Insurance Code section 12163

(a)

The security required by subdivision (b) of Section 12162 shall thereafter be continuously maintained by a motor club in one of the forms prescribed. Failure of a motor club so to maintain the same shall be cause for revoking its certificate of authority.

(b)

Such security shall be for the protection, use, and benefit of all persons whose applications for membership in a motor club have been accepted by such club or its representative and of this state as respects fees, fines, penalties, and taxes. Such security shall be subject to the following conditions, and, if a bond, shall be expressly so conditioned:
1.The club shall faithfully furnish and render to all persons whose applications for membership have been accepted any and all of the motor club benefits and services sold or offered for sale by it.
2.The club will faithfully conform to all provisions of law of the state pertaining to the sale and rendering of “motor club service” as defined and provided in Part 5 (commencing with Section 12140) of Division 2 of this code.
3.The club will promptly pay all fees, fines, penalties, and taxes which may be levied against it under authority of law.
4.If the club ceases to do business in this state as a motor club, it shall comply with the appropriate withdrawal procedure.

(c)

Any person defrauded or injured by any wrongful act, misrepresentation, or failure on the part of the club with respect to the selling or rendering of any of its benefits or services may bring suit on the bond, if the security be a bond, in his own name. The commissioner may bring suit on such bond. If the security be a deposit of securities, any such a person or the commissioner may levy upon the same in execution of a judgment.

Source: Section 12163, https://leginfo.­legislature.­ca.­gov/faces/codes_displaySection.­xhtml?lawCode=INS§ionNum=12163.­ (accessed Apr. 24, 2025).

Last Updated

Apr. 24, 2025

§ 12163’s source at ca​.gov