(a) In order to qualify as a segregated trust under subdivision (d) of Section 12640.09, a trust shall meet all of the following requirements:

(1) Be established by an insurer or reinsurer for the benefit of the ceding mortgage guaranty insurer.

Terms Used In California Insurance Code 12640.091

  • Amendment: A proposal to alter the text of a pending bill or other measure by striking out some of it, by inserting new language, or both. Before an amendment becomes part of the measure, thelegislature must agree to it.
  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Commissioner: means the Insurance Commissioner of this State. See California Insurance Code 20
  • Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
  • Mortgage: includes a trust deed, "mortgagor" includes a trustor under such trust deed, "mortgagee" includes a beneficiary under such trust deed, or a trustee exercising powers or performing duties granted to or imposed upon him thereunder, and "lien" in respect to real or personal property includes a charge or incumbrance arising out of a trust deed. See California Insurance Code 29
  • Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
  • Service of process: The service of writs or summonses to the appropriate party.
  • State: means the State of California, unless applied to the different parts of the United States. See California Insurance Code 28
  • Trust account: A general term that covers all types of accounts in a trust department, such as estates, guardianships, and agencies. Source: OCC

(2) Have the trust assets located in the mortgage guaranty insurer’s state of domicile, in the State of California, or in another jurisdiction which is approved by the commissioner.

(3) Be funded by assets permitted by Article 3 (commencing with Section 1170) of Chapter 2 of Part 2 of Division 1, or by tax and loss bonds purchased pursuant to Section 832(e) of the Internal Revenue Code.

(4) Be subject to withdrawals only by, and under the control of, the ceding mortgage guaranty insurer provided that written notification with adequate supporting documentation is filed with the commissioner within 15 calendar days after the withdrawal.

(5) Consent to and be subject to examination by the commissioner.

(6) Appoint an agent for service of process in the State of California and file the appointment with the commissioner within 30 calendar days after the effective date.

(b) The trust agreement and any amendments to it shall be filed with the commissioner within 30 calendar days after its effective date. The commissioner may order a prospectively applicable modification, correction, disapproval, or termination of any trust arrangement, agreement, or amendment which fails to meet the requirements set forth in this chapter. Any order of the commissioner shall be in writing and shall specify the reasons for the modifications, corrections, disapproval, or termination.

(c) The ceding mortgage guaranty insurer shall make quarterly, annual, and interim reports on the segregated trust account at the time as they are required or requested by the commissioner on forms prescribed by the commissioner.

(d) The commissioner may adopt rules and regulations necessary to carry out the provisions of this section including appropriate rules or regulations to assure that the trust assets are legally segregated, reasonably liquid, secure, and accessible.

(Added by Stats. 1990, Ch. 772, Sec. 3.)

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