California Insurance Code 1610-1620
1610. Any of the acts described in Section 1611, when effected in this State, by mail or otherwise, by a foreign or alien insurer which is nonadmitted at the time of the solicitation, issuance or delivery by it of contracts of insurance to residents of, or to corporations authorized to do business in, this State, is equivalent to and shall constitute an appointment by such insurer of the commissioner and his successor or successors in office to be its true and lawful attorney, upon whom may be served all lawful process in any action, suit, or proceeding instituted by or on behalf of an insured or beneficiary arising out of any such contracts of insurance, and any such act shall be signification of its agreement that such service of process is of the same legal force and validity as personal service of process in this State upon such insurer. 1611. The acts referred to in Section 1610 are: (1) The issuance or delivery to residents of, or to corporations authorized to do business in, this State of contracts of insurance insuring (a) the lives or persons of residents of this State physically present herein at the time of such issuance or delivery or (b) property or operations located in this State. (2) The solicitation of applications for such contracts. (3) The collection of premiums, membership fees, assessments or other considerations for such contracts. (4) Any other transaction of business arising out of such contracts. 1612. Such service of process may be made as provided in Article 1 (commencing with Section 12919) of Chapter 2 of Division 3. 1616. Before any nonadmitted foreign or alien insurer shall file or cause to be filed any pleading in any action, suit or proceeding instituted against it, the insurer shall either (1) procure a certificate of authority to transact insurance in this state; or (2) give a bond in the action, suit or proceeding in an amount to be fixed by the court sufficient to secure the payment of any final judgment which may be rendered in the action, suit, or proceeding. 1617. The court in any action, suit, or proceeding, in which service of process is effected in the manner provided in Section 1612 may, in its discretion, order such postponement as may be necessary to afford the defendant reasonable opportunity to comply with the provisions of Section 1616 and to defend such action. 1618. Nothing in Section 1616 is to be construed to prevent a nonadmitted foreign or alien insurer from filing a motion to quash a writ or to set aside service thereof made in the manner provided in Section 1612 on the ground that such insurer has not done any of the acts described in Section 1611. 1619. In any action against a nonadmitted foreign or alien insurer upon a contract of insurance issued or delivered in this State to a resident thereof or to a corporation authorized to do business therein, if the insurer has failed for 30 days after demand prior to the commencement of the action to make payment in accordance with the terms of the contract, and it appears to the court that such refusal was vexatious and without reasonable cause, the court may allow to the plaintiff a reasonable attorney fee and include such fee in any judgment that may be rendered in such action. Such fee shall not exceed 12 1/2 percent of the amount which the court or jury finds the plaintiff is entitled to recover against the insurer, but in no event shall such fee be less than twenty-five dollars ($25). Failure of an insurer to defend any such action shall be deemed prima facie evidence that its failure to make payment was vexatious and without reasonable cause. 1620. (a) The provisions of the preceding sections of this article shall not apply to any action, suit or proceeding against any unauthorized foreign or alien insurer arising out of any contract of insurance effected in accordance with Section 1760, 1760.5, 1763, or 1763.1, or, if the contract is governed by and complies with the laws of the state in which the contract was entered. The provisions of Section 1610 shall apply to any action, suit, or proceeding under this section unless the insurer has designated an agent in California for service of process or the contract contains a provision designating a resident of this state or any firm of which one member is a resident of this state to be its true and lawful attorney upon whom may be served all lawful process in any such action, suit or proceeding. (b) In any such action, suit or proceeding arising out of any such contract of insurance, the court may require the insurer to file a bond, in an amount sufficient to secure the payment of any final judgment which may be rendered unless one or more of the following is applicable: (1) The insurer makes a showing satisfactory to the court that it maintains in a state of the United States funds or securities in trust or otherwise, sufficient and available to satisfy any such final judgment and that it will pay the judgment without requiring suit to be brought thereon in the state where the securities or funds are located. (2) At the time the insurer files any pleading in any action, suit, or proceeding instituted against it, the insurer is listed as an eligible surplus line insurer in accordance with subdivision (f) of Section 1765.1, unless by facts presented to the court there is created a reasonable doubt as to the present ability of the insurer to satisfy any final judgment in the action, suit, or proceeding. Upon request of a party or the court, the unauthorized foreign or alien insurer or reinsurer shall provide the court and the party requesting the bond with copies of documents relating to the financial condition of the insurer, including, but not limited to, copies of the insurer's most recent annual statement and audited financial report and, where applicable, a certified copy of the trust agreement required by subdivision (b) of Section 1765.1 and a verified copy of the most recent quarterly statement or list of assets in the trust. (3) With respect to a contract of reinsurance issued in accordance with Section 1760.5, the reinsurer has complied with the provisions of this code necessary to permit the ceding insurer to take credit on its financial statement for the reinsurance as set forth in Section 922.4 or 922.5.
