CHAPTER 2. Administration [51610. - 51643.5.]

Cal. Health and Safety Code - HSC 2.
in effect

Cal. Health and Safety Code - HSC § 51610. Section 51610.

(a) The agency shall, with respect to the implementation of this part, and notwithstanding any other provision of law, have the general powers set forth in Sections 51050 and 51058 and in this part and, in addition, may do any and all things necessary to carry out its purposes and exercise the powers expressly granted by this part. (b) The fund shall develop and maintain complete and current statistics and other information with respect to the loan insurance program, including, but not limited to, each of the following: (1) Mortgage arrearages, defaults, and foreclosures on insured loans. (2) Expenses incurred as a result of those arrearages, defaults, and foreclosures. (3) The extent of displacement caused by availability of insured loans. (c) The information required by subdivision (b) shall be provided in the agency’s annual report as required by Section 51622.

Cal. Health and Safety Code - HSC § 51611. Section 51611.

(a) The California Housing Loan Insurance Fund is hereby created in the State Treasury. (b) The California Housing Insurance Fund is hereby renamed the California Housing Loan Insurance Fund. All references in any provision of law to the California Housing Insurance Fund shall be deemed to refer to the California Housing Loan Insurance Fund. Notwithstanding Section 13340 of the Government Code, all money in the insurance fund is hereby continuously appropriated to the agency without regard to fiscal year for the purpose of insuring loans and bonds pursuant to this part and for the purpose of defraying administrative expenses incurred by the agency in operating these programs of loan and bond insurance. All insurance premiums shall be deposited in the insurance fund. Mortgage insurance in force under certificates of insurance by the California Housing Insurance Fund shall continue in force without interruption after the effective date of this act. (c) Notwithstanding Chapter 2 (commencing with Section 12850) of Part 2.5 of Division 3 of Title 2 of the Government Code, Article 2 (commencing with Section 13320) of Chapter 3 of Part 3 of Division 3 of Title 2 of the Government Code, or any other provision of law, expenditures of the insurance fund shall not be subject to the supervision or approval of any other officer or division of state government. However, the agency’s budget respecting the insurance fund shall be prepared and reviewed in accordance with Section 50913. (d) The agency shall, from time to time, direct the Treasurer to invest moneys in the insurance fund which are not required for its current needs in eligible securities designated by the agency from among those specified in Section 16430 of the Government Code or as otherwise permitted by law. The agency may direct the Treasurer to deposit moneys in the insurance fund in interest-bearing accounts in state or national banks or other financial institutions having principal offices in this state. To the extent permitted by law, the agency may invest moneys in the fund in obligations of financial institutions, as permitted by board resolution. The agency may also require the transfer of moneys in the insurance fund to the Surplus Money Investment Fund for investment pursuant to Article 4 (commencing with Section 16470) of Chapter 3 of Part 2 of Division 4 of Title 2 of the Government Code.

Cal. Health and Safety Code - HSC § 51614. Section 51614.

(a) The agency is hereby vested with full power, authority, and jurisdiction over the insurance fund. The agency may perform all acts necessary or convenient in the exercise of any power, authority, or jurisdiction over the insurance fund, either in the administration thereof or in connection with the business administered under this part, as fully and completely as the governing body of a private insurance carrier. (b) The agency may create task forces and advisory committees, when appropriate and as the members deem necessary, for the purpose of obtaining advice on issues arising as a result of the agency’s activities under this part. Ex officio members of those task forces and advisory committees may include, but are not limited to, the Insurance Commissioner or his or her designee, the Director of Housing and Community Development or his or her designee, the Director of the Seismic Safety Commission or his or her designee, and the Director of Emergency Services or his or her designee.

Cal. Health and Safety Code - HSC § 51615. Section 51615.

(a) Division 10 (commencing with Section 7920.000) of Title 1 of, and Article 9 (commencing with Section 11120) of Chapter 1 of, Chapter 3.5 (commencing with Section 11340) of, Chapter 4 (commencing with Section 11370) of, and Chapter 5 (commencing with Section 11500) of, Part 1 of Division 3 of Title 2 of, the Government Code shall apply to the agency with respect to the administration of the insurance fund. (b) Notwithstanding subdivision (a), the provisions described in that subdivision shall not apply to any of the following: (1) The agency’s activities and records relating to establishing rates and premiums. (2) Bids or contracts for insurance, coinsurance, and reinsurance. (3) Other matters necessary to maintain the competitiveness of the agency in the mortgage insurance industry, including, but not limited to, the development of financial products.

Cal. Health and Safety Code - HSC § 51620. Section 51620.

In conducting the business and affairs of the insurance fund, the executive director may do any of the following: (a) Enter into contracts of insurance. (b) Decline to insure any risk in which the minimum requirements of the insurance fund are not complied with, or which is beyond the safe carrying of the insurance fund. (c) Reinsure any risk or any part thereof. (d) Make rules for the settlement of claims against the insurance fund and determine to whom and through whom the payments are to be made. (e) Enter into any contracts or obligations relating to the fund. (f) Invest and reinvest the moneys belonging to the fund as provided by this part or Part 3 (commencing with Section 50900). (g) Conduct all business and affairs and perform all acts relating to the fund whether or not specifically designated in this part.

Cal. Health and Safety Code - HSC § 51622. Section 51622.

(a) The agency may contract with any private person or public agency for review of the administration of this part and for assistance in implementing this part. (b) The agency shall prepare a biennial report on the condition of the program of loan and bond insurance authorized by this part. The report of the evaluation shall include an evaluation of program effectiveness in relation to cost and shall include recommendations and suggested legislation for the improvement of the program, if any. The agency shall obtain an annual agreed-upon procedures engagement of the insurance fund’s books and accounts with respect to its activities under this part to be made at least once for each calendar year by an independent certified public accountant. A copy of the annual agreed-upon procedures engagement and biennial report shall be transmitted to the Governor, to the chairperson and vice-chairperson of the Senate and Assembly housing policy committees, the Senate and Assembly budget committees, and the Joint Legislative Budget Committee, and made available for review by interested parties no later than November 1 of each year for the annual agreed-upon procedures engagement and November 1 biennially for the program evaluation report. (c) For purposes of this section, the agreed-upon procedures engagement shall be conducted in accordance with the Statements on Standards for Attestation Engagements Number 10, as issued by the American Institute of Certified Public Accountants.

Cal. Health and Safety Code - HSC § 51623. Section 51623.

(a) The California Housing Loan Insurance Fund, as provided for pursuant to Section 51653 as it read prior to the effective date of the act that adds this part, is continued in existence, and, pursuant to Section 51603, is referred to as the insurance fund. Notwithstanding Section 13340 of the Government Code, all money in the insurance fund is hereby continuously appropriated to the agency without regard to fiscal year for the purpose of insuring loans and bonds pursuant to this part and for the purpose of defraying administrative expenses incurred by the fund in operating those programs of loan and bond insurance. All insurance premiums shall be deposited in the insurance fund. (b) The insurance fund shall be administered by the agency for the purpose of insuring loans and bonds as provided in this part. Any appropriation made therefrom or thereto before the effective date of this section shall continue to be available for the purposes for which it was made.

Cal. Health and Safety Code - HSC § 51624. Section 51624.

The agency shall prepare a preliminary budget for the agency’s activities under this part on or before December 1 of each year for the ensuing fiscal year, to be reviewed by the Secretary of Business, Consumer Services and Housing, the Director of Finance, and the Joint Legislative Budget Committee.

Cal. Health and Safety Code - HSC § 51625. Section 51625.

(a) The agency shall cause all moneys in the insurance fund which are in excess of current requirements to be invested and reinvested, from time to time, in the same manner as provided for private insurance carriers pursuant to Article 3 (commencing with Section 1170) of Chapter 2 of Part 2 of Division 1 of the Insurance Code. (b) All interest or other increment resulting from the investment shall be deposited in the insurance fund, notwithstanding Section 16305.7 of the Government Code. Moneys in the insurance fund shall not be subject to transfer to any other fund pursuant to Part 2 (commencing with Section 16300) of Division 4 of Title 2 of the Government Code, except the Surplus Money Investment Fund.

Cal. Health and Safety Code - HSC § 51627. Section 51627.

The assets of the insurance fund shall be applicable to the payment of losses sustained on account of insurance and to the payment of the salaries and other expenses charged against it in accordance with this part.

Cal. Health and Safety Code - HSC § 51628. Section 51628.

The agency shall, after a reasonable time during which it may establish a business, be competitive with other insurers, and it is the intent of the Legislature that the insurance fund shall ultimately become neither more nor less than self-supporting. However, this section shall not be construed to preclude the insurance fund from operating in a manner that will permit the agency to create additional reserves from operations in order that the agency can maximize its insurance capacity.

Cal. Health and Safety Code - HSC § 51632. Section 51632.

Claims arising out of activities of the agency on behalf of the insurance fund pursuant to this part are exempted from the provisions of Part 3 (commencing with Section 900) of Division 3.6 of Title 1 of the Government Code.

Cal. Health and Safety Code - HSC § 51636. Section 51636.

Except as provided in this part, the agency, on behalf of the insurance fund pursuant to this part, shall not be subject to the provisions of the Government Code made applicable to state agencies generally or collectively, unless the section specifically names the fund as an agency to which the provision applies.

Cal. Health and Safety Code - HSC § 51637. Section 51637.

With respect to the administration of the insurance fund, the agency shall be subject to the provisions of Chapter 10.3 (commencing with Section 3512) of Division 4 of Title 1 of, and Division 5 (commencing with Section 18000) of Title 2 of, the Government Code, and any other personnel management provisions in law that are generally applicable to state employees. Notwithstanding subdivision (e) of Section 3513 of the Government Code, up to five positions of the insurance fund of the agency may be designated as managerial under Section 18801.1 of the Government Code. All other position designations in the insurance fund of the agency are subject to Sections 3513 and 18801.1 of the Government Code. In making these designations, consideration shall be given to the agency’s need and continued ability to attract and maintain qualified individuals within the insurance fund.

Cal. Health and Safety Code - HSC § 51639. Section 51639.

The agency shall establish reserve accounts for unearned premiums, losses, and potential catastrophic losses caused by economic cycles. The agency shall not cause sums to be withdrawn from the loan insurance reserve account in amounts which would reduce the moneys therein to less than the insurance reserve requirement, except as necessary to satisfy liabilities arising under contracts of loan insurance. In the event that the loan insurance reserve account is reduced to less than the insurance reserve requirement, the agency shall cease making commitments for, and contracts of, insurance until the loan insurance reserve account has been restored to satisfy that requirement.

Cal. Health and Safety Code - HSC § 51640. Section 51640.

There is hereby continued in existence a bond insurance reserve account in the insurance fund to secure commitments under contracts to insure bonds. The agency shall take all reasonable steps to ensure that the bond reserve account is continuously maintained at not less than the bond reserve requirement. The agency shall not cause sums to be withdrawn from the bond insurance reserve account in amounts which would reduce the moneys therein to less than the bond reserve requirement, except as necessary to satisfy liabilities arising under contracts of bond insurance. In the event that the bond insurance reserve account is reduced to less than the bond reserve requirement, the agency shall cease making contracts of bond insurance until the account has been restored to satisfy that requirement.

Cal. Health and Safety Code - HSC § 51642. Section 51642.

(a) The obligation of the agency and of the state to pay any insurance benefit pursuant to contracts of insurance insuring loans or bonds shall not exceed amounts deposited in the insurance fund that are made available therefor under the respective contracts of insurance. Nothing in this part shall require the Legislature to appropriate moneys from the General Fund in the State Treasury to the insurance fund on account of these obligations. The insurance of loans or bonds under this part shall not directly, indirectly, or contingently obligate the state or any political subdivision thereof to levy or to pledge any form of taxation whatever therefor or to make any appropriation for their payment. (b) All contracts of insurance insuring loans or bonds pursuant to this part shall contain on the face thereof a statement to the following effect: “Neither the faith and credit nor the taxing power of the State of California is pledged to the payment of the principal of or interest on this contract of insurance.” (c) Moneys in the insurance fund received from the proceeds of bonds issued pursuant to the California Housing and Jobs Investment Bond Act may not be transferred to any other fund of the agency except as necessary to pay the expenses of operating the program of loan and bond insurance for single-family residential housing authorized by this part, nor shall the agency utilize any of these moneys under the direction and control of the agency, other than moneys in the insurance fund, to satisfy liabilities arising from contracts of insurance authorized by this part. (d) Moneys in the insurance fund may not be transferred to any other fund of the agency except as necessary to pay the expenses of operating the program of loan and bond insurance authorized by this part, nor shall the agency utilize any moneys under the direction and control of the agency to satisfy liabilities arising from contracts of insurance authorized by this part. (e) The agency, on behalf of, or for the benefit of, the California Housing Loan Insurance Fund, may borrow or receive moneys from the agency or from any federal, state, or local agency or private entity, or may pledge funds from the California Housing Finance Fund, in order to create or support reserves in the insurance fund for loan or bond insurance as provided in this part and as authorized by resolution of the board of directors. (f) The agency shall create a separate reserve account for insuring mortgages of multifamily housing developments which shall consist of all of the following: (1) Funds transferred by redevelopment agencies pursuant to Section 33334.2. The use of these funds shall be consistent with Section 33334.4. (2) Any other funds available for insuring mortgages of multifamily housing developments as may be made available for that purpose by law and as provided in this part. (g) Reserve funds for the single-family mortgage guarantee insurance program and the multifamily residential mortgage guaranty insurance program shall not be commingled.

Cal. Health and Safety Code - HSC § 51643.5. Section 51643.5.

(a) The agency shall be subject to, and comply with, the same reserve certification requirements as mortgage guaranty insurers who are licensed pursuant to Chapter 2A (commencing with Section 12640.01) of Part 6 of Division 2 of the Insurance Code. (b) The agency shall not otherwise be subject to the Insurance Code with respect to the operation of the insurance fund, except as provided in this part.
Source: CA Legislative Counsel Bulk DataURL: https://downloads.leginfo.legislature.ca.gov/pubinfo_2025.zipFetched: 6/27/2026

Starting a business in California? California LLC guide: costs and requirements