specified in a surety bond, insurance policy, or indemnity contract:
(i) A fortuitous physical event.
(ii) A failure of or deficiency in the operation of equipment.
(iii) An inability to extract or recover a natural resource.
(B) Surety insurance as authorized by Section 105.
(C) Credit unemployment insurance, meaning insurance on a debtor in connection with a specific loan or other credit transaction, to provide payments to a creditor in the event of unemployment of the debtor for the installments or other periodic payments becoming due while a debtor is unemployed.
(D) Credit insurance authorized by Section 113.
(E) Guaranteed investment contracts issued by life insurance companies which provide that the life insurer itself will make specified payments in exchange for specific premiums or contributions.
(F) Mortgage insurance authorized by Section 117.
(G) Mortgage guaranty insurance authorized by Section 119.
(H) Indemnity contracts or similar guaranties, to the extent that they are not otherwise limited or proscribed by this article, in which a life insurer does any of the following:
(i) Guaranties its obligations or indebtedness or the obligations or indebtedness of a subsidiary (as defined in Section 1215) other than a financial guaranty insurance corporation; provided that:
(I) To the extent that any such obligations or indebtedness are backed by specific assets, those assets shall at all times be owned by the life insurer or the subsidiary.
(II) In the case of the guaranty of the obligations or indebtedness of the subsidiary that are not backed by specific assets of the life insurer, the guaranty terminates once the subsidiary ceases to be a subsidiary.
(ii) Guaranties obligations or indebtedness (including the obligation to substitute assets where appropriate) with respect to specific assets acquired by a life insurer in the course of normal investment activities and not for the purpose of resale with credit enhancement, or guaranties obligations or indebtedness acquired by its subsidiary, provided that the assets acquired pursuant to this clause have been either of the following:
(I) Acquired by a special purpose entity, whose sole purpose is to acquire specific assets of the life insurer or the subsidiary and issue securities or participation certificates backed by the assets.
(II) Sold to an independent third party.
(iii) Guaranties obligations or indebtedness of an employee or agent of the life insurer.
(I) Any cramdown bond or mortgage repurchase bond, as those phrases are used by nationally recognized rating agencies in respect of mortgage backed securities.
(J) Residual value insurance.
(K) Any other form of insurance covering risks that the commissioner determines by order, regulation, or written consent to be substantially similar to any of the foregoing.
(b) "Affiliate" means a person that, directly or indirectly, owns at least 10 but less than 25 percent of the financial guaranty insurance corporation or that is at least 10 percent but less than 25 percent, directly or indirectly, owned by a financial guaranty insurance corporation.
(c) "Asset-backed securities" means securities of an issuer provided that both of the following apply:
(1) The issuer of the securities is a special purpose corporation, trust, or other entity, or, provided that the securities constitute an insurable risk, is a bank, trust company, or other financial institution, deposits in which are insured by the Bank Insurance Fund or the Savings Association Insurance Fund of the Federal Deposit Insurance Corporation or any successors thereto.
(2) The securities are related to a pool of assets so that all of the following apply:
(A) The pool of assets has been conveyed, pledged, or otherwise transferred to or is otherwise owned or acquired by the issuer.
(B) The pool of assets backs the securities issued.
(C) No asset in the pool has a value exceeding 20 percent of the aggregate value of the pool.
(d) "Average annual debt service" means the amount of insured unpaid principal and interest on an obligation multiplied by the number of the insured obligations (assuming that each obligation represents a $1,000 par value), divided by the amount equal to the aggregate life of all of those obligations. This definition, expressed as a formula in regard to bonds, is as follows:
Average Annual Total Debt Service X Number of Bonds
Debt Service = ________________________________________
Bond Years
Total Debt Service = Insured Unpaid Principal + Interest
Total Insured Principal
Number of Bonds = _______________________________
$1,000
Bond Years = Number of Bonds X Term in Years
(e) "Collateral" means any of the following:
(1) Cash.
(2) The scheduled cash flow from obligations which are not callable, where the underlying obligations cannot be prepaid in whole or in part by the original borrowers, and the principal of which are directly payable or guarantied by the United States government, or in the case of obligations denominated in the currency of a foreign country directly payable or guarantied by the government or central bank of that country, scheduled to be received on or prior to the date of scheduled debt service on the insured obligation.
(3) The market value of investment grade obligations, other than obligations evidencing an interest in the project or projects financed with the proceeds of the insured obligations, in an amount not to exceed the principal of and interest on the insured obligation.
(4) The face amount of each letter of credit that meets all of the following criteria:
(A) Is irrevocable.
(B) Provides for payment under the letter of credit under all instances in which payment under a financial guaranty insurance policy is required.
(C) Is issued, presentable, and payable either:
(i) At an office of the letter of credit issuer in the United States.
(ii) At an office of the letter of credit issuer located in the jurisdiction in which the trustee or paying agent for the insured
obligation is located.
(D) Contains a statement that either:
(i) Identifies the financial guaranty insurance corporation, its collateral agent, or any successor by operation of law, including any liquidator, rehabilitator, receiver or conservator, as the beneficiary.
(ii) Identifies the trustee or the paying agent for the insured obligation as the beneficiary.
(E) Contains a statement to the effect that the obligation of the letter of credit issuer under the letter of credit is an individual obligation of that issuer and is in no way contingent upon reimbursement with respect thereto.
(F) Contains an issue date and an expiration date.
(G) Either:
(i) Has a term at least as long as the shorter of the term of the insured obligation or the term of the financial guaranty insurance policy; or
(ii) Provides that the letter of credit shall not expire without 30 days prior written notice to the beneficiary and allows for drawing under the letter of credit in the event that, prior to expiration, the letter of credit is not renewed or extended or a substitute letter of credit or alternate collateral meeting the requirements of subdivision (e) is not provided.
(H) If the letter of credit is governed by the 1983 revision of the Uniform Customs and Practice for Documentary Credits of the International Chamber of Commerce (Publication 400), or any successor revision approved by the commissioner, it shall contain a provision for an extension of time, of not less than 30 days after resumption of business, to draw against the letter of credit in the event that one or more of the occurrences described in Article 19 of Publication 400 occurs.
(I) Is issued by a bank, trust company, or savings association that meets all of the following criteria:
(i) Is organized and existing under the laws of the United States or any state thereof or, in the case of a banking organization organized under the laws of a foreign country, has a branch or agency office licensed under the laws of the United States or any state thereof and is domiciled in a member country of the Organization of Economic Cooperation and Development having a sovereign rating in one of the top two generic lettered rating classifications by a securities rating agency acceptable to the commissioner.
(ii) Has (or is the principal operating subsidiary of a bank holding company that has) a long-term debt rating of at least investment grade.
(iii) Is not a parent, subsidiary or affiliate of the trustee or paying agent, if any, with respect to the insured obligation if that trustee or paying agent is the named beneficiary of the letter of credit.
Collateral shall be deposited with or held by the financial guaranty insurance corporation, held by a trustee or agent for the benefit of the financial guaranty insurance corporation in trust or to perfect a security interest, or held in trust pursuant to the bond indenture or other trust arrangement by a trustee for the benefit of holders of the insured obligations which may be used for the payment of debt service, other insured payments, collateral agent fees and trustee fees or reimbursement of the financial guaranty insurance corporation on any obligation insured by the corporation. Any such trustee or agent shall be a bank, savings association, depository institution, or other entity acceptable to the commissioner, the deposits of which are insured by the Bank Insurance Fund or the Savings Association Insurance Fund of the Federal Deposit Insurance Corporation (or any successors thereto), or in the case of banking organizations organized under the laws of a foreign country in addition satisfies the requirements of clauses (i) and (ii) of subparagraph (I) of paragraph (4) of subdivision (e) of Section 12100, and, in each case which has a net worth of at least twenty-five million dollars ($25,000,000). Any such trustee or agent may also be an approved or qualified servicer or originator of the kind of assets which comprise the collateral which maintains in force at all times errors and omissions insurance applicable to the trust or agency activities, including without limitation, a servicer qualified under a federal or state insurance or guaranty program to service loans or mortgage loans.
(f) "Commercial real estate" means income-producing real property other than residential property consisting of less than five units.
(g) "Contingency reserve" means an additional liability reserve established to protect policyholders against the effects of adverse economic cycles or other unforeseen circumstances.
(h) "Financial guaranty insurance corporation" means an insurer transacting financial guaranty insurance.
(i) "Governmental unit" means a state, territory, or possession of the United States of America, the District of Columbia, the country of Canada, a province of Canada, the United Kingdom, a public authority of the United Kingdom, a municipality, or a political subdivision of any of the foregoing, or any public agency or instrumentality thereof.
(j) "Guaranties of consumer debt obligations" means insurance policies indemnifying regulated financial institutions against loss or damage resulting from nonpayment of debts owed to them for extensions of credit to individuals for non business purposes provided in the normal course of their business. Policies providing that coverage shall contain a provision that all liability terminates upon sale or transfer of the underlying obligation to any transferee that is not an insured of the financial guaranty insurance corporation under a similar policy.
(k) "Industrial development bond" means any security, or other instrument under which a payment obligation is created, issued by or on behalf of a governmental unit to finance a project serving a private industrial, commercial, or manufacturing purpose and not guarantied by a governmental unit.
(l) "Insurable risk" means that the obligation on an uninsured basis has been determined to be not less than investment grade. With respect to asset-backed securities as defined in subdivision (c), the determination shall be, based solely on the pool of assets pledged in support of the insured obligation or securing the financial guaranty insurance corporation, without consideration of the creditworthiness of the issuer.
(m) "Investment grade" means that the obligation is rated in one of the top four generic lettered rating classifications by a securities rating agency acceptable to the commissioner, that the obligation, without regard to financial guaranty insurance, has been identified in writing by that rating agency as an insurable risk deemed to be of investment grade quality or that the obligation has been determined to be investment grade (as indicated by a category 1 or 2 rating) by the Securities Valuation Office of the National Association of Insurance Commissioners.
(n) "Municipal bonds" means municipal obligation bonds and special revenue bonds.
(o) "Municipal obligation bond" means any security, or other instrument, including a state lease but not a lease of any other governmental unit, under which a payment obligation is created, issued by or on behalf of a governmental unit to finance a project or undertaking serving a substantial public purpose, and which is one or more of the following:
(1) Payable from tax revenues, but not tax allocations, within the jurisdiction of the governmental unit.
(2) Payable or guarantied by the United States of America or any agency, department or instrumentality thereof, or by a state housing agency.
(3) Payable from rates or charges (but not tolls) levied or collected in respect of a nonnuclear utility project, public transportation facility (other than an airport facility) or public higher education facility.
(4) With respect to lease obligations, payable from past, present, or future appropriations.
(p) "Reinsurance" means cessions qualifying for credit under Section 12121.
(q) "Security" or "secured" means any of the following:
(1) A deposit at least equal to the full amount of the outstanding principal of the insured obligation.
(2) Collateral, as defined by subdivision (e), at least equal to the full amount of the outstanding principal of the insured obligation or that has a market value or scheduled cash flow which is equal to or greater than the scheduled debt service on the insured obligation.
(3) Property, provided the financial guaranty insurance corporation or the trustee has possession of evidence of the right, title, or authority to claim or foreclose thereon or otherwise dispose of the property for value, the scheduled cash flow from which, or market value thereof, is at least equal to the scheduled debt service on the insured obligation.
(r) "Special revenue bond" means any security or other instrument under which a payment obligation is created, issued by or on behalf of a governmental unit to finance a project or undertaking serving a substantial public purpose and not payable from the sources enumerated in subdivision (o) or securities which are substantially similar to the foregoing issued by a not-for-profit corporation.
(s) "Total net liability" of a financial guaranty insurance corporation means the aggregate amount of insured unpaid principal, interest, and other monetary payments, if any, of guarantied obligations insured or assumed, less reinsurance and less collateral.
(t) "Utility first mortgage obligation" means an obligation of an issuer secured by a first priority mortgage on property owned or leased by an investor-owned or cooperative-owned utility company.
>
Lines of Insurance that Include Several Classes of Insurance
Annuity
A contract sold by insurance companies that pays a monthly (or quarterly, semiannual, or annual) income benefit for the life of a person (the annuitant), for the lives of two or more persons, or for a specified period of time. The annuitant can never outlive the income from the annuity. While the basic purpose of life insurance is to provide an income for a beneficiary at the death of the insured, the annuity is intended to provide an income for life for the annuitant. There are variations in both the way that payments are made by a buyer during the accumulation period, and in the way payments are made to the annuitant during the liquidation period.
An annuity may be bought by means of installments, with benefits scheduled to begin at a specified age such as 65; or, it may be bought by means of a single lump sum, with benefits scheduled to begin immediately or at a later date. No physical examination is required.
[Note: This line of insurance definition is from the Dictionary of Insurance Terms, Barron's Business Guides]
>
Commercial Automobile
Commercial Automobile insurance includes the following lines of insurance: [Classes: 116. Automobile, 108. Liability]
Commercial Automobile Line of Insurance - 116. Automobile insurance includes:
(a) insurance of automobile owners, users, dealers, or others having insurable interests therein, against hazards incident to ownership, maintenance, operation, and use of automobiles, other than loss resulting from accident or physical injury, fatal or nonfatal, to, or death of, any natural person.
(b) Automobile insurance also includes any contract of warranty, or guaranty that promises service, maintenance, parts replacement, repair, money, or any other indemnity in event of loss of or damage to a motor vehicle or any part thereof from any cause, including loss of or damage to or loss of use of the motor vehicle by reason of depreciation, deterioration, wear and tear, use, obsolescence, or breakage if made by a warrantor or guarantor who or which as such is doing an insurance business.
(c) The making of a contract covering only defects in material and workmanship, which may include towing and substitute transportation, in exchange for a separately stated charge where it is merely incidental to the business of selling or leasing automobiles, shall not be deemed insurance, provided, that the maker of the contract has an insurance policy with an admitted automobile insurer providing coverage for the making of those contracts. The policy shall include a loss payee endorsement that provides coverage to any lending institution as its interest may appear. In addition, the contract shall conspicuously state the name and address of the licensed underwriting insurer and contain a statement that the holder shall be entitled to make a direct claim against that insurer upon the failure of the maker to pay any claim within 60 days after proof of loss has been filed with the maker. The requirements of this section shall not apply where the maker is a manufacturer, distributor, or importer of automobiles.
(d) A contract covering only defects in material and workmanship, which may include towing and substitute transportation, in exchange for a separately stated charge, where the contract is sold by an automobile dealer incidental to the automobile dealer's business of selling or leasing automobiles and the legal obligor is other than the automobile dealer shall not be deemed insurance, provided that the legal obligor of the contract complies with all of the following requirements:
(1) Maintain an insurance policy with an admitted automobile insurer providing coverage for the obligation of those contracts. The policy shall include a loss payee endorsement that provides coverage to any lending institution as its interest may appear. In addition, the contract shall conspicuously state the name and address of the licensed underwriting insurer and contain a statement that the holder shall be entitled to make a direct claim against that insurer upon the failure of the legal obligor to pay any claim within 60 days after proof of loss has been filed with the party designated in the contract.
(2) Possess a fire and casualty broker agent license.
(3) Comply with the requirements of subparagraph (A) or (B), as follows:
(A) Comply with both of the following:
(i) Maintain a funded reserve account for its obligations under its contracts issued and outstanding in this state. The reserves shall not be less than 40 percent of gross consideration received, less claims paid, on the sale of the contract for all in-force contracts. The reserve account shall be subject to examination and review by the commissioner.
(ii) Place in trust with the commissioner a financial security deposit having a value of not less than 5 percent of the gross consideration received, less claims paid, on the sale of the contract for all contracts issued and in force, but not less than twenty-five thousand dollars ($25,000) consisting of one of the following:
(I) A surety bond issued by an authorized surety.
(II) Securities of the type eligible for deposit by admitted insurers.
(III) Cash.
(IV) A letter of credit issued by a qualified financial institution.
(V) Another form of security prescribed by regulations issued by the commissioner.
(B) (i) Maintain a net worth of one hundred million dollars ($100,000,000).
(ii) An obligor that complies with this subparagraph shall, upon request, provide the commissioner with a copy of the obligor's financial statements or the obligor's parent company's financial statements. The financial statement shall be the most recent Form 10-K filed with the Securities and Exchange Commission within the last calendar year, or if the obligor does not file with the Securities and Exchange Commission, a copy of the obligor's audited financial statements, that shows a net worth of the obligor or its parent company of at least one hundred million dollars ($100,000,000). If the obligor's parent company's Form 10-K or audited financial statements are filed to meet the obligor's financial stability requirement, then the parent company shall agree to guarantee the obligations of the obligor relating to contracts of the obligor in this state.
(e) The doing or proposing to do any business in substance equivalent to the business described in this section in a manner designed to evade the provisions of this section is the doing of an insurance business.
Commercial Automobile Line of Insurance - 108. Liability insurance includes:
(a) Insurance against loss resulting from liability for injury, fatal or nonfatal, suffered by any natural person, or resulting from liability for damage to property, or property interests of others but does not include worker's compensation, common carrier liability, boiler and machinery, or team and vehicle insurance.
(b) (1) With respect to operations or property covered by a policy of liability insurance as defined in subdivision (a), insurance of medical, hospital, surgical and funeral loss or expense of the insured or other persons injured, and in the case of an automobile liability policy disability benefits to the insured or other persons injured and in the event of their death, funeral and accidental death benefits to their dependents, beneficiaries or personal representatives irrespective of legal liability of the insured, when issued with or supplemental to the insurance defined in subdivision (a);
(2) When issued with or supplemental to the insurance defined in subdivision (a), disability insurance covering the insured and members of his household, or other persons who customarily operate any automobile covered by such a policy and who are named in such policy; and such disability insurance may cover against accidental injury, death or dismemberment caused by any or all hazards as defined in such coverage;
(c) Insurance covering injuries sustained by an insured resulting from a tort committed by a third party against which such third party is not himself covered by liability insurance;
(d) Insurance coverage against the legal liability of the insured, and against loss, damage, or expense incident to a claim arising out of the death or injury of any person as the result of negligence or malpractice in rendering professional services by any person who holds a certificate or license issued pursuant to Chapter 5 (commencing with Section 2000) of Division 2 of the Business and Professions Code, a license issued pursuant to the Osteopathic Initiative Act, or license as a community clinic defined in subdivision (a) of Section 1203 of the Health and Safety Code, or a license as a health facility pursuant to Chapter 2 (commencing with Section 1250) of Division 2 of the Health and Safety Code.
(e) The provisions of this code relating to disability insurance do not apply to insurance defined in this section.
Insurers admitted to transact liability insurance are also deemed to be admitted to transact workers' compensation insurance for the purpose of covering those persons defined as employees of subdivision (d) of Section 3351 of the Labor Code.
Commercial
Commercial lines insurance coverage for businesses, commercial institutions, and professional organizations, as contrasted with personal insurance. [102. Fire, 103. Marine Insurance, 107. Plate Glass, 108. Product Liability, 111. Boiler and Machinery Insurance, 112. Burglary, 114. Sprinkler, 120. Miscellaneous.]
Commercial Line of Insurance - 102. Fire insurance includes:
(a) Insurance against loss by fire, lightning, windstorm, tornado, or earthquake.
(b) Insurance against loss of, or destruction of, or damage to,any of the following property, when such insurance includes loss thereof by fire and excludes coverage of property while in the custody of, or possession of, or being transported by, any carrier for hire or in the mail:
1. Accounts, books, maps, manuscripts, indexes and other valuable papers, documents and records incidental to the business or profession or activity in which the insured is engaged, resulting from any cause, but excluding any article constituting stock in trade or used as a sample or sold or held for sale.
2. Moneys, stamps, coins, bullion, securities, notes, drafts, acceptances or instruments of like kind or character, resulting from any cause, except:
(i) Forgery.
(ii) Any dishonest, fraudulent or criminal act of any officer, employee, partner, director, trustee or authorized representative of the insured.
(c) Insurance by means of an all-risk policy of the type commonly known as the "Personal Property Floater" against any and all kinds of loss of or damage to, or loss of use of, any personal property other than merchandise.
The provisions of Section 2070 shall not apply to insurance written pursuant to subdivisions (b) or (c).
Commercial Line of Insurance - 103. Marine Insurance includes:
Marine insurance includes insurance against any and all kinds of loss of or damage to:
(a) Vessels, craft, aircraft, cars, automobiles and vehicles of every kind (excluding aircraft and automobiles operating under their own power or while in storage not incidental to transportation), as well as all goods, freights, cargoes, merchandise, effects, disbursements, profits, money, bullion, securities, choses in action, evidences of debt, valuable papers, bottomry and respondentia interests and all other kinds of property, and interests therein, in respect to, appertaining to or in connection with any and all risks or perils of navigation, transit, or transportation, including war risks, on or under any seas or other waters, on land or in the air, or while being assembled, packed, crated, baled, compressed or similarly prepared for shipment or while awaiting the same, or during any delays, storage, transshipment, or reshipment incident thereto including marine builder's risks, and all personal property floater risks.
(b) Person or to property in connection with or appertaining to a marine, inland marine, transit or transportation insurance including liability for loss of or damage arising out of or in connection with the construction, repair, maintenance or use of the subject matter of such insurance (but not including life insurance or surety bonds); but except as herein specified, shall not mean insurances against loss by reason of bodily injury to the person. Inland marine insurance shall be deemed to include hull insurance on water pleasure craft not used for commercial purposes of a size and type to be determined by the commissioner.
(c) Precious stones, jewels, jewelry, gold, silver and other precious metals, whether used in business or trade or otherwise and whether the same be in course of transportation or otherwise.
Commercial Line of Insurance - 107. Plate Glass Insurance includes:
Plate glass insurance includes insurance against breakage of glass.
Commercial Line of Insurance - 108. Product Liability Insurance includes:
(a) Insurance against loss resulting from liability for injury, fatal or nonfatal, suffered by any natural person, or resulting from liability for damage to property, or property interests of others but does not include worker's compensation, common carrier liability, boiler and machinery, or team and vehicle insurance.
(b) (1) With respect to operations or property covered by a policy of liability insurance as defined in subdivision (a), insurance of medical, hospital, surgical and funeral loss or expense of the insured or other persons injured, and in the case of an automobile liability policy disability benefits to the insured or other persons injured and in the event of their death, funeral and accidental death benefits to their dependents, beneficiaries or personal representatives irrespective of legal liability of the insured, when issued with or supplemental to the insurance defined in subdivision (a);
(2) When issued with or supplemental to the insurance defined in subdivision (a), disability insurance covering the insured and members of his household, or other persons who customarily operate any automobile covered by such a policy and who are named in such policy; and such disability insurance may cover against accidental injury, death or dismemberment caused by any or all hazards as defined in such coverage;
(c) Insurance covering injuries sustained by an insured resulting from a tort committed by a third party against which such third party is not himself covered by liability insurance;
(d) Insurance coverage against the legal liability of the insured, and against loss, damage, or expense incident to a claim arising out of the death or injury of any person as the result of negligence or malpractice in rendering professional services by any person who holds a certificate or license issued pursuant to Chapter 5 (commencing with Section 2000) of Division 2 of the Business and Professions Code, a license issued pursuant to the Osteopathic Initiative Act, or license as a community clinic defined in subdivision (a) of Section 1203 of the Health and Safety Code, or a license as a health facility pursuant to Chapter 2 (commencing with Section 1250) of Division 2 of the Health and Safety Code.
(e) The provisions of this code relating to disability insurance do not apply to insurance defined in this section.
Insurers admitted to transact liability insurance are also deemed to be admitted to transact workers' compensation insurance for the purpose of covering those persons defined as employees of subdivision (d) of Section 3351 of the Labor Code.108.
Commercial Line of Insurance - 111. Boiler and Machinery Insurance includes:
Boiler and machinery insurance includes insurance against loss of property and liability for damage to persons or property from explosion of, or accident to, boilers, tanks, pipes, pressure vessels, engines, wheels, electrical machinery, or apparatus connected therewith or operating thereby.
Commercial Line of Insurance - 112. Burglary Insurance includes:
(a) Insurance against loss by burglary or theft or both.
(b) Insurance against loss of, or destruction of, or damage to, any of the following property, resulting from any cause, when such insurance includes loss thereof by burglary or theft, or both, and excludes coverage of property while in the custody of, or possession of, or being transported by, any carrier for hire or in the mail: Moneys, stamps, coins, bullion, securities, notes, drafts, acceptances or instruments of like kind or character, accounts, books, maps, manuscripts, indexes and other valuable papers, documents and records incidental to the business or profession or activity in which the insured is engaged.
(c) Insurance by means of an all-risk policy of the type commonly known as the "Personal Property Floater" against any and all kinds of loss of or damage to, or loss of use of, any personal property other than merchandise.
Commercial Line of Insurance - 114. Sprinkler Insurance includes:
Sprinkler insurance includes insurance against loss through damage by water to goods or premises arising from the breakage or leakage of sprinklers, pumps, or other apparatus placed for extinguishing fires, or loss arising from the breakage or leakage of water pipes, or through accidental injury to such sprinklers, pumps, or other apparatus.
Commercial Line of Insurance - 120. Miscellaneous insurance includes:
Miscellaneous insurance includes insurance against loss from damage done, directly or indirectly by lightning, windstorm, tornado, earthquake or insurance under an open policy indemnifying the producer of any motion picture, television, theatrical, sport, or similar production, event, or exhibition against loss by reason of the interruption, postponement, or cancellation of such production, event, or exhibition due to death, accidental injury, or sickness preventing performers, directors, or other principals from commencing or continuing their respective performance or duties; and any insurance not included in any of the foregoing classes, and which is a proper subject of insurance.
>
Earthquake
Earthquake Insurance coverage that can be purchased as an endorsement to many property policies such as the Standard Fire Policy or as a separate policy. Coverage is for direct damage resulting from earthquake or volcanic eruption. If there is a lapse of at least 72 hours between earthquake shocks, then each loss by a given earthquake is subject to a new claim. Excluded are losses resulting from fire, explosion, flood, or tidal wave. [Class: 102. Fire and/or 120. Miscellaneous]
Earthquake Line of Insurance - 102. Fire insurance includes:
(a) Insurance against loss by fire, lightning, windstorm, tornado, or earthquake.
(b) Insurance against loss of, or destruction of, or damage to,any of the following property, when such insurance includes loss thereof by fire and excludes coverage of property while in the custody of, or possession of, or being transported by, any carrier for hire or in the mail:
1. Accounts, books, maps, manuscripts, indexes and other valuable papers, documents and records incidental to the business or profession or activity in which the insured is engaged, resulting from any cause, but excluding any article constituting stock in trade or used as a sample or sold or held for sale.
2. Moneys, stamps, coins, bullion, securities, notes, drafts, acceptances or instruments of like kind or character, resulting from any cause, except:
(i) Forgery.
(ii) Any dishonest, fraudulent or criminal act of any officer, employee, partner, director, trustee or authorized representative of the insured.
(c) Insurance by means of an all-risk policy of the type commonly known as the "Personal Property Floater" against any and all kinds of loss of or damage to, or loss of use of, any personal property other than merchandise.
The provisions of Section 2070 shall not apply to insurance written pursuant to subdivisions (b) or (c).
Earthquake Line of Insurance - 120. Miscellaneous insurance includes:
Miscellaneous insurance includes insurance against loss from damage done, directly or indirectly by lightning, windstorm, tornado, earthquake or insurance under an open policy indemnifying the producer of any motion picture, television, theatrical, sport, or similar production, event, or exhibition against loss by reason of the interruption, postponement, or cancellation of such production, event, or exhibition due to death, accidental injury, or sickness preventing performers, directors, or other principals from commencing or continuing their respective performance or duties; and any insurance not included in any of the foregoing classes, and which is a proper subject of insurance.
>
Flood
Coverage made available to residents of a community on a subsidized and nonsubsidized premium rate basis once the governing body of the community qualifies that community for coverage under the National Flood Insurance Act. Residents include business and nonbusiness operations with coverage written on structures and their contents. Coverage is purchased through licensed agents. Prior to passage of the Housing and Urban Development Act of 1968, of which the National Flood Insurance Act is a part, it was virtually impossible to obtain flood insurance coverage on an industrial building, residential building, retailing building, or a single family dwelling. [Class: 120. Miscellaneous]
Flood Line of Insurance - 120. Miscellaneous insurance includes:
Miscellaneous insurance includes insurance against loss from damage done, directly or indirectly by lightning, windstorm, tornado, earthquake or insurance under an open policy indemnifying the producer of any motion picture, television, theatrical, sport, or similar production, event, or exhibition against loss by reason of the interruption, postponement, or cancellation of such production, event, or exhibition due to death, accidental injury, or sickness preventing performers, directors, or other principals from commencing or continuing their respective performance or duties; and any insurance not included in any of the foregoing classes, and which is a proper subject of insurance.
>
Health
Health Insurance has three basic plans that are available to cover the costs of health care: Commercial Health Insurance, Private Noncommercial (Blue Cross/Blue Shield), and Social Insurance (Social Security). [Class: 106. Disability]
Health Line of Insurance - 106. Disability includes:
Disability insurance includes insurance appertaining to injury, disablement or death resulting to the insured from accidents, and appertaining to disablements resulting to the insured from sickness.
>
Homeowners insurance
A regular homeowners policy covers both dwelling and contents for various perils, including fire and theft. Also included are coverages for glass breakage and liability. A homeowner policy may also include coverage for personal articles and earthquake. There are also similar policies available for tenants and condominium/cooperative unit owners. [Classes: 102. Fire; 112. Burglary; 107. Plate Glass; 108. Liability; 120. Miscellaneous]
Homeowners Line of Insurance - 102. Fire insurance includes:
(a) Insurance against loss by fire, lightning, windstorm, tornado, or earthquake.
(b) Insurance against loss of, or destruction of, or damage to,any of the following property, when such insurance includes loss thereof by fire and excludes coverage of property while in the custody of, or possession of, or being transported by, any carrier for hire or in the mail:
1. Accounts, books, maps, manuscripts, indexes and other valuable papers, documents and records incidental to the business or profession or activity in which the insured is engaged, resulting from any cause, but excluding any article constituting stock in trade or used as a sample or sold or held for sale.
2. Moneys, stamps, coins, bullion, securities, notes, drafts, acceptances or instruments of like kind or character, resulting from any cause, except:
(i) Forgery.
(ii) Any dishonest, fraudulent or criminal act of any officer, employee, partner, director, trustee or authorized representative of the insured.
(c) Insurance by means of an all-risk policy of the type commonly known as the "Personal Property Floater" against any and all kinds of loss of or damage to, or loss of use of, any personal property other than merchandise.
The provisions of Section 2070 shall not apply to insurance written pursuant to subdivisions (b) or (c).
Homeowners Line of Insurance - 112. Burglary insurance includes:
(a) Insurance against loss by burglary or theft or both.
(b) Insurance against loss of, or destruction of, or damage to, any of the following property, resulting from any cause, when such insurance includes loss thereof by burglary or theft, or both, and excludes coverage of property while in the custody of, or possession of, or being transported by, any carrier for hire or in the mail: Moneys, stamps, coins, bullion, securities, notes, drafts, acceptances or instruments of like kind or character, accounts, books, maps, manuscripts, indexes and other valuable papers, documents and records incidental to the business or profession or activity in which the insured is engaged.
(c) Insurance by means of an all-risk policy of the type commonly known as the "Personal Property Floater" against any and all kinds of loss of or damage to, or loss of use of, any personal property other than merchandise.
Homeowners Line of Insurance - 107. Plate glass insurance includes:
Plate glass insurance includes insurance against breakage of glass.
Homeowners Line of Insurance - 108. Liability insurance includes:
(a) Insurance against loss resulting from liability for injury, fatal or nonfatal, suffered by any natural person, or resulting from liability for damage to property, or property interests of others but does not include worker's compensation, common carrier liability, boiler and machinery, or team and vehicle insurance.
(b) (1) With respect to operations or property covered by a policy of liability insurance as defined in subdivision (a), insurance of medical, hospital, surgical and funeral loss or expense of the insured or other persons injured, and in the case of an automobile liability policy disability benefits to the insured or other persons injured and in the event of their death, funeral and accidental death benefits to their dependents, beneficiaries or personal representatives irrespective of legal liability of the insured, when issued with or supplemental to the insurance defined in subdivision (a);
(2) When issued with or supplemental to the insurance defined in subdivision (a), disability insurance covering the insured and members of his household, or other persons who customarily operate any automobile covered by such a policy and who are named in such policy; and such disability insurance may cover against accidental injury, death or dismemberment caused by any or all hazards as defined in such coverage;
(c) Insurance covering injuries sustained by an insured resulting from a tort committed by a third party against which such third party is not himself covered by liability insurance;
(d) Insurance coverage against the legal liability of the insured, and against loss, damage, or expense incident to a claim arising out of the death or injury of any person as the result of negligence or malpractice in rendering professional services by any person who holds a certificate or license issued pursuant to Chapter 5 (commencing with Section 2000) of Division 2 of the Business and Professions Code, a license issued pursuant to the Osteopathic Initiative Act, or license as a community clinic defined in subdivision (a) of Section 1203 of the Health and Safety Code, or a license as a health facility pursuant to Chapter 2 (commencing with Section 1250) of Division 2 of the Health and Safety Code.
(e) The provisions of this code relating to disability insurance do not apply to insurance defined in this section.
Insurers admitted to transact liability insurance are also deemed to be admitted to transact workers' compensation insurance for the purpose of covering those persons defined as employees of subdivision (d) of Section 3351 of the Labor Code.
Homeowners Line of Insurance - 120. Miscellaneous insurance includes:
Miscellaneous insurance includes insurance against loss from damage done, directly or indirectly by lightning, windstorm, tornado, earthquake or insurance under an open policy indemnifying the producer of any motion picture, television, theatrical, sport, or similar production, event, or exhibition against loss by reason of the interruption, postponement, or cancellation of such production, event, or exhibition due to death, accidental injury, or sickness preventing performers, directors, or other principals from commencing or continuing their respective performance or duties; and any insurance not included in any of the foregoing classes, and which is a proper subject of insurance.
>
Medical Malpractice
Medical Malpractice Line of Insurance - 108. Liability insurance includes:
(a) Insurance against loss resulting from liability for injury, fatal or nonfatal, suffered by any natural person, or resulting from liability for damage to property, or property interests of others but does not include worker's compensation, common carrier liability, boiler and machinery, or team and vehicle insurance.
(b) (1) With respect to operations or property covered by a policy of liability insurance as defined in subdivision (a), insurance of medical, hospital, surgical and funeral loss or expense of the insured or other persons injured, and in the case of an automobile liability policy disability benefits to the insured or other persons injured and in the event of their death, funeral and accidental death benefits to their dependents, beneficiaries or personal representatives irrespective of legal liability of the insured, when issued with or supplemental to the insurance defined in subdivision (a);
(2) When issued with or supplemental to the insurance defined in subdivision (a), disability insurance covering the insured and members of his household, or other persons who customarily operate any automobile covered by such a policy and who are named in such policy; and such disability insurance may cover against accidental injury, death or dismemberment caused by any or all hazards as defined in such coverage;
(c) Insurance covering injuries sustained by an insured resulting from a tort committed by a third party against which such third party is not himself covered by liability insurance;
(d) Insurance coverage against the legal liability of the insured, and against loss, damage, or expense incident to a claim arising out of the death or injury of any person as the result of negligence or malpractice in rendering professional services by any person who holds a certificate or license issued pursuant to Chapter 5 (commencing with Section 2000) of Division 2 of the Business and Professions Code, a license issued pursuant to the Osteopathic Initiative Act, or license as a community clinic defined in subdivision (a) of Section 1203 of the Health and Safety Code, or a license as a health facility pursuant to Chapter 2 (commencing with Section 1250) of Division 2 of the Health and Safety Code.
(e) The provisions of this code relating to disability insurance do not apply to insurance defined in this section.
Insurers admitted to transact liability insurance are also deemed to be admitted to transact workers' compensation insurance for the purpose of covering those persons defined as employees of subdivision (d) of Section 3351 of the Labor Code.
>
Product Liability
Coverage usually provided under the COMMERCIAL GENERAL LIABILITY INSURANCE (CGL); it can also be purchased separately. [Class: 108. Liability]
Product Liability Line of Insurance - 108. Liability insurance includes:
(a) Insurance against loss resulting from liability for injury, fatal or nonfatal, suffered by any natural person, or resulting from liability for damage to property, or property interests of others but does not include worker's compensation, common carrier liability, boiler and machinery, or team and vehicle insurance.
(b) (1) With respect to operations or property covered by a policy of liability insurance as defined in subdivision (a), insurance of medical, hospital, surgical and funeral loss or expense of the insured or other persons injured, and in the case of an automobile liability policy disability benefits to the insured or other persons injured and in the event of their death, funeral and accidental death benefits to their dependents, beneficiaries or personal representatives irrespective of legal liability of the insured, when issued with or supplemental to the insurance defined in subdivision (a);
(2) When issued with or supplemental to the insurance defined in subdivision (a), disability insurance covering the insured and members of his household, or other persons who customarily operate any automobile covered by such a policy and who are named in such policy; and such disability insurance may cover against accidental injury, death or dismemberment caused by any or all hazards as defined in such coverage;
(c) Insurance covering injuries sustained by an insured resulting from a tort committed by a third party against which such third party is not himself covered by liability insurance;
(d) Insurance coverage against the legal liability of the insured, and against loss, damage, or expense incident to a claim arising out of the death or injury of any person as the result of negligence or malpractice in rendering professional services by any person who holds a certificate or license issued pursuant to Chapter 5 (commencing with Section 2000) of Division 2 of the Business and Professions Code, a license issued pursuant to the Osteopathic Initiative Act, or license as a community clinic defined in subdivision (a) of Section 1203 of the Health and Safety Code, or a license as a health facility pursuant to Chapter 2 (commencing with Section 1250) of Division 2 of the Health and Safety Code.
(e) The provisions of this code relating to disability insurance do not apply to insurance defined in this section.
Insurers admitted to transact liability insurance are also deemed to be admitted to transact workers' compensation insurance for the purpose of covering those persons defined as employees of subdivision (d) of Section 3351 of the Labor Code.108.
[Note: Lines of insurance with several classes of insurance definitions are from the Dictionary of Insurance Terms, Barron's Business Guides]
