If, after a hearing, the commissioner is satisfied that an insurer is carrying upon its books any parcel or parcels of real estate at values exceeding the sound market value thereof, he or she may order the insurer to:

(a) Create an adequate contingency reserve against the book value of the parcel or parcels, or

(b) Reduce the book value of the parcel or parcels by a corresponding amount.

In the case of real estate, not of a character described in subdivision (a), (b), (h), or (i) of Section 1194.86, which has been held by the insurer for more than five years, the commissioner may order the insurer to dispose of the real estate within six months if, after a hearing, the commissioner is satisfied that:

(1) The insurer has refused reasonable offers for the sale of the real estate, or

(2) The real estate may be disposed of without undue hardship to the insurer.

For the purpose of enabling him or her to determine whether to issue an order pursuant to this section, the commissioner, if he or she is not satisfied with the appraisal furnished at his or her request by the insurer, may appraise the real estate at the expense of the insurer.

The commissioner may suspend or revoke the certificate of authority of an insurer failing to comply with any order issued under this section.

(Amended by Stats. 1992, Ch. 427, Sec. 115. Effective January 1, 1993.)