You want to Amend Your Certificate of Authority?

The licensing of an insurance company to sell insurance in California is under exclusive jurisdiction of the California Department of Insurance. The amendment of a Certificate of Authority to add a class of insurance is a relatively straight forward process. The Insurance Commissioner’s evaluation of the documents submitted in support of you application is a time-consuming process designed to provide a basis for the Insurance Commissioner’s decision regarding the applicant’s business experience and financial ability to stand behind policies of insurance sold to residents of the state of California.

In general, various forms and instructions necessary to comply with a number of the requirements for an application for a certificate of authority have been available on the Insurance Commissioner's website for a number of years. Doing it right the first time is what expedites the process. The Insurance Commissioner's staff is helpful if you are prepared and have anticipated their concerns and addressed them in your application. If not, prepare for a long drawn out process. If you want to try to handle the application yourself, focus on the following important considerations and follow the rules as closely as possible.

Business Plan

A company’s business plan is unique to the company’s operations and marketing strategy. The infrastructure and the manner in which you intend to market the insurance product within the class of insurance for which you are applying, how you will collect and invest the insurance premium, how you will establish reserves and in what securities or assets they will invest those reserves reflects your company's ability to compete against other admitted companies for the same insurance product. The detail information contained in a business plan and marketing strategy is unique and, at least for those successful operations, is a coveted trade secret and yours should reflect your vision of how to penitrate the marketplace with your unique product. Your business plan is central to your application for an Amended Certificate of Authority. Other considerations are important;however, the detailed business plan will make the other condiderations fall into place. Another and almost as important consideration is the proper use of reinsurance is an area that the Insurance Commission will closely review. Reinsurance has a tremendous impact on the financial strength, viability and profitability of the Company. Arrangements with reinsurers are individually negotiated, and an executive with sharp negotiating skills can "cut better deals" for the Company.