§ 597. The Commissioner, whenever necessary, or whenever he is requested by verified petition, signed by three persons interested, either as stockholders, policy-holders, or creditors of any person engaged in insurance business, showing that such person is insolvent under the laws of this State, must make examination of the business and affairs relating to the insurance business of such person; and for such purpose has free access to all the books and papers of such person, and must thoroughly inspect and examine all his affairs, and ascertain his condition and ability to fulfill his engagements, and whether he has complied with all the provisions of law applicable to his insurance transactions. Such person and his officers and agents must open his books and papers for the inspection of the Commissioner, and otherwise facilitate such examination; and the Commissioner may administer oaths and examine under oath any person relative to the business of such person; and if he finds the books to have been carelessly or improperly kept or posted, he must employ sworn experts to rewrite, post, and balance the same at the expense of such person. Such examination must be conducted in the county where such person has his principal place of business, and must be private, unless the Commissioner deems it necessary to publish the result of such investigation, in which case he may publish the same in two of the public newspapers of this State, one of which must be published in the City of San Francisco.

§ 598. The Commissioner may collect the sum of five hundred dollars from any person engaged in the business of insurance for each refusal to give full and truthful information and response in writing to any inquiry in writing by the Commissioner relating to the business of insurance as carried on by him; and for that purpose suits may be instituted by the Commissioner, in the name of the people of the State of California, in any court of competent jurisdiction.

§ 599. The Commissioner may issue subpoenas for witnesses to attend and testify before him on any subject touching insurance business, or in aid of his duties, which must be served, obeyed, and enforced as provided in the Code of Civil Procedure for civil cases, the Commissioner to issue attachments and impose the penalty for disobedience; and, in addition, the

defaulting witness may be punished as provided in the Penal Code.

§ 600.

Whenever the Commissioner ascertains that any person engaged in the insurance business is insolvent within the meaning of this chapter, he must revoke the certificate granted, and send by mail to such person, addressed to him at his principal place of business, or deliver to him personally, notice of such revocation, and cause notice thereof to be filed in his office, and also to be published daily for four weeks in some newspaper published in the City of San Francisco. He must require such person after receiving notice of the revocation, or after the first publication thereof, to discontinue the issuing of any new policies and the renewal of any previously issued; and in such cases must require the person or the manager or agent of the business to repair the capital thereof within such period as he may designate in such requisition by assessment upon the stockholders for such amounts as will make the capital equal to the amount of the paid-up capital, exclusive of assets needed to pay all ascertained liabilities for losses reported, for expenses and taxes, and exclusive of the entire premiums received for outstanding risks.

101 Cal. 144.

§ 601. In case any person, upon the requisition of the Commissioner, fails to make up the deficiency of the capital in accordance with the requirements of this chapter, or to comply in all respects with the laws of this State, the Commissioner must communicate the fact to the Attorney-General, who must, within twenty days after receiving such communication, commence an action in the name of the people of this State, in the Superior Court of the county where the person in question is located or has his principal office, against such person, and apply for an order requiring cause to be shown why the business should not be closed; and the court must thereupon hear the allegations and proofs of the respective parties as in other cases. If it appears to the satisfaction of the court that such person is insolvent, or that the interests of the public so require, the court must decree a dissolution of such corporation, and a winding up of its affairs and a distribution of the effects of such person; but otherwise, the court must enter a decree

annulling the act of the Commissioner in the premises, and authorizing such person to resume business. But the Commissioner must not be held liable for damages, if he has acted in good faith. In the event of any additional losses occurring upon new risks taken after the expiration of the period limited by the Commissioner in the requisition, and before the deficiency has been filled up, the directors of any company, corporation, or association are individually liable to the extent thereof. [Amendment approved April 3, 1880; took effect immediately.] 101 Cal. 138.

§ 602. What constitutes insolvency. Whenever provisions for the liabilities of any person engaged in the business of fire, marine, or inland navigation insurance in this State, for losses reported, expenses, taxes, and reinsurance of all outstanding risks, estimated at fifty per cent of the premiums received and receivable on all fire risks and marine time risks, at the full premiums received and receivable on all other marine risks, would so far impair his capital stock paid in as to reduce the same below two hundred thousand dollars, or below seventy-five per cent of said capital stock paid in, such person is insolvent; and in case of a person engaged in such insurance in this State, on the mutual plan, if the available cash assets of such person shall not exceed his liabilities, as hereinbefore enumerated, in the full sum of two hundred thousand dollars, such person is insolvent; and wherever provision for the liabilities of any person engaged in the business of insuring any one against loss or damage resulting from accident to or injury suffered by an employé or other person for which the person insured may be liable, for losses reported, expenses, taxes, and reinsurance of all outstanding risks estimated as provided in section six hundred and twelve a of the Political Code would so far impair his capital stock paid in as to reduce the same below one hundred thousand dollars, or below seventy-five per cent of said capital stock paid in, such person is insolvent; and whenever provision for the liabilities of any person engaged in any kind of insurance business in this State, other than life, liability and insurance of titles to real estate, provided for in section four hundred and twenty of the Civil Code of this State, for losses reported, expenses, taxes, and reinsurance of all outstanding risks, estimated at

such rates as are accepted by the insurance authorities of the State of New York, would so far impair his capital stock paid in as to reduce the same below one hundred thousand dollars, or below seventy-five per cent of said capital stock paid in, such person is insolvent; and in case of a person engaged in such insurance business in this State, on the mutual plan, if his available cash assets shall not exceed his liabilities, as hereinbefore enumerated, in the full sum of one hundred thousand dollars, such person is insolvent. In the case of a company

or a corporation engaged in the business of life insurance, whenever its liabilities for losses reported, expenses, taxes, and reinsurance of all its outstanding risks, at rates based upon the American Experience Table of Mortality, and interest at the rate of three and one half per centum per annum, exceeds its assets, such company or corporation is insolvent. In the case of a corporation or company engaged in the business of insurance of the title to real estate, whenever provision for its liability for losses reported, expenses, and taxes, would, after exhausting its surplus fund, so far impair its capital stock paid in as to reduce the same below one hundred thousand dollars, or below seventy-five per cent of said capital stock paid in, such corporation or company is insolvent. [Amendment approved March 20, 1905; in effect in sixty days.]

101 Cal. 144.

§ 603. The Commissioner must keep and preserve in a permanent form a full record of his proceedings, including a concise statement of the condition of each person visited or examined by him.

§ 604. The Commissioner may employ an actuary to make the valuation of life policies at the compensation of not exceeding three cents for each thousand dollars of insurance, to be paid by the person or corporation for which the valuation is made.

§ 605. The Commissioner must require in advance, in United States gold coin, the following fees: (1) For filing the articles of incorporation or certified copy of articles or other certificate required to be filed in his office, thirty dollars; (2) For

filing the annual statement required to be filed, twenty dollars; (3) For filing any other papers required by this chapter to be filed, five dollars; (4) For furnishing copies of papers filed in his office, twenty cents per folio; (5) For certifying copies, one dollar each; (6) For each certificate issued, as provided in section six hundred and nineteen, the sum of five dollars.

§ 606. If the salary of the Commissioner and the expenses of his office exceed the fees and charges collected by him, such excess must be annually assessed by the Commissioner upon all persons or incorporations engaged in the business of insurance in this State, and they are severally liable therefor, pro rata, according to the amount of premiums received or receivable from risks taken in this State, respectively, during the year ending on the thirty-first day of December next preceding the assessment. The Commissioner must collect all fees and assessments, and pay monthly into the State Treasury whatever amounts may be received and collected by him. He may bring actions in the name of the people of this State to enforce such collection; and any person liable for any assessment who neglects or refuses to pay the amount of such assessment within ten days after demand thereof in writing by the Insurance Commissioner, becomes liable to pay double the amount of such assessment, and any judgment recovered in such case must be for such double amount and costs.

117 Cal. 242.

§ 607. The Commissioner must cause every corporation or person, before engaging in the business of insurance, to file in his office as follows:

1. If incorporated under the laws of this State, a copy of the articles of incorporation or statement of any increase or diminution of the capital stock, certified by the Secretary of State to be a copy of that which is filed in his office;

2. If incorporated under the laws of any other State or country, a copy of the articles of incorporation, if organized or formed under any law requiring articles to be filed, duly certified by the officer having the custody of such articles; or if not so organized, a copy of the law, charter, or deed of settlement under which the deed of organization is made, duly certified by the proper custodian thereof, or proved by affidavit