Insurance Code — Part 16 | INS — United States — California law | Esheria

Insurance Code

Part 16 of 23 · provisions 3,001–3,200

This section says the act is known as the Insurance Code.

Jurisdiction
United States — California
Instrument
Code
Citation
INS
Version
Undated source snapshot
Language
en
Official source
View official record ↗
Complete work
View statute overview
AI in insurance AIDS/HIV prevention API access API compliance CAQH CO-OP COBRA COVID-19 coverage DMV records ERISA FAIR Plan HIV HIV test result disclosure HIV testing Holocaust survivor insurance claims Holocaust-era insurance policies Holocaust-era insurance records Medi-Cal Medi-Cal coordination Medi-Cal eligibility Medicaid Medicare Medicare supplement policies ORSA information handling +4,225 more

Statute overview

About this statute

This section defines “underwriters’ corps” for this chapter. This chapter must not impair or interfere with the powers or duties of a municipality’s regular fire department. An owner of property cannot treat an underwriters’ corps act as a justification for abandoning the property. Certain domestic insurance-underwriter corporations may maintain an underwriter’s corps at their own expense if they meet the stated fire-prevention and local-business conditions. An underwriter’s corps may enter certain burning or fire-exposed buildings and may remove or protect property from fire or water damage while a fire is happening and immediately after.

Read the provisions Ask with citations

Legal text

Provisions of Insurance Code

Showing 200 of 4,461

  1. 1736.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 12. Conduct of Licensee [1724 - 1736.5] ( Article 12 added by Stats. 1959, Ch. 4. )

    Verify source ↗

    If the code forbids an act or prescribes conduct, the organization and any licensed person acting for it must not do the forbidden act and must follow the prescribed conduct.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 12. Conduct of Licensee [1724 - 1736.5] ( Article 12 added by Stats. 1959, Ch. 4. ) ## 1736. If any acts are forbidden or conduct prescribed by any provisions of this code, such acts shall not be performed and such conduct shall be followed by both the organization and by any person named to exercise the power and perform the duties under any license issued to such organization. (Repealed and added by Stats. 1959, Ch. 4.)
  2. 1736.5.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 12. Conduct of Licensee [1724 - 1736.5] ( Article 12 added by Stats. 1959, Ch. 4. )

    Verify source ↗

    Licensees and applicants must promptly respond in writing to certain commissioner inquiries, generally within 21 days.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 12. Conduct of Licensee [1724 - 1736.5] ( Article 12 added by Stats. 1959, Ch. 4. ) ## 1736.5. (a) Every licensee and applicant shall promptly reply in writing to an inquiry from the commissioner relative to an application for, or the retention or renewal of, a license, or an investigation relating to a consumer complaint or a matter relating to a producer licensing background change reporting requirement under Section 1729.2. The commissioner may revoke, suspend, or refuse to issue or renew a license if the licensee or applicant does not promptly reply in writing to an inquiry from the commissioner. (b) For purposes of this section, “promptly reply” means to provide a written response to the inquiry that is received by the commissioner no later than 21 days after the date the inquiry was mailed or otherwise communicated to the applicant or licensee. (c) For purposes of this section, the term “licensee” and “applicant” have the same definitions as those contained in paragraph (3) of subdivision (c) of Section 1729.2, and the licenses covered by this section are the same as those covered by paragraph (1) of subdivision (c) of Section 1729.2. (Added by Stats. 2005, Ch. 312, Sec. 5. Effective January 1, 2006.)
  3. 1737.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13. Disciplinary Actions [1737 - 1748.5] ( Article 13 added by Stats. 1959, Ch. 4. )

    Verify source ↗

    This section says the chapter exists to protect the public and maintain professional conduct standards for all persons licensed under it.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13. Disciplinary Actions [1737 - 1748.5] ( Article 13 added by Stats. 1959, Ch. 4. ) ## 1737. The purpose of this chapter is to protect the public by requiring and maintaining professional standards of conduct on the part of all persons licensed hereunder. (Repealed and added by Stats. 1959, Ch. 4.)
  4. 1738.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13. Disciplinary Actions [1737 - 1748.5] ( Article 13 added by Stats. 1959, Ch. 4. )

    Verify source ↗

    The commissioner may suspend or revoke a permanent license on specified grounds, and some Section 1669 actions may proceed without notice or hearing.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13. Disciplinary Actions [1737 - 1748.5] ( Article 13 added by Stats. 1959, Ch. 4. ) ## 1738. The commissioner may suspend or revoke a permanent license issued pursuant to this chapter on any of the grounds set forth in Article 6 hereof on which the commissioner may deny an application. When the word “applicant” is used in those grounds, the word shall for the application of this section be the words “the holder of a permanent license.” A suspension or revocation based upon a ground set forth in Section 1669 may be without notice or hearing. Suspension or revocation of any permanent license, except a restricted license, on a ground other than that set forth in Section 1669 shall be after notice and hearing conducted in accordance with Chapter 5 of Part 1 of Division 3 of Title 2 of the Government Code, and the commissioner has all of the powers granted therein. (Amended by Stats. 2021, Ch. 133, Sec. 25. (SB 272) Effective July 23, 2021.)
  5. 1738.5.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13. Disciplinary Actions [1737 - 1748.5] ( Article 13 added by Stats. 1959, Ch. 4. )

    Verify source ↗

    Certain elder-misconduct disciplinary proceedings must be heard within 90 days after the department receives the notice of defense, unless a continuance is granted.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13. Disciplinary Actions [1737 - 1748.5] ( Article 13 added by Stats. 1959, Ch. 4. ) ## 1738.5. Upon the request of the department, a proceeding held pursuant to Section 1668, 1668.5, 1738, 1739, or 12921.8 that involves allegations of misconduct perpetrated against a person age 65 or over shall be held within 90 days after receipt by the department of the notice of defense, unless a continuance of the hearing is granted by the department or the administrative law judge. If the Office of Administrative Hearings cannot accommodate a hearing within 90 days, the hearing shall be set on the earliest available date and the delay shall not prejudice either party. When the matter has been set for hearing, only the administrative law judge may grant a continuance of the hearing. The administrative law judge may, but need not, grant a continuance of the hearing, only upon finding the existence of one or more of the following: (a) The death or incapacitating illness of a party, a representative or attorney of a party, a witness to an essential fact, or of the parent, child, or member of the household of any of these persons, when it is not feasible to substitute another representative, attorney, or witness because of the proximity of the hearing date. (b) Lack of notice of hearing as provided in Section 11509 of the Government Code. (c) A material change in the status of the case where a change in the parties or pleadings requires postponement, or an executed settlement or stipulated findings of fact obviate the need for hearing. A partial amendment of the pleadings shall not be good cause for continuance to the extent that the unamended portion of the pleadings is ready to be heard. (d) A stipulation for continuance signed by all parties, or their authorized representatives, that is communicated with the request for continuance to the administrative law judge no later than 25 business days before the hearing. (e) The substitution of the representative or attorney of a party upon showing that the substitution is required. (f) The unavailability of a party, representative, or attorney of a party, or witness to an essential fact, due to a conflicting and required appearance in a judicial matter if, when the hearing date was set, the person did not know and could neither anticipate nor at any time avoid the conflict, and the conflict, with the request for continuance, is immediately communicated to the administrative law judge. (g) The unavailability of a party, a representative or attorney of a party, or a material witness due to an unavoidable emergency. (h) Failure by a party to comply with a timely discovery request if the continuance request is made by the party who requested the discovery. (Amended by Stats. 2020, Ch. 184, Sec. 19. (SB 1255) Effective January 1, 2021.)
  6. 1739.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13. Disciplinary Actions [1737 - 1748.5] ( Article 13 added by Stats. 1959, Ch. 4. )

    Verify source ↗

    An organization’s permanent license is treated as held by the organization and any named natural persons, and the commissioner may suspend or revoke the organization’s license, the natural person’s license, or both if a named person commits a disqualifying act or fails a disqualifying duty.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13. Disciplinary Actions [1737 - 1748.5] ( Article 13 added by Stats. 1959, Ch. 4. ) ## 1739. Where a permanent license is held by an organization both the organization itself and any natural persons named thereon shall, for the purposes of this article, be deemed to be the holders thereof. If that natural person commits any act or fails to perform any duty which is a ground for suspension or revocation of the license held by the organization, that action may be taken against the organization. If any natural person named under an organization license commits any act or fails to perform any duty which is a ground for the suspension or revocation of any license held by the organization, the commissioner may suspend or revoke the license of the organization, or the license of the natural person, or may take all of those steps. (Amended by Stats. 1990, Ch. 1420, Sec. 61. Operative January 1, 1992, by Sec. 77 of Ch. 1420.)
  7. 1740.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13. Disciplinary Actions [1737 - 1748.5] ( Article 13 added by Stats. 1959, Ch. 4. )

    Verify source ↗

    A certificate from the commissioner about facts found after a hearing under this chapter is prima facie evidence of those facts.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13. Disciplinary Actions [1737 - 1748.5] ( Article 13 added by Stats. 1959, Ch. 4. ) ## 1740. The certificate of the commissioner certifying any facts found after a hearing held under this chapter shall be prima facie evidence of the facts set forth therein. (Repealed and added by Stats. 1959, Ch. 4.)
  8. 1741.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13. Disciplinary Actions [1737 - 1748.5] ( Article 13 added by Stats. 1959, Ch. 4. )

    Verify source ↗

    After a hearing, the commissioner may order a licensee to take and pass a qualifying examination, and must set the exam time.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13. Disciplinary Actions [1737 - 1748.5] ( Article 13 added by Stats. 1959, Ch. 4. ) ## 1741. If the commissioner finds, after a hearing, that there are grounds for the denial of an application for a license to act in any capacity set forth in Article 1 of this chapter or if the commissioner finds, after a hearing, that any licensee has violated the provisions of this code and that the violation would justify the suspension or revocation of any license held by the person, the commissioner may order the licensee to prove the licensee’s qualifications by taking and passing the qualifying examination for any license held or applied for. The commissioner shall set the time for the taking of the examination. Failure thereof by any licensee shall result in the termination of all licenses of the licensee to which the examination is applicable. An order to take the examination may be in lieu of any other action in respect to the application or the license, or, except in the case of revocation, may be in addition to any other action. (Amended by Stats. 2021, Ch. 133, Sec. 26. (SB 272) Effective July 23, 2021.)
  9. 1742.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13. Disciplinary Actions [1737 - 1748.5] ( Article 13 added by Stats. 1959, Ch. 4. )

    Verify source ↗

    The commissioner may discipline licenses under this chapter, including revoking a license, denying an unrestricted license application, or issuing a restricted license instead.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13. Disciplinary Actions [1737 - 1748.5] ( Article 13 added by Stats. 1959, Ch. 4. ) ## 1742. Where a person who is or has been licensed under this chapter has been found by the commissioner to have violated any provision of this code which would justify the suspension or revocation of a license held, or where a person is applying for a license under this chapter and there exists grounds for the denial by the commissioner of his application, the commissioner may, after hearing, revoke the license held or deny the application for an unrestricted license, and in lieu thereof issue to such a person a restricted license. The commissioner may impose any reasonable conditions upon the acquisition of such restricted license or the conduct of the holder thereof. The holder of the restricted license has no property right therein and the commissioner may, with or without either hearing or cause, suspend or revoke a restricted license. If a hearing is held under this section, it shall be conducted in accordance with Chapter 5, Part 1, Division 3, Title 2 of the Government Code. The holder of a restricted license is subject to all the provisions of this code and such license shall be kept in force and renewed in the same manner, at the same time, and subject to the same conditions and fees as are applicable to an unrestricted license to act in the same capacity. (Added by Stats. 1959, Ch. 4.)
  10. 1742.2.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13. Disciplinary Actions [1737 - 1748.5] ( Article 13 added by Stats. 1959, Ch. 4. )

    Verify source ↗

    The department must issue regulations needed to comply with Section 1033 of Title 18 of the U.S. Code by January 1, 2001.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13. Disciplinary Actions [1737 - 1748.5] ( Article 13 added by Stats. 1959, Ch. 4. ) ## 1742.2. The department shall promulgate regulations necessary to comply with the requirements of Section 1033 of Title 18 of the United States Code no later than January 1, 2001. (Added by Stats. 1999, Ch. 782, Sec. 5. Effective January 1, 2000.)
  11. 1742.3.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13. Disciplinary Actions [1737 - 1748.5] ( Article 13 added by Stats. 1959, Ch. 4. )

    Verify source ↗

    The commissioner may deny an unrestricted insurance license and issue a restricted license instead, and can later suspend or revoke the restricted license.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13. Disciplinary Actions [1737 - 1748.5] ( Article 13 added by Stats. 1959, Ch. 4. ) ## 1742.3. (a) The commissioner may, without hearing, issue an order denying an application by a business entity for an unrestricted license and granting instead a restricted license. The commissioner may do so when a controlling person of the business entity, as defined in subdivision (b) of Section 1668.5, holds a restricted license. The commissioner may impose any reasonable restriction on the business entity’s authority to transact insurance that is similar or related to the restriction imposed upon the controlling person. A description of the nature and scope of the restriction imposed upon the business entity shall be included in the commissioner’s order. The business entity shall have no property right in the restricted license and the commissioner may, with or without hearing or cause, suspend or revoke the restricted license. The restricted license shall be issued in the normal course of business following the issuance of the order and shall remain in effect pending the outcome of any request for reconsideration and any decision following a hearing pursuant to that request. (b) The business entity may request reconsideration of the commissioner’s decision to deny an unrestricted license within 30 days from the date that the decision is mailed to the entity. If the business entity requests a hearing on the request for reconsideration, the hearing shall be conducted pursuant to Article 10 (commencing with Section 11445.10) of Chapter 4.5 of Part 1 of Division 3 of Title 2 of the Government Code, and the business entity shall bear the burden of proving by clear and convincing evidence that an unrestricted license should have been granted instead of a restricted license. If the commissioner determines, after a hearing, that the business entity should have been granted an unrestricted license, the entity shall be granted that unrestricted license retroactive to the date of the granting of the restricted license. (Added by Stats. 2010, Ch. 400, Sec. 13. (AB 2782) Effective January 1, 2011.)
  12. 1743.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13. Disciplinary Actions [1737 - 1748.5] ( Article 13 added by Stats. 1959, Ch. 4. )

    Verify source ↗

    The commissioner keeps jurisdiction over disciplinary action even if a license lapses, is suspended, is not renewed, or is voluntarily surrendered, but may not start a disciplinary proceeding more than five years after the license ends.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13. Disciplinary Actions [1737 - 1748.5] ( Article 13 added by Stats. 1959, Ch. 4. ) ## 1743. The lapse or suspension of any license by operation of law, by failure to renew or by its voluntary surrender shall not deprive the commissioner of jurisdiction or right to institute or proceed with any disciplinary proceeding against such license, to render a decision suspending or revoking such license or to establish and make a record of the facts of any violation of law for any lawful purpose. No such disciplinary proceeding shall be instituted against any license after the expiration of five years from the termination of such license. (Added by Stats. 1959, Ch. 4.)
  13. 1744.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13. Disciplinary Actions [1737 - 1748.5] ( Article 13 added by Stats. 1959, Ch. 4. )

    Verify source ↗

    Filing a statement of issues can automatically suspend a certificate of convenience tied to a license application, and a denial order automatically ends that certificate on the denial’s effective date.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13. Disciplinary Actions [1737 - 1748.5] ( Article 13 added by Stats. 1959, Ch. 4. ) ## 1744. The filing of a statement of issues pursuant to Chapter 5, Part 1, Division 3, Title 2 of the Government Code specifying grounds for denial of an application for a license to act in any capacity under this chapter shall automatically suspend any certificate of convenience issued with respect to any such application until the decision and order in the matter of such statement of issues becomes final, and if the order in such matter is for the denial of the application for any such license, the certificate of convenience with respect thereto shall automatically terminate on the effective date of such denial. (Added by Stats. 1959, Ch. 4.)
  14. 1747.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13. Disciplinary Actions [1737 - 1748.5] ( Article 13 added by Stats. 1959, Ch. 4. )

    Verify source ↗

    The commissioner may order a property broker-agent or casualty broker-agent to fix required records within 60 days, and failure to comply can lead to suspension or revocation of the license.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13. Disciplinary Actions [1737 - 1748.5] ( Article 13 added by Stats. 1959, Ch. 4. ) ## 1747. When the commissioner may determine or have good cause to believe that any property broker-agent or casualty broker-agent has failed to keep or maintain the records required by Section 1727, in connection with or in lieu of any other disciplinary action against the license of the licensee, the commissioner may issue the commissioner’s order requiring the licensee to establish and currently complete those records within 60 days from the date of the order. When the order is given in lieu of other disciplinary action, notice of the order may be given by certified mail addressed to the office of the licensee. Failure of the licensee to comply with the order within the time specified therein shall be grounds for the suspension or revocation of the license or licenses of the licensee, and the proceeding shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. (Amended by Stats. 2021, Ch. 133, Sec. 27. (SB 272) Effective July 23, 2021.)
  15. 1748.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13. Disciplinary Actions [1737 - 1748.5] ( Article 13 added by Stats. 1959, Ch. 4. )

    Verify source ↗

    The commissioner may let a licensee pay a money penalty instead of suspension, and can later deny, suspend, or revoke a license if payment is not made on time.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13. Disciplinary Actions [1737 - 1748.5] ( Article 13 added by Stats. 1959, Ch. 4. ) ## 1748. The commissioner, in any proceeding under the provisions of this article, may, by an alternative order, permit a licensee to elect in writing to pay a specified money penalty, within a specified time in lieu of a license suspension or other permitted action. If the licensee so elects, the sum of money specified shall be paid to the commissioner for the use of the State of California. The sum specified shall not exceed: (a) Four thousand dollars ($4,000) for each offense. (b) Twenty thousand dollars ($20,000) in the aggregate for all offenses involved in any one proceeding. (c) Thirty percent of the gross commissions on insurance transacted by the licensee in the preceding calendar year. (d) Any amount proven, or admitted, in the proceeding to have been received and retained by the licensee in violation of this code. The commissioner shall determine the monetary penalty to be paid in any given case and in so doing shall not be limited to the selection of the penalty specified in any one of the above subdivisions, as compared with the penalty in any of the other three subdivisions, that will result in the payment by the licensee of the least amount. The amount of reimbursement the commissioner orders shall be the amount that fully reimburses the commissioner for the commissioner’s costs, or any lesser amount that the commissioner determines is the most the subject of the order can pay in the event the subject is financially unable to fully reimburse the commissioner. If a licensee fails to pay a monetary penalty or reimbursement within the time specified in the order, the commissioner, unless the order is lawfully stayed, may deny a pending application for a license, or may revoke or suspend the license of the subject of the order for a period of time as determined by the commissioner. If, for any reason, an application is denied, or a license is revoked or suspended, before the subject of the order has paid the full amount of an ordered monetary penalty or reimbursement, the balance owed shall be paid before a license may be reinstated or an application for any new license may be granted. (Amended by Stats. 1999, Ch. 782, Sec. 6. Effective January 1, 2000.)
  16. 1748.5.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13. Disciplinary Actions [1737 - 1748.5] ( Article 13 added by Stats. 1959, Ch. 4. )

    Verify source ↗

    This section lets the commissioner suspend or remove a subject person from working with a production agency or insurer, and bar participation in the business, if specified misconduct, fraud, or certain criminal charges are found.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13. Disciplinary Actions [1737 - 1748.5] ( Article 13 added by Stats. 1959, Ch. 4. ) ## 1748.5. (a) For the purposes of this section, the following definitions are applicable: (1) “Production agency” means any person or organization licensed under Chapter 5 (commencing with Section 1621), Chapter 5A (commencing with Section 1759), Chapter 6 (commencing with Section 1760), Chapter 7 (commencing with Section 1800), or Chapter 8 (commencing with Section 1831). (2) “Subject person” means any person who has participated or may participate in any manner in the business of a production agency, or any person licensed as a producer. (3) “Insurer” means any domestic insurer, and any insurer that is admitted to transact insurance in this state, provided that if a subject person of an insurer is not a resident of California, or operating out of a place of business within California, then the subject person shall be engaged in direct management, direction, or conduct of the business of insurance in California in order to come within the provisions of this section. (b) If, after notice and a hearing, the commissioner finds all of the following, the commissioner may issue an order removing a subject person from the subject person’s office or employment with the production agency and prohibiting the subject person from participating in any manner in the conduct of the business of an insurer or production agency, except with the prior consent of the commissioner: (1) (A) The subject person has engaged in misconduct with respect to the business of insurance that has caused financial or other injury to any person, or (B) The subject person has engaged in fraud, or willful acts or omissions involving dishonesty that exposed a person to financial or other injury; and (2) The subject person’s conduct or practice demonstrates unfitness to continue as a subject person. (c) (1) If the commissioner gives written notice pursuant to subdivision (b) to a subject person, the commissioner shall immediately issue an order prohibiting the subject person from participating in any manner in the business of insurance, except with the prior consent of the commissioner, if the commissioner: (A) finds that failure to immediately issue the order threatens the financial solvency of an insurer or may reasonably be expected to cause irreparable injury to any person; (B) serves that subject person and the production agency with written notice of the suspension order; and (C) finds that all of the necessary factors are present which would permit the commissioner, after notice and a hearing, to issue an order pursuant to subdivision (b) removing a subject person from the subject person’s office or employment with the production agency and prohibiting the subject person from participating in any manner in the business of an insurer or production agency. (2) Any suspension order issued pursuant to paragraph (1) of this subdivision shall be effective until the date the commissioner dismisses the charges contained in the notice served under subdivision (b) or paragraph (1) of this subdivision, the effective date of an order issued by the commissioner pursuant to subdivision (b), or a court issues a stay of the order pursuant to subdivision (d). (d) Within 10 days after a subject person has been served with an order of suspension pursuant to subdivision (c), the person may apply to the superior court of the county in which the principal office of the production agency is located for a stay of the order pending completion of the proceedings pursuant to subdivision (b), and the court shall have jurisdiction to issue an order staying the suspension. Nothing in this subdivision shall be deemed to authorize the court to issue a stay order on an ex parte basis. (e) (1) If the commissioner finds both of the following, the commissioner shall immediately issue an order suspending a subject person from the subject person’s office or employment with a production agency and prohibiting the subject person from participating in any manner in the conduct of the business of an insurer or production agency, except with the prior consent of the commissioner: (A) the subject person has been charged in an indictment issued by a grand jury, or in an information, complaint, or similar pleading issued by a United States Attorney, district attorney, or other governmental official or agency authorized to prosecute crimes, with a crime punishable by imprisonment for a term exceeding one year and which involves as one of its necessary elements a fraudulent act or an act of dishonesty in the acceptance, custody, or payment of money or property; and (B) that a failure to immediately issue the order threatens the financial solvency of an insurer or may cause financial or other injury to any person. In the event the criminal proceedings are terminated other than by judgment of conviction, an order issued pursuant to paragraph (1) of this subdivision shall be deemed rescinded as if it had not been issued. (2) If the commissioner finds both of the following, the commissioner may immediately issue an order removing a subject person from the subject person’s office or employment with a production agency and prohibiting the subject person from participating in any manner in the business of an insurer or production agency, except with the prior consent of the commissioner: (A) the person has during the preceding five years been convicted of a crime that is punishable by imprisonment for a term exceeding one year and has as one of its necessary elements a fraudulent act or an act of dishonesty in the accepting, custody, or payment of money or property; and (B) that a failure to immediately issue the order threatens the financial solvency of an insurer or may cause financial or other injury to any person. (3) The fact that any subject person charged with a crime involving as one of its necessary elements a fraudulent act or any act of dishonesty in the acceptance, custody, or payment of money or property is not convicted of that crime shall not preclude the commissioner from issuing an order regarding the subject person pursuant to other provisions of this code. (f) (1) Within 30 days after an order is issued pursuant to subdivision (c) or (e), the subject person to whom the order is issued may choose to do either of the following: (A) file with the commissioner an application for a hearing on the order. The commissioner shall, upon the written request of the subject person, extend the 30-day period by an additional 30 days provided the request is filed with the commissioner within 30 days after the order is issued. If the commissioner fails to commence the hearing within 15 business days after the application is filed, or within a longer period of time to which the subject person consents, the order shall be deemed rescinded as if it had not been issued. Within 30 days after the hearing, the commissioner shall affirm, modify, or rescind the order; otherwise, the order shall be deemed rescinded as if it had not been issued, or (B) petition for judicial review of the order pursuant to Section 1085 of the Code of Civil Procedure, where the court shall exercise its independent judgment on the evidence. (2) The right of any subject person to whom an order is issued pursuant to subdivision (c) or (e) to petition for judicial review of the order shall not be affected by the failure of that subject person to apply to the commissioner for a hearing on the order as provided by this subdivision. (g) (1) Any person to whom an order is issued pursuant to subdivision (b), (c), or (e) may apply to the commissioner to modify or rescind the order. The commissioner shall not grant the application unless the commissioner finds that it is reasonable to believe that the person will, if and when the person becomes a subject person, comply with all of the applicable provisions of this code and of any regulation or order issued thereunder. (2) The right of any subject person to whom an order is issued pursuant to subdivision (b), (c), or (e) to petition for judicial review of the order shall not be affected by the failure of that subject person to apply to the commissioner pursuant to paragraph (1). (h) (1) It is unlawful for any subject person or former subject person to whom an order is issued pursuant to subdivision (b), (c), or (e) to do any of the following as long as the order is in effect, except with the prior consent of the commissioner: (A) to serve or act as a subject person for any insurer or production agency; or (B) to directly or indirectly vote any shares or other securities of an insurer or production agency. (2) If, after notice and a hearing, the commissioner finds that any subject person has violated paragraph (1) of this subdivision, the commissioner may order that subject person to pay to the commissioner a civil penalty, which may be recovered in a civil action, in an amount the commissioner may specify; provided however, that the amount of the civil penalty shall not exceed one thousand dollars ($1,000) for each day for which the violation continues. In determining the amount of civil penalty to be paid to the commissioner under this paragraph, the commissioner shall consider the financial resources and good faith of the subject person charged, the gravity of the violation, the history of previous violations by the person, and other factors as in the opinion of the commissioner may be relevant. (3) If, after notice and a hearing, the commissioner finds that any production agency has knowingly aided and abetted a subject person in a violation of paragraph (1) of this subdivision, or subdivision (h) of Section 728, the commissioner may order that production agency to pay to the commissioner a civil penalty in an amount the commissioner may specify; provided however, that the amount of the civil penalty shall not exceed one thousand dollars ($1,000) for each violation or in the case of a continuing violation, one thousand dollars ($1,000) for each day for which the violation continues, up to a maximum of fifty thousand dollars ($50,000). Continuation of the subject person’s salary or other employee benefits pending final disposition shall not be considered aiding and abetting a subject person. In determining the amount of civil penalty to be paid to the commissioner under this paragraph, the commissioner shall consider the financial resources and good faith of the subject person charged, the gravity of the violation, the history of previous violations by the person, and other factors as in the opinion of the commissioner may be relevant. (i) Except as otherwise provided by this section, any hearing required by this section shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, subject to the following: (1) At the option of the subject person, all hearings shall be a closed session and private, and the records of the hearings shall not be made public unless the hearing results in a final order adverse to the subject person. (2) Where judicial review is sought by the subject person pursuant to Section 1085 of the Code of Civil Procedure, the court shall exercise its independent judgment upon the evidence. (3) When a subject person to whom an order has been issued pursuant to subdivision (c) or (e) applies to the commissioner for a hearing pursuant to subparagraph (A) of paragraph (1) of subdivision (f), the Office of Administrative Hearings shall schedule the hearing on a priority basis at the earliest possible time and once the hearing is commenced, it shall not be continued for more than three business days without the consent of the subject person. (4) If the Office of Administrative Hearings cannot schedule the commencement of a hearing within 15 business days as provided by paragraph (1) of subdivision (f), and the subject person does not waive the person’s right to a hearing commencing within 15 days, the hearings may be conducted by administrative law judges appointed by the commissioner; the hearing shall be completed within 45 days of commencement, unless additional time is requested by the subject person. If the hearing is not completed within the 45 days, the order shall be deemed rescinded as if it had not been issued. The scheduling of other hearings before the administrative law judge shall not be considered good cause for purposes of this paragraph. (j) Nothing in this section is intended to or shall be construed to create a private cause of action against an offending subject person or insurer or production agency that aids and abets a subject person, based on the standards established by this section or the commissioner’s findings or orders pursuant to this section. (Amended by Stats. 2021, Ch. 133, Sec. 28. (SB 272) Effective July 23, 2021.)
  17. 1749.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13.5. Prelicensing and Continuing Education [1749 - 1749.9] ( Article 13.5 added by Stats. 1990, Ch. 1420, Sec. 65. )

    Verify source ↗

    The department must require new license applicants to meet prelicensing education standards, including specific ethics and insurance-fraud study hours, and prelicensing completion certificates expire after three years.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13.5. Prelicensing and Continuing Education [1749 - 1749.9] ( Article 13.5 added by Stats. 1990, Ch. 1420, Sec. 65. ) ## 1749. (a) The department shall require all new applicants for license to meet prelicensing education standards as follows: (1) An applicant for license as a property broker-agent, casualty broker-agent, life agent, accident and health or sickness agent, personal lines broker-agent, or limited lines automobile insurance agent shall be required to complete 12 hours of study on ethics and this code. The 12-hour ethics course shall include one hour of study on insurance fraud. If an applicant seeks a license for more than one of the following license types: property broker-agent license, casualty broker-agent license, life license, accident and health or sickness license, or personal lines broker-agent license, the applicant shall only be required to complete one 12-hour course on ethics and this code, which shall include one hour of study on insurance fraud. The curriculum for satisfying this requirement shall be approved by the curriculum board and submitted to the commissioner for final approval. (2) An applicant for a property broker-agent license, casualty broker-agent license, life agent license, accident and health or sickness license, personal lines broker-agent license, or limited lines automobile insurance agent license, who is currently licensed as a nonresident in this state shall be required to complete the 12-hour course of study on ethics and this code, as required by this section. The 12-hour ethics course shall include one hour of study on insurance fraud. (b) Review and approval of prelicensing courses not conducted in a classroom shall include an evaluation of the safeguards in place to ensure that the student completing the course is the person enrolled in the course, methods used to monitor the student’s attendance are adequate, methods for the student to interact with the entity providing the training exist, and methods used to record the times spent completing the course are adequate. (c) Prelicensing certificates of completion expire three years from the completion date of the course, whether or not a license is issued. (Amended by Stats. 2025, Ch. 566, Sec. 5. (AB 943) Effective January 1, 2026.)
  18. 1749.01.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13.5. Prelicensing and Continuing Education [1749 - 1749.9] ( Article 13.5 added by Stats. 1990, Ch. 1420, Sec. 65. )

    Verify source ↗

    Sections 1749 and 1749.3 do not apply to certain life agents, and the commissioner may require the insurer to certify the limits of those agents’ authority.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13.5. Prelicensing and Continuing Education [1749 - 1749.9] ( Article 13.5 added by Stats. 1990, Ch. 1420, Sec. 65. ) ## 1749.01. Sections 1749 and 1749.3 shall not apply to a life agent who is limited by the terms of a written agreement with the insurer, which filed on that life agent’s behalf a notice of appointment with the commissioner, to transact only specific life insurance policies or annuities that have an initial face amount of twenty thousand dollars ($20,000) or less that are designated by the purchaser for the payment of funeral and burial expenses. The commissioner may require the insurer appointing those life agents to certify as to the limitations of the agents’ representation. (Amended by Stats. 2014, Ch. 108, Sec. 2. (AB 2279) Effective January 1, 2015.)
  19. 1749.02.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13.5. Prelicensing and Continuing Education [1749 - 1749.9] ( Article 13.5 added by Stats. 1990, Ch. 1420, Sec. 65. )

    Verify source ↗

    “Twenty-four hour coverage” means a bundled workers’ compensation, disability, health care service plan, or other medical insurance product for nonoccupational injuries and illnesses, and it must not include life insurance.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13.5. Prelicensing and Continuing Education [1749 - 1749.9] ( Article 13.5 added by Stats. 1990, Ch. 1420, Sec. 65. ) ## 1749.02. “Twenty-four hour coverage” is the joint issuance of a workers’ compensation policy with a disability insurance policy, health care service plan contract, or other medical insurance coverage for nonoccupational injuries and illnesses. This product shall not include a life insurance policy. (Added by Stats. 1994, Ch. 1069, Sec. 5. Effective September 29, 1994.)
  20. 1749.1.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13.5. Prelicensing and Continuing Education [1749 - 1749.9] ( Article 13.5 added by Stats. 1990, Ch. 1420, Sec. 65. )

    Verify source ↗

    The commissioner must appoint a curriculum board, and the board must develop and submit insurance education curriculum and standards for final approval. Certain ethics and continuing education courses cannot include sales, motivational, self-improvement, or new-product training.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13.5. Prelicensing and Continuing Education [1749 - 1749.9] ( Article 13.5 added by Stats. 1990, Ch. 1420, Sec. 65. ) ## 1749.1. (a) The commissioner shall appoint a curriculum board consisting of representatives of insurance agents, brokers, and life agents trade associations, representatives of insurance companies, consumer groups, bail agents, and independent and public insurance adjusters to develop the license examination and continuing education curriculum, including a list of preapproved courses of study, including courses of study for professional designations that would satisfy the requirements of this article, subdivision (a) of Section 1810.7, and Sections 14090.1 and 15059.1. The curriculum board shall develop or recommend courses of study covering all lines of insurance to be sold under each license, including, but not limited to, any special products such as long-term care insurance, Medi-gap policies, disability insurance products, and course study on ethics and pertinent sections of this code. The curriculum board shall also develop or recommend courses of study on commercial earthquake risk management, including courses relating to understanding risk zones, options for insurance coverage to cover potential loss, mitigation strategies, and postevent recovery. The curriculum developed and the courses of study approved by the board shall be submitted to the commissioner for final approval. (b) The curriculum board shall also develop standards for providers and instructors of the 12-hour ethics course and continuing education courses, programs, and seminars, which standards shall be approved by the board and submitted to the commissioner for final approval. The curriculum board may approve standards for courses in business management practices that may consist of up to 25 percent of the agent or broker requirements for license renewal. A 12-hour ethics course or continuing education course shall not include sales training, motivational training, self-improvement training, or training offered by insurers or agents regarding new products or programs. (c) For purposes of applying subdivision (b), courses in “business management practices” shall consist of the following subject matter: (1) Accounting and financial management, including trust account maintenance, reconciliation and auditing, financial statements, business budgeting, income and expense ratios, banking and investment practices, and business perpetuation and planning. (2) Information and database management, including recordkeeping, privacy law, and other legal requirements covering the use of information. (3) Human resource management, including employee compliance supervision, recruitment, training, and licensing. (4) Customer service management, consisting of methods to improve handling of consumer inquiries and complaints. (5) Communication skills, consisting of methods to improve writing and verbal skills for communication with clients, employees, insurance carriers, claims departments, and regulators. (d) Whenever the commissioner has reasonable cause to believe, and determines after public hearing, that any approved course, program of instruction, or seminar is being conducted so as to fail to meet the commissioner’s 12-hour ethics course or continuing education curriculum, or any provider or instructor for any course, program, or seminar has failed to comply with the commissioner’s standards, the commissioner may make and serve upon the provider or instructor of that course, program, or seminar an order or orders rescinding approval for that provider, course, program, or seminar, or imposing fines and penalties on that provider, or both. The amount of any fines and penalties shall not exceed the amounts set forth in Section 1748, and shall be based on the criteria for assessing penalties specified in that section. No credit towards meeting the requirements of this article shall be granted any applicant or licensee for completion of a course, program, or seminar after the effective date of any order rescinding approval for that course, program, or seminar. The commissioner shall serve notice of hearing required by this section upon the provider or instructor of the course, program, or seminar, stating the time and place therefor, and the grounds upon which the commissioner’s order is made. The hearing shall occur not less than 30 nor more than 60 days after notice is served. (e) The commissioner may impose monetary penalties for minor instances of noncompliance with the standards established pursuant to this article, such as late course roster submissions and late course presentation schedules. The monetary penalties shall not exceed the amounts of the fees established pursuant to Section 1751.1. The commissioner shall adopt regulations to establish the monetary penalties to be levied against providers for late filings and other minor instances of noncompliance with this article and Article 6.5 (commencing with Section 2186) of Subchapter 1 of Chapter 5 of Title 10 of the California Code of Regulations. (Amended by Stats. 2025, Ch. 566, Sec. 6. (AB 943) Effective January 1, 2026.)
  21. 1749.2.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13.5. Prelicensing and Continuing Education [1749 - 1749.9] ( Article 13.5 added by Stats. 1990, Ch. 1420, Sec. 65. )

    Verify source ↗

    This section says Sections 1749.3 to 1749.6 set continuing education requirements and standards for certain licensed insurance agents, but it exempts some resident and nonresident licensees.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13.5. Prelicensing and Continuing Education [1749 - 1749.9] ( Article 13.5 added by Stats. 1990, Ch. 1420, Sec. 65. ) ## 1749.2. The purpose of Sections 1749.3 to 1749.6, inclusive, is to establish requirements and standards for continuing education programs for persons licensed as property broker-agents, casualty broker-agents, and life agents. Sections 1749.3 to 1749.6, inclusive, shall not apply to either (a) those persons holding resident licenses for any kind or kinds of insurance for which an examination is not required by the law of this state, nor shall it apply to any such limited or restricted license as the commissioner may exempt or (b) licensed nonresident agents or brokers who comply with the continuing education requirements of their state of residence. (Amended by Stats. 2011, Ch. 411, Sec. 37. (AB 1416) Effective January 1, 2012.)
  22. 1749.3.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13.5. Prelicensing and Continuing Education [1749 - 1749.9] ( Article 13.5 added by Stats. 1990, Ch. 1420, Sec. 65. )

    Verify source ↗

    Certain licensed insurance agents must complete approved continuing education hours before renewing their license, with an ethics requirement and a limited exemption for some long-serving older licensees.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13.5. Prelicensing and Continuing Education [1749 - 1749.9] ( Article 13.5 added by Stats. 1990, Ch. 1420, Sec. 65. ) ## 1749.3. An individual licensed as a life agent or an accident and health or sickness agent and also licensed as a property or casualty broker-agent, or an individual only licensed as a property or casualty broker-agent, shall complete those courses, programs of instruction, or seminars approved by the commissioner for the type of license held. Completion of specified product training required in subdivision (d) of Section 1749.33, subdivision (b) of Section 1749.8, and paragraph (4) of subdivision (a) of Section 10234.93 may result in the completion of more than the minimum of required continuing education hours. The minimum number of hours required is as follows: (a) A licensee, as specified in this section, shall satisfactorily complete 24 hours of instruction, of which three hours shall be in ethics, prior to renewal of the license. On and after March 1, 2023, the three-hour ethics course shall include one hour of study on insurance fraud. These hours of instruction may be completed at any time prior to renewal of the license. (b) An individual licensed as a property broker-agent or casualty broker-agent and as a life agent or an accident and health or sickness agent shall satisfy the requirements of this section by demonstrating completion of the courses, programs of instruction, or seminars approved by the commissioner for any of the license types listed in this section. (c) A licensee is not required to comply with the requirements of this article if the licensee submits proof satisfactory to the commissioner that the licensee has been a licensee in good standing for 30 continuous years in this state and is 70 years of age or older. This exemption does not apply to those individuals licensed for the first time on or after January 1, 2010. (Amended by Stats. 2022, Ch. 424, Sec. 15. (SB 1242) Effective January 1, 2023.)
  23. 1749.31.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13.5. Prelicensing and Continuing Education [1749 - 1749.9] ( Article 13.5 added by Stats. 1990, Ch. 1420, Sec. 65. )

    Verify source ↗

    Personal lines broker-agents must complete approved continuing education, including 24 hours per two-year license term and 3 ethics hours, with one ethics hour on insurance fraud after March 1, 2023.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13.5. Prelicensing and Continuing Education [1749 - 1749.9] ( Article 13.5 added by Stats. 1990, Ch. 1420, Sec. 65. ) ## 1749.31. (a) An individual licensed as a personal lines broker-agent shall complete required continuing education courses, programs of instruction, or seminars approved by the commissioner. The personal lines broker-agent shall complete 24 hours, of which three hours shall be in ethics, during each two-year license term as defined in subdivision (d) of Section 1625.5. On and after March 1, 2023, the three-hour ethics course shall include one hour of study on insurance fraud. (b) An individual licensed as a personal lines broker-agent and as a life agent or accident and health or sickness agent shall satisfy the requirements of this section by satisfactorily completing 24 hours of instruction prior to renewal of the license. (Amended by Stats. 2022, Ch. 424, Sec. 16. (SB 1242) Effective January 1, 2023.)
  24. 1749.32.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13.5. Prelicensing and Continuing Education [1749 - 1749.9] ( Article 13.5 added by Stats. 1990, Ch. 1420, Sec. 65. )

    Verify source ↗

    Certain licensed insurance agents must complete continuing education before renewing their licenses.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13.5. Prelicensing and Continuing Education [1749 - 1749.9] ( Article 13.5 added by Stats. 1990, Ch. 1420, Sec. 65. ) ## 1749.32. (a) An individual licensed as a limited lines automobile insurance agent shall complete required continuing education courses, programs of instruction, or seminars approved by the commissioner. The minimum number of hours required is 20 hours, of which three hours shall be in ethics, per license term prior to the renewal of the license. On and after March 1, 2023, the three-hour ethics course shall include one hour of study on insurance fraud. (b) An individual licensed as a limited automobile insurance agent and as a life agent or accident and health or sickness agent shall satisfy the requirements of this section by satisfactorily completing 24 hours of instruction prior to renewal of the license. (Amended by Stats. 2022, Ch. 424, Sec. 17. (SB 1242) Effective January 1, 2023.)
  25. 1749.33.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13.5. Prelicensing and Continuing Education [1749 - 1749.9] ( Article 13.5 added by Stats. 1990, Ch. 1420, Sec. 65. )

    Verify source ↗

    Certain insurance agent licensees must complete continuing education hours before renewing a license, and some agents need extra training before selling 24-hour care coverage.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13.5. Prelicensing and Continuing Education [1749 - 1749.9] ( Article 13.5 added by Stats. 1990, Ch. 1420, Sec. 65. ) ## 1749.33. (a) A life agent licensee shall satisfactorily complete 24 hours of instruction, of which three hours shall be in ethics, prior to renewal of the license. On and after March 1, 2023, the three-hour ethics course shall include one hour of study on insurance fraud. These hours of instruction may be completed at any time prior to renewal of the license. (b) An accident and health or sickness agent licensee shall satisfactorily complete 24 hours of instruction, of which three hours shall be in ethics, prior to renewal of the license. On and after March 1, 2023, the three-hour ethics course shall include one hour of study on insurance fraud. These hours of instruction may be completed at any time prior to renewal of the license. (c) An agent licensed as both a life agent and as an accident and health or sickness agent shall satisfactorily complete a total of 24 hours of instruction, of which three hours shall be in ethics, prior to renewal of the license. On and after March 1, 2023, the three-hour ethics course shall include one hour of study on insurance fraud. These hours of instruction may be completed at any time prior to renewal of the license. (d) Any accident and health or sickness agent who wishes to sell 24-hour care coverage, as defined in Section 1749.02, shall complete a course, program of instruction, or seminar of an approved continuing education provider on workers’ compensation and general principles of employer liability, which shall be completed by examination approved by the commissioner as part of the continuing education course, program of instruction, or seminar prior to selling this coverage. The required number of instruction hours shall be equal to but no greater than that required by the curriculum board for the continuing education requirements of a property broker-agent or a casualty broker-agent on these subjects. For resident licensees, this requirement shall count toward the licensee’s continuing education requirement, but may still result in completing more than the minimum number of continuing education hours set forth in this section. This section does not authorize an accident and health or sickness agent to satisfy the obligations set forth in this section by other than a proctored examination administered or approved by the department. (Amended by Stats. 2025, Ch. 566, Sec. 7. (AB 943) Effective January 1, 2026.)
  26. 1749.4.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13.5. Prelicensing and Continuing Education [1749 - 1749.9] ( Article 13.5 added by Stats. 1990, Ch. 1420, Sec. 65. )

    Verify source ↗

    Several named insurance education programs and approved courses count toward continuing education, with specific classroom-hour equivalencies.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13.5. Prelicensing and Continuing Education [1749 - 1749.9] ( Article 13.5 added by Stats. 1990, Ch. 1420, Sec. 65. ) ## 1749.4. The courses or programs of instruction successfully completed that shall be deemed to meet the standards for continuing educational requirements, and the number of classroom hours for which they are equivalent, are as follows: (a) Any part of the Life Underwriter Training Council Fellow (LUTCF) program totaling 30 hours for the life license and the accident and health or sickness license. (b) Any part of the Chartered Life Underwriter (CLU) curriculum totaling 30 hours for the life license and the accident and health or sickness license. (c) Any part of the Accredited Advisor in Insurance (AAI) program totaling 25 hours for the property broker-agent license or the casualty broker-agent license. (d) Any part of the Chartered Property Casualty Underwriter (CPCU) program totaling 30 hours for the property broker-agent license or the casualty broker-agent license. (e) Any part of the Certified Insurance Counselor (CIC) program totaling 25 hours for the life or accident and health or sickness agent license and the property broker-agent license or the casualty broker-agent license. (f) Any part of the Certified Employee Benefit Specialists (CEBS) program totaling 25 hours for the life license and the accident and health or sickness license. (g) Any part of the Chartered Financial Consultant (ChFC) program totaling 30 hours for the life license. (h) Any part of the Certified Financial Planner (CFP) program totaling 30 hours for the life license. (i) Any part of the Fellow, Life Management Institute (FLMI) program totaling 30 hours for the life license and the accident and health or sickness license. (j) Any part of the Health Insurance Associate (HIA) program totaling 25 hours for the accident and health or sickness license. (k) Any part of the Registered Employee Benefits Consultant (REBC) program totaling 30 hours for the accident and health or sickness license. (l) Any part of the Registered Health Underwriter (RHU) program totaling 30 hours for the accident and health or sickness license. (m) Any part of the Associate in Risk Management (ARM) program totaling 30 hours for the property broker-agent license or the casualty broker-agent license. (n) An insurance-related course approved by the curriculum board and the commissioner taught by an accredited college or university per credit hour granted totaling 15 hours. (o) A course or program of instruction or seminar developed or sponsored by an authorized insurer, recognized agents’ association, or insurance trade association, or any independent program of instruction shall, if approved by the curriculum board and the commissioner, qualify for the equivalency of the number of classroom hours assigned thereto by the curriculum board and the commissioner. (p) A correspondence course approved by the curriculum board and the commissioner shall qualify for the equivalency of the number of classroom hours assigned thereto by the commissioner. (Amended by Stats. 2020, Ch. 184, Sec. 25. (SB 1255) Effective January 1, 2021.)
  27. 1749.5.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13.5. Prelicensing and Continuing Education [1749 - 1749.9] ( Article 13.5 added by Stats. 1990, Ch. 1420, Sec. 65. )

    Verify source ↗

    This section gives classroom-hour credit rules for approved insurance education, lets excess hours carry forward, allows the commissioner to extend completion time for good cause, requires written certification, and bars approved providers from counting their own self-study courses toward their continuing education requirement.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13.5. Prelicensing and Continuing Education [1749 - 1749.9] ( Article 13.5 added by Stats. 1990, Ch. 1420, Sec. 65. ) ## 1749.5. (a) A person teaching any approved course of instruction or lecturing at any approved seminar shall qualify for the same number of classroom hours as would be granted to a person taking and successfully completing that course, seminar, or program, except that such person shall qualify for those classroom hours only once each license term for each course, seminar, or program. (b) Excess classroom hours accumulated during any one-year period may be carried forward to the next year. (c) For good cause shown, the commissioner may grant an extension of time during which the requirements imposed by this article may be completed, but that extension of time shall not exceed the period of one year. (d) Every person subject to this article shall furnish, in a form satisfactory to the commissioner, written certification as to the courses, programs, or seminars of instruction taken and successfully completed by that person. (e) Any education provider whose self-study courses have been approved by the department shall not count its own self-study courses towards its continuing education requirement for a license issued under this chapter. (Amended by Stats. 2007, Ch. 122, Sec. 1. Effective January 1, 2008.)
  28. 1749.6.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13.5. Prelicensing and Continuing Education [1749 - 1749.9] ( Article 13.5 added by Stats. 1990, Ch. 1420, Sec. 65. )

    Verify source ↗

    If a person misses the requirements in Sections 1749.3 or 1749.31 without an extension, the license is automatically terminated until compliance is shown. If disability or special circumstances prevent compliance, the commissioner must provide a way to place the license on inactive status.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13.5. Prelicensing and Continuing Education [1749 - 1749.9] ( Article 13.5 added by Stats. 1990, Ch. 1420, Sec. 65. ) ## 1749.6. A person failing to meet the requirements imposed by Section 1749.3 or 1749.31, and who has not been granted an extension of time within which to comply by the commissioner shall have that individual’s license automatically terminated until the time that the person demonstrates to the satisfaction of the commissioner that that individual has complied with all of the requirements of this article and all other laws applicable thereto. Where a person cannot perform the requirements of this article due to a disability or inactivity due to special circumstances, the commissioner shall provide a procedure for the person to place that individual’s license on inactive status until the time that the person demonstrates to the satisfaction of the commissioner that that individual has complied with or made up all of the requirements of this article for the period of disability or inactivity. (Amended by Stats. 2021, Ch. 133, Sec. 30. (SB 272) Effective July 23, 2021.)
  29. 1749.7.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13.5. Prelicensing and Continuing Education [1749 - 1749.9] ( Article 13.5 added by Stats. 1990, Ch. 1420, Sec. 65. )

    Verify source ↗

    The commissioner may adopt reasonable rules and regulations needed to administer this article, following the cited Government Code procedure.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13.5. Prelicensing and Continuing Education [1749 - 1749.9] ( Article 13.5 added by Stats. 1990, Ch. 1420, Sec. 65. ) ## 1749.7. The commissioner may, pursuant to Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, adopt reasonable rules and regulations necessary for the convenient administration of this article. (Added by Stats. 1990, Ch. 1420, Sec. 65. Operative January 1, 1992, by Sec. 77 of Ch. 1420.)
  30. 1749.8.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13.5. Prelicensing and Continuing Education [1749 - 1749.9] ( Article 13.5 added by Stats. 1990, Ch. 1420, Sec. 65. )

    Verify source ↗

    Life agents who sell annuities must complete 8 hours of training before soliciting consumers and 4 hours before each license renewal.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13.5. Prelicensing and Continuing Education [1749 - 1749.9] ( Article 13.5 added by Stats. 1990, Ch. 1420, Sec. 65. ) ## 1749.8. (a) Every life agent who sells annuities shall satisfactorily complete eight hours of training prior to soliciting individual consumers in order to sell annuities. (b) Every life agent who sells annuities shall satisfactorily complete four hours of training prior to each license renewal. Completion of the eight-hour annuity training required by subdivision (a) does not satisfy the four-hour annuity training required by this subdivision. For resident licensees, this requirement shall count toward the licensee’s continuing education requirement, but may still result in completing more than the minimum number of continuing education hours set forth in this section. (c) The training required by this section shall be approved by the commissioner and shall consist of topics related to annuities, and California law, regulations, and requirements related to annuities, prohibited sales practices, the recognition of indicators that a prospective insured may lack the short-term memory or judgment to knowingly purchase an insurance product, and fraudulent and unfair trade practices. Subject matter determined by the commissioner to be primarily intended to promote the sale or marketing of annuities shall not qualify for credit toward the training requirement. Any course or seminar that is disapproved under the provisions of this section shall be presumed invalid for credit toward the training requirement of this section unless it is approved in writing by the commissioner. (d) The training requirements set forth in this section shall not apply to nonresident agents representing an insurer that is a direct response provider. For the purposes of this section, “direct response provider” means an insurer that meets each of the following criteria: (1) The insurer does not initiate telephone contact with insureds or prospective insureds. (2) Agents of the insurer speak with insureds and prospective insureds only by telephone, and at the request of the insureds or prospective insureds. (3) Agents of the insurer are assigned to speak with insureds or prospective insureds on a random basis, when contacted. (4) Agents of the insurer are salaried and do not receive commissions for sales or referrals. (Amended by Stats. 2013, Ch. 321, Sec. 19. (AB 1391) Effective January 1, 2014.)
  31. 1749.81.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13.5. Prelicensing and Continuing Education [1749 - 1749.9] ( Article 13.5 added by Stats. 1990, Ch. 1420, Sec. 65. )

    Verify source ↗

    Life agents in specified life-insurance sales lines must complete set training hours before selling or renewing licenses, and the commissioner must approve the training.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13.5. Prelicensing and Continuing Education [1749 - 1749.9] ( Article 13.5 added by Stats. 1990, Ch. 1420, Sec. 65. ) ## 1749.81. (a) A life agent licensed on or after January 1, 2024, who sells individual life insurance policies other than term life with no cash value shall satisfactorily complete four hours of training before soliciting individual consumers to sell those life insurance policies. (b) A life agent who sells individual variable life insurance policies shall satisfactorily complete two hours of training before each license renewal. Completion of the four-hour annuity training required by Section 1749.8 does not satisfy the training required by this section. This training is in addition to, and is not a part of, the annuity training required by subdivision (b) of Section 1749.8. For resident licensees, this requirement shall count toward the licensee’s continuing education requirement, but may still result in completing more than the minimum number of continuing education hours set forth in this section. (c) The training required by this section shall be approved by the commissioner and shall consist of topics related to the types of life insurance policies described in subdivisions (a) and (b) and California law, regulations, and requirements related to those life insurance policies, prohibited sales practices, and unfair trade practices. Subject matter determined by the commissioner to be primarily intended to promote the sale or marketing of life insurance policies shall not qualify for credit toward the training requirement. Any course or seminar that is disapproved under the provisions of this section shall be presumed invalid for credit toward the training requirement of this section unless it is approved in writing by the commissioner. (d) This section shall become operative January 1, 2025, and applies to licenses that are issued or renewed on or after January 1, 2025. (Amended by Stats. 2024, Ch. 444, Sec. 3. (SB 577) Effective January 1, 2025.)
  32. 1749.85.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13.5. Prelicensing and Continuing Education [1749 - 1749.9] ( Article 13.5 added by Stats. 1990, Ch. 1420, Sec. 65. )

    Verify source ↗

    The curriculum committee must make 2006 recommendations to the commissioner, course providers must submit course content for approval, certain people are barred from estimating replacement value or explaining homeowners coverage, and appraisers must follow any later Insurance Department regulation on estimate calculations.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13.5. Prelicensing and Continuing Education [1749 - 1749.9] ( Article 13.5 added by Stats. 1990, Ch. 1420, Sec. 65. ) ## 1749.85. (a) The curriculum committee shall, in 2006, make recommendations to the commissioner to instruct property broker-agents, casualty broker-agents, and personal lines broker-agents and applicants for property broker-agent, casualty broker-agent, and personal lines broker-agent licenses in proper methods of estimating the replacement value of structures, and of explaining various levels of coverage under a homeowners’ insurance policy. Each provider of courses based upon this curriculum shall submit its course content to the commissioner for approval. (b) A person who is not an insurer underwriter or actuary or other person identified by the insurer, or a licensed property broker-agent, casualty broker-agent, personal lines broker-agent, contractor, or architect shall not estimate the replacement value of a structure, or explain various levels of coverage under a homeowners’ insurance policy. (c) This section shall not be construed to preclude licensed appraisers, contractors, and architects from estimating replacement value of a structure. (d) However, if the Department of Insurance, by adopting a regulation, establishes standards for the calculation of estimates of replacement value of a structure by appraisers, then on and after the effective date of the regulation a real estate appraiser’s estimate of replacement value shall be calculated in accordance with the regulation. (Amended by Stats. 2011, Ch. 411, Sec. 41. (AB 1416) Effective January 1, 2012.)
  33. 1749.9.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13.5. Prelicensing and Continuing Education [1749 - 1749.9] ( Article 13.5 added by Stats. 1990, Ch. 1420, Sec. 65. )

    Verify source ↗

    People exempted from licensure under Sections 1634 or 1635 are not required by this article to hold the license described in Section 1631.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 13.5. Prelicensing and Continuing Education [1749 - 1749.9] ( Article 13.5 added by Stats. 1990, Ch. 1420, Sec. 65. ) ## 1749.9. Nothing in this article shall require any person exempted from licensure by Section 1634 or 1635 to hold a license as required by Section 1631. (Added by Stats. 1991, Ch. 1040, Sec. 17.)
  34. 1750.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 14. Fees [1750 - 1751.7] ( Article 14 added by Stats. 1959, Ch. 4. )

    Verify source ↗

    The commissioner must charge advance filing fees for certain insurance license applications, renewals, and license changes.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 14. Fees [1750 - 1751.7] ( Article 14 added by Stats. 1959, Ch. 4. ) ## 1750. The commissioner shall require, in advance, as a fee for filing application for the hereinafter designated licenses, renewals thereof, or changes in outstanding licenses, an amount calculated as set forth herein. The fee is determined by multiplying the number of license years in the period of the license applied for or the remaining period of an existing license counting any initial fractional license year of that period as one year for that purpose, as follows: (a) Casualty broker-agent, eighty-five dollars ($85). (b) Property broker-agent, eighty-five dollars ($85). (c) Property and casualty broker-agent, when applied for on a single application, eighty-five dollars ($85). (d) Personal lines broker-agent, resident, eighty-five dollars ($85). (e) Life agent, resident, eighty-five dollars ($85). (f) Life agent, nonresident, eighty-five dollars ($85). (g) Surplus line broker who is an individual transacting only on behalf of a surplus line broker organization, two hundred fifty dollars ($250). (h) Surplus line broker not described in subdivision (g), five hundred dollars ($500). (i) Variable life and variable annuity authority, nonresident, when not also applying for a nonresident life agent license, eighty-five dollars ($85). (Amended by Stats. 2020, Ch. 184, Sec. 26. (SB 1255) Effective January 1, 2021.)
  35. 1750.5.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 14. Fees [1750 - 1751.7] ( Article 14 added by Stats. 1959, Ch. 4. )

    Verify source ↗

    Nonresident license filing and renewal fees must match the comparable resident license fee, with a reciprocal higher fee allowed in some cases.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 14. Fees [1750 - 1751.7] ( Article 14 added by Stats. 1959, Ch. 4. ) ## 1750.5. (a) The fee for filing an application for a nonresident license described in Section 1639, and renewal thereof or changes in outstanding licenses, shall be the same amount that is established in this code for a resident license of the same type. If the applicant’s state, territory of the United States, commonwealth, or Canadian province of residence has fees for any nonresident insurance license greater than for a like resident license, the commissioner may charge a fee equal to the amount a California resident would be required to pay to obtain a like license for a like term in the applicant’s state, territory of the United States, commonwealth, or Canadian province of residence. (b) The fee for filing an application for a nonresident limited lines license described in Section 1639, and renewal thereof or changes in outstanding licenses, shall be the same amount that is established in this code for a resident property broker-agent license or a resident casualty broker-agent license. This section shall not be construed to require a countersignature on a policy or contract, or the payment of a countersignature fee. (Amended by Stats. 2011, Ch. 411, Sec. 43. (AB 1416) Effective January 1, 2012.)
  36. 1751.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 14. Fees [1750 - 1751.7] ( Article 14 added by Stats. 1959, Ch. 4. )

    Verify source ↗

    The commissioner must charge advance filing fees for the listed insurance-related documents.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 14. Fees [1750 - 1751.7] ( Article 14 added by Stats. 1959, Ch. 4. ) ## 1751. The commissioner shall require, in advance, a fee for filing the following documents: (a) Application for registration of change in membership of a copartnership licensed as any of the following: (1) Casualty broker-agent, eighty-five dollars ($85). (2) Property broker-agent, eighty-five dollars ($85). (3) Property and casualty broker-agent, when applied for on a single application, eighty-five dollars ($85). (4) Life agent, resident, eighty-five dollars ($85). (5) Life agent, nonresident, eighty-five dollars ($85). (6) Personal lines broker-agent, eighty-five dollars ($85). (b) Notice for adding or removing from any life agent’s, property broker-agent’s, casualty broker-agent’s, or personal lines broker-agent’s license issued to an organization the name of any natural person named thereon, twenty-nine dollars ($29). (c) First amendment to an application, fourteen dollars ($14); a second and each subsequent amendment to an application, twenty-nine dollars ($29). (d) Original application to be given the qualifying examination for a license of a property, casualty, or personal lines licensee, fifty dollars ($50) for each person to be examined. (e) Original application to be given the qualifying examination for a license of a life licensee, fifty dollars ($50) for each person to be examined. (f) Application for reexamination for any of the licenses mentioned in this section, fifty dollars ($50) for each person to be reexamined. (g) Application that includes a request for a certificate of convenience pursuant to Article 8 (commencing with Section 1685), thirty-five dollars ($35) in addition to, and not in lieu of, fees otherwise required. (h) Application or request for approval of a true or fictitious name pursuant to Section 1724.5, fifty-three dollars ($53), except that there shall be no fee when the name is contained in an original application. (i) “A ratification of appointments of agents” whereby the surviving insurer in a merger or consolidation assumes responsibility for all agents then lawfully appointed for one of the constituent insurers and makes each its agent, one hundred eighty-five dollars ($185). (j) A bond, pursuant to Article 5 (commencing with Section 1662) or Section 1760.5 or 1765, except when the bond constitutes part of an original application filing, twenty-nine dollars ($29). (k) An application or request for clearance and cancellation notice of a current licensee of record, twenty-nine dollars ($29). (l) An amended action notice pursuant to subdivision (e) of Section 1704, eleven dollars ($11). (Amended by Stats. 2017, Ch. 534, Sec. 36. (AB 1699) Effective January 1, 2018.)
  37. 1751.1.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 14. Fees [1750 - 1751.7] ( Article 14 added by Stats. 1959, Ch. 4. )

    Verify source ↗

    The commissioner must charge set advance fees for certain certification and renewal applications for ethics and continuing education courses.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 14. Fees [1750 - 1751.7] ( Article 14 added by Stats. 1959, Ch. 4. ) ## 1751.1. (a) The commissioner shall require seventy-five dollars ($75), in advance, as a fee for filing an application for certification as a 12-hour ethics course or continuing education provider pursuant to Section 1749.1. That certification shall be effective for a period of 24 months. (b) The commissioner shall require seventy-five dollars ($75), in advance, as a fee for filing an application to renew certification as a 12-hour ethics course or continuing education provider pursuant to Section 1749.1. That certification shall be effective for a period of 24 months. (c) The commissioner shall require seventy-five dollars ($75), in advance, as a fee for filing an application for certification of a 12-hour ethics course pursuant to Section 1749. That certification shall be effective for a period of 24 months. (d) The commissioner shall require thirty-seven dollars ($37), in advance, as a fee for filing an application to renew certification of a 12-hour ethics course pursuant to Section 1749. That certification shall be effective for a period of 24 months. (e) The commissioner shall require thirty-seven dollars ($37), in advance, as a fee for filing an application for certification of a continuing education course, program, or seminar pursuant to Section 1749.3 and Section 1749.32. That certification shall be effective for a period of 24 months. (f) The commissioner shall require fourteen dollars ($14), in advance, as a fee for filing an application to renew certification of a continuing education course, program, or seminar pursuant to Section 1749.3 and Section 1749.32. That certification shall be effective for a period of 24 months. (Amended by Stats. 2025, Ch. 566, Sec. 8. (AB 943) Effective January 1, 2026.)
  38. 1751.3.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 14. Fees [1750 - 1751.7] ( Article 14 added by Stats. 1959, Ch. 4. )

    Verify source ↗

    The commissioner must charge a $29 fee in advance for filing each notice of appointment or termination under Section 1707 for the listed insurance agency or solicitor categories.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 14. Fees [1750 - 1751.7] ( Article 14 added by Stats. 1959, Ch. 4. ) ## 1751.3. The commissioner shall require twenty-nine dollars ($29), in advance, as a fee for filing each notice of appointment or each notice of termination pursuant to Section 1707 of any of the following: (a) A casualty broker-agent to act as an insurance agent. (b) A property broker-agent to act as an insurance agent. (c) A life agent. (d) A travel insurance agent. (e) A casualty broker-agent to act as an insurance solicitor. (f) A property broker-agent to act as an insurance solicitor. (Amended by Stats. 2017, Ch. 534, Sec. 38. (AB 1699) Effective January 1, 2018.)
  39. 1751.5.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 14. Fees [1750 - 1751.7] ( Article 14 added by Stats. 1959, Ch. 4. )

    Verify source ↗

    Certain fees listed in this section and related chapters are filing fees, and none of them may be refunded.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 14. Fees [1750 - 1751.7] ( Article 14 added by Stats. 1959, Ch. 4. ) ## 1751.5. The fees required by this chapter and by Chapter 6 (commencing with Section 1760), Chapter 7 (commencing with Section 1800), and Chapter 8 (commencing with Section 1831) of this part, and by Chapter 2 (commencing with Section 15000) of Division 5 are filing fees, no portion of which shall be refunded whether or not the application is acted upon or the examination is taken. (Amended by Stats. 2016, Ch. 833, Sec. 3. (SB 488) Effective January 1, 2017.)
  40. 1751.6.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 14. Fees [1750 - 1751.7] ( Article 14 added by Stats. 1959, Ch. 4. )

    Verify source ↗

    The commissioner may prepare a list of currently licensed producers, but the requester generally must pay the list costs and fees.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 14. Fees [1750 - 1751.7] ( Article 14 added by Stats. 1959, Ch. 4. ) ## 1751.6. (a) The commissioner may prepare a list of all currently licensed producers. All those lists shall be at the expense of the insurer, organization, or person requesting this service, except that special lists that are a part of the regulatory responsibility of the department may be at the expense of the state in the discretion of the commissioner. The costs and expenses of all those lists shall be paid from the support appropriation for the department current at the time of the preparation of the list but shall be charged to, and collected from, the insurer, organization, or person requesting the list. All list preparation expense moneys collected by the department under this section are hereby appropriated to the department and shall be deposited in the Insurance Fund to the credit of the support appropriation for the department current at the time of the deposit. If any insurer, organization, or person refuses to pay those costs and expenses promptly when due, the commissioner may refuse to issue its certificate of authority, certificate of exemption, or license, as the case may be, and may revoke any existing certificate of authority, certificate of exemption, or license. (b) The fees for producers licensed in this state are as follows: (1) Resident insurance producer (individual), three thousand sixty dollars ($3,060). (2) Resident property and casualty broker-agent (individual), eight hundred thirty-three dollars ($833). (3) Resident life agent (individual), one thousand five hundred twenty-six dollars ($1,526). (4) Resident insurance producer (agency), one hundred forty-seven dollars ($147). (5) Nonresident insurance producer (individual), eight hundred ninety-five dollars ($895). (6) Nonresident property and casualty broker-agent (individual), two hundred twelve dollars ($212). (7) Nonresident life agent (individual), four hundred twenty-four dollars ($424). (8) Nonresident insurance producer (agency), eighty-eight dollars ($88). (9) Bail (individual), eighty-eight dollars ($88). (10) Bail (agency), eighty-eight dollars ($88). (11) Resident estate certificate of convenience, eighty-eight dollars ($88). (12) Interim public insurance adjuster, eighty-eight dollars ($88). (13) Resident adjuster (individual), eighty-eight dollars ($88). (14) Reinsurance intermediary broker, eighty-eight dollars ($88). (15) Reinsurance intermediary manager, eighty-eight dollars ($88). (16) Resident adjuster (agency), eighty-eight dollars ($88). (17) Nonresident adjuster (agency), eighty-eight dollars ($88). (18) Resident personal lines broker-agent (individual), eighty-eight dollars ($88). (19) Resident personal lines broker-agent (agency), eighty-eight dollars ($88). (20) Nonresident personal lines broker-agent (individual), eighty-eight dollars ($88). (21) Nonresident personal lines broker-agent (agency), eighty-eight dollars ($88). (22) Resident credit insurance agent (individual), eighty-eight dollars ($88). (23) Resident credit insurance agent (agency), eighty-eight dollars ($88). (24) Nonresident credit insurance agent (individual), eighty-eight dollars ($88). (25) Nonresident credit insurance agent (agency), eighty-eight dollars ($88). (26) All (no restrictions on license type), four thousand fifteen dollars ($4,015). (27) Partial listing, eight hundred thirty-nine dollars ($839), plus one cent ($0.01) per name. (Amended by Stats. 2017, Ch. 534, Sec. 39. (AB 1699) Effective January 1, 2018.)
  41. 1751.7.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 14. Fees [1750 - 1751.7] ( Article 14 added by Stats. 1959, Ch. 4. )

    Verify source ↗

    The commissioner may publish a newsletter, and its publication costs must be paid from license fees. Those fees must be reviewed annually and adjusted as needed, with the amount shown as a separate budget line item.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 14. Fees [1750 - 1751.7] ( Article 14 added by Stats. 1959, Ch. 4. ) ## 1751.7. The commissioner may periodically publish a newsletter containing summaries of rules, regulations, interpretative opinions, and other information as the commissioner deems important to the proper conduct of the insurance business in this state by persons and organizations licensed under this chapter. All costs of the publication shall be covered by and included in license fees paid by persons licensed under this chapter. The fees shall be reviewed annually for sufficiency for this purpose, and shall be increased or decreased as necessary. The amount of the fees to be utilized for this purpose shall be set forth as a separate line item in the department’s annual budget. (Amended by Stats. 2021, Ch. 133, Sec. 31. (SB 272) Effective July 23, 2021.)
  42. 1752.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 15. Travel Insurance Agents [1752 - 1757] ( Article 15 added by Stats. 1959, Ch. 4. )

    Verify source ↗

    The commissioner may issue a limited lines travel insurance agent license to certain organizations that sell travel insurance through travel retailers and do not otherwise meet Section 1754’s conditions.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 15. Travel Insurance Agents [1752 - 1757] ( Article 15 added by Stats. 1959, Ch. 4. ) ## 1752. The commissioner may issue a limited lines travel insurance agent license to any organization engaged in transacting travel insurance through travel retailers not otherwise meeting the conditions set forth in Section 1754. (Amended by Stats. 2012, Ch. 257, Sec. 1. (AB 2354) Effective January 1, 2013.)
  43. 1753.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 15. Travel Insurance Agents [1752 - 1757] ( Article 15 added by Stats. 1959, Ch. 4. )

    Verify source ↗

    This section defines key terms used in the travel insurance article, including limited lines travel insurance agent, transact, travel insurance, and travel retailer.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 15. Travel Insurance Agents [1752 - 1757] ( Article 15 added by Stats. 1959, Ch. 4. ) ## 1753. As used in this article, the following terms have the following meanings: (a) “Limited lines travel insurance agent” means an insurer designee that is licensed to transact travel insurance, as defined in subdivision (b). (b) “Transact” means, for the purposes of this article, the following activities when engaged in by a travel retailer: (1) Offering and disseminating information to a prospective or current policyholder on behalf of a limited lines travel insurance agent, including brochures, buyer guides, descriptions of coverage, and price. (2) Referring specific questions regarding coverage features and benefits from a prospective or current policyholder to a limited lines travel insurance agent. (3) Disseminating and processing applications for coverage, coverage selection forms, or other similar forms in response to a request from a prospective or current policyholder. (4) Collecting premiums from a prospective or current policyholder on behalf of a limited lines travel insurance agent. (5) Receiving and recording information from a policyholder to share with a limited lines travel insurance agent. (c) (1) “Travel insurance” means insurance coverage for personal risks incidental to planned travel, including one or more of the following: (A) Interruption or cancellation of a trip or event. (B) Loss of baggage or personal effects. (C) Damages to accommodations or rental vehicles. (D) Sickness, accident, disability, or death occurring during travel. (2) Travel insurance does not include major medical plans, which provide comprehensive medical protection for travelers with trips lasting six months or longer, including, for example, those working overseas as an expatriate or military personnel being deployed. (3) Travel insurance does not include damage waiver contracts, as defined in subdivision (g) of Section 1939.01 of the Civil Code. The phrase “damage waiver” or “collision damage waiver” cannot be used to describe travel insurance coverage, but the insurance contract may otherwise refer to “damage waiver” or “collision damage waiver” provided by a rental company, as defined in subdivision (a) of Section 1939.01 of the Civil Code. (d) “Travel retailer” means a business organization that makes, arranges, or offers travel services and may offer and disseminate travel insurance as a service to its customers on behalf of and under the direction of a limited lines travel insurance agent. (Amended by Stats. 2018, Ch. 231, Sec. 12. (AB 2045) Effective January 1, 2019.)
  44. 1754.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 15. Travel Insurance Agents [1752 - 1757] ( Article 15 added by Stats. 1959, Ch. 4. )

    Verify source ↗

    This section lets a limited lines travel insurance agent use travel retailers, but only if the agent follows detailed licensing, disclosure, training, register, and compliance rules.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 15. Travel Insurance Agents [1752 - 1757] ( Article 15 added by Stats. 1959, Ch. 4. ) ## 1754. Transaction of travel insurance under the license of an organization holding a limited lines travel insurance agent license shall be subject to the following conditions: (a) A limited lines travel insurance agent may authorize a travel retailer to transact travel insurance on behalf of and under its authority under the following conditions: (1) The limited lines travel insurance agent is clearly identified on marketing materials and fulfillment packages distributed by the travel retailers to customers. The marketing materials and fulfillment packages shall include the agent’s name, business address, email address, telephone number, license number, and the availability of the department’s toll-free consumer hotline. (2) The limited lines travel insurance agent, at the time of licensure and thereafter, maintains a register noting each travel retailer that transacts travel insurance on the licensee’s behalf. The register shall be maintained and updated annually by the licensee in a form prescribed by, or format acceptable to, the commissioner and shall include the name and contact information of the travel retailer and an officer or person who directs or controls the travel retailer’s operations, and the travel retailer’s federal employer identification number (FEIN). The licensee shall also certify that the registered travel retailer complies with Section 1033 of Title 18 of the United States Code. The licensee shall submit the register for review and inspection upon request by the department. (3) The limited lines travel insurance agent has designated one of its employees to be responsible for its compliance with the insurance laws, rules, and regulations of the state. The limited lines travel insurance agent and its designated responsible employees shall hold property, casualty, life, and accident and health or sickness agent licenses, to the extent required by this chapter, based upon the types of insurance transacted by the licensee. (4) The employee designated by the limited lines travel insurance agent, pursuant to paragraph (3), and any of the organization’s partners, members, controlling persons, officers, directors, and managers comply with the background check requirements as required by the commissioner. (5) The limited lines travel insurance agent has paid all applicable licensing fees required under California law. (6) The limited lines travel insurance agent uses all reasonable means at its disposal to ensure compliance by the travel retailer and the travel retailer’s employees with their obligations under this article. This includes requiring each employee of the travel retailer whose duties include transacting travel insurance to receive training. The training shall be provided whenever there is a material change that requires a modification to the training materials, but in no event less frequently than every three years. Training materials used by or on behalf of the limited lines travel insurance agent to train the employees of a travel retailer shall be submitted to the department at the time the travel insurance agent applies for a license under this article, and whenever modified thereafter. The training materials, at a minimum, should contain instruction on the types of insurance offered, ethical sales practices, and disclosures to prospective insurance customers. Any changes to previously submitted training materials shall be submitted to the department with the changes highlighted 30 days prior to their use by the limited lines travel insurance agent. Training materials and changes to those materials submitted to the department pursuant to this subdivision shall be deemed approved for use by the limited lines travel insurance agent unless it is notified by the department to the contrary. Failure by a limited lines travel insurance agent to submit training materials or changes for departmental review or use of unapproved or disapproved training materials shall constitute grounds for denial of an application for a license, nonrenewal of a license, or suspension of a license, or other action as deemed appropriate by the commissioner. (7) The limited lines travel insurance agent or the travel retailer provides disclosure to the consumer, in either the marketing materials or fulfillment packages, that is substantively similar to the following: This plan provides insurance coverage that only applies during the covered trip. You may have coverage from other sources that provides you with similar benefits but may be subject to different restrictions depending upon your other coverages. You may wish to compare the terms of this policy with your existing life, health, home, and automobile insurance policies. If you have any questions about your current coverage, call your insurer or insurance agent or broker. (8) The limited lines travel insurance agent or the travel retailer makes all of the following disclosures to the prospective insured, which shall be acknowledged in writing by the purchaser or displayed by clear and conspicuous signs that are posted at every location where contracts are executed, including, but not limited to, the counter where the purchaser signs the service agreement, or provided in writing to the purchaser: (A) That purchasing travel insurance is not required in order to purchase any other product or service offered by the travel retailer. (B) If not individually licensed, that the travel retailer’s employee is not qualified or authorized to: (i) Answer technical questions about the benefits, exclusions, and conditions of any of the insurance offered by the travel retailer. (ii) Evaluate the adequacy of the prospective insured’s existing insurance coverage. (b) A travel retailer that meets the requirements set forth in this section and whose activities are limited to offering and selling travel insurance on behalf of a licensed limited lines travel insurance agent is authorized to receive compensation. (c) (1) If the commissioner determines that a travel retailer, or a travel retailer’s employee, has violated any provision of this article or any other provision of this code, the commissioner may: (A) Direct the limited lines travel insurance agent to implement a corrective action plan with the travel retailer. (B) Direct the limited lines travel insurance agent to revoke the authorization of the travel retailer to transact travel insurance on its behalf and under its license and to remove the travel retailer’s name from its register. (2) If the commissioner determines that a travel retailer, or a travel retailer’s employee, has violated any provision in this article or any other provision of this code, the commissioner, after notice and hearing, may: (A) Suspend or revoke the license of the limited lines travel insurance agent as authorized under this code. (B) Impose a monetary fine on the limited lines travel insurance agent. (3) A limited lines travel insurance agent who aids and abets a travel retailer in the transaction of travel insurance, as defined in this code, or aids and abets a travel retailer in any activity concerning travel insurance after being directed to revoke the travel retailer’s authorization, in addition to any other action authorized under this code, shall be subject to a monetary penalty pursuant to paragraph (3) of subdivision (a) of Section 12921.8. (d) The conduct of employees of the travel retailer who have been designated to transact travel insurance on behalf of the licensed limited lines travel insurance agent shall be deemed the conduct of the licensed limited lines travel insurance agent for purposes of this article. (Amended by Stats. 2020, Ch. 184, Sec. 27. (SB 1255) Effective January 1, 2021.)
  45. 1755.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 15. Travel Insurance Agents [1752 - 1757] ( Article 15 added by Stats. 1959, Ch. 4. )

    Verify source ↗

    Applicants for a limited lines travel insurance agent license must submit specified documents and fees to the commissioner, and licensed persons or organizations must pay enforcement action costs.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 15. Travel Insurance Agents [1752 - 1757] ( Article 15 added by Stats. 1959, Ch. 4. ) ## 1755. (a) An applicant for a limited lines travel insurance agent license under this article shall submit the following documents to the commissioner: (1) A written application for licensure, signed by the applicant or an officer of the applicant, in the form prescribed by the commissioner. (2) A certificate by the insurer that is to be named in the limited lines travel insurance agent license, stating that the insurer has satisfied itself that the named applicant is trustworthy and competent to act as its limited lines travel insurance agent and that the insurer will appoint the applicant to act as its agent if the travel insurance agent license applied for is issued by the commissioner. The certification shall be subscribed by an officer or managing agent of the insurer on a form prescribed by the commissioner. (3) An application fee, and, for each license period thereafter, a renewal fee of two thousand sixty-four dollars ($2,064). (b) Notwithstanding any other law to the contrary, the provisions set forth in Sections 1667, 1668, 1668.5, 1669, 1670, 1738, and 1739 apply to any application for or issuance of a license pursuant to this article. (c) Costs associated with any enforcement action shall be paid for by the person or organization licensed pursuant to this article. (Amended by Stats. 2017, Ch. 534, Sec. 40. (AB 1699) Effective January 1, 2018.)
  46. 1756.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 15. Travel Insurance Agents [1752 - 1757] ( Article 15 added by Stats. 1959, Ch. 4. )

    Verify source ↗

    Chapter rules on appointing and ending an insurance agent relationship apply to licenses issued under this article.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 15. Travel Insurance Agents [1752 - 1757] ( Article 15 added by Stats. 1959, Ch. 4. ) ## 1756. The provisions of this chapter relating to the appointment and termination of an insurance agent by an insurer or its authorized representative are applicable to licenses issued pursuant to this article. (Added by Stats. 1959, Ch. 4.)
  47. 1757.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 15. Travel Insurance Agents [1752 - 1757] ( Article 15 added by Stats. 1959, Ch. 4. )

    Verify source ↗

    The commissioner may adopt rules and regulations to implement this article.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 15. Travel Insurance Agents [1752 - 1757] ( Article 15 added by Stats. 1959, Ch. 4. ) ## 1757. The commissioner may adopt rules and regulations for the implementation of this article. (Amended by Stats. 2012, Ch. 257, Sec. 7. (AB 2354) Effective January 1, 2013.)
  48. 1757.1.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 15.5. Cargo Shippers’ Agents [1757.1 - 1757.3] ( Article 15.5 added by Stats. 1993, Ch. 515, Sec. 2. )

    Verify source ↗

    A limited license may be issued to certain agents of cargo owners or shippers, and it only allows cargo-insurance work tied to arranging the carriage of goods.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 15.5. Cargo Shippers’ Agents [1757.1 - 1757.3] ( Article 15.5 added by Stats. 1993, Ch. 515, Sec. 2. ) ## 1757.1. A limited license may be issued to a natural person or to an organization who or which acts as an agent on behalf of a cargo owner, a cargo shipper, or both. The limited license shall authorize the agent of the cargo owner, cargo shipper, or both to procure cargo insurance only on behalf of a cargo owner or shipper for whom the agent is also arranging for the carriage of goods. The limited license shall authorize the agent acting on behalf of the cargo owner, cargo shipper, or both, only to procure cargo insurance, perform related document preparation, and assist the cargo owners or shippers, or both, with the filing of claims or preparation of proofs of loss in connection with filing claims and performing similar claims activities. (Amended by Stats. 2025, Ch. 558, Sec. 13. (AB 487) Effective January 1, 2026.)
  49. 1757.2.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 15.5. Cargo Shippers’ Agents [1757.1 - 1757.3] ( Article 15.5 added by Stats. 1993, Ch. 515, Sec. 2. )

    Verify source ↗

    A limited cargo shipper’s license must be applied for and renewed like other broker-agent licenses, but the applicant does not have to pass a qualifying exam or meet continuing education requirements. The application filing fee is $29 for each year or part of a year of the license term.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 15.5. Cargo Shippers’ Agents [1757.1 - 1757.3] ( Article 15.5 added by Stats. 1993, Ch. 515, Sec. 2. ) ## 1757.2. A limited cargo shipper’s license shall be applied for and renewed in the same manner as is provided in this chapter for a licensee to act as a property broker-agent or a casualty broker-agent, except that an applicant for a limited license as a cargo shipper’s agent need not pass a qualifying examination and is exempt from the continuing education requirements. The fee for filing an application shall be twenty-nine dollars ($29) for each year or fraction thereof of the term of the license applied for. (Amended by Stats. 2025, Ch. 566, Sec. 9.5. (AB 943) Effective January 1, 2026.)
  50. 1757.3.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 15.5. Cargo Shippers’ Agents [1757.1 - 1757.3] ( Article 15.5 added by Stats. 1993, Ch. 515, Sec. 2. )

    Verify source ↗

    The commissioner may make reasonable rules and regulations for administering this article, including licensing and renewal of licenses for cargo shippers’ agents.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 15.5. Cargo Shippers’ Agents [1757.1 - 1757.3] ( Article 15.5 added by Stats. 1993, Ch. 515, Sec. 2. ) ## 1757.3. The commissioner may make reasonable rules and regulations necessary for the convenient administration of the provisions of this article respecting the licensing and renewal of licenses of cargo shippers’ agents. (Added by Stats. 1993, Ch. 515, Sec. 2. Effective January 1, 1994.)
  51. 1758.1.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16. Variable Contract Agents [1758.1 - 1758.5] ( Heading of Article 16 amended by Stats. 1973, Ch. 332. )

    Verify source ↗

    The commissioner may authorize certain people to transact variable life and variable annuity business, and no one may act as the insurer’s agent in those transactions without valid authority.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16. Variable Contract Agents [1758.1 - 1758.5] ( Heading of Article 16 amended by Stats. 1973, Ch. 332. ) ## 1758.1. (a) For the purpose of making provision for the issuance of policies or contracts authorized by Article 5 (commencing with Section 10506) of Chapter 5 of Part 2 of Division 2, the commissioner may grant authority to transact variable life and variable annuity to a person or a natural person named on a license of an organization licensed as a life agent that is appointed by an admitted insurer that is required to register itself or to register a separate account or fund with the United States Securities and Exchange Commission under the Federal Investment Company Act of 1940, or to register its variable policies or contracts with the Securities and Exchange Commission under the Federal Securities Act of 1933, and has complied with that requirement. The commissioner may grant variable life and variable annuity authority to a person who is not a resident of California and is not a licensed life agent in California provided that the person is licensed for both life and variable annuity authority in the resident state. (b) A person shall not act as an agent of the insurer in the transaction of the policies or contracts unless the person holds a valid authority under this article. (Amended by Stats. 2020, Ch. 184, Sec. 28. (SB 1255) Effective January 1, 2021.)
  52. 1758.2.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16. Variable Contract Agents [1758.1 - 1758.5] ( Heading of Article 16 amended by Stats. 1973, Ch. 332. )

    Verify source ↗

    Authority under this article is effective only while the underlying life agent license and required registration remain in force.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16. Variable Contract Agents [1758.1 - 1758.5] ( Heading of Article 16 amended by Stats. 1973, Ch. 332. ) ## 1758.2. Any authority granted pursuant to the provisions of this article shall be effective only while a permanent underlying life agent’s license and registration in accordance with the rules of the United States Securities and Exchange Commission or the Financial Industry Regulatory Authority remains in full force and effect. The provisions of subdivision (b) of Section 1704 relating to the inactivation and reactivation of the underlying life agent’s license, and the renewal thereof, shall apply to any authority issued pursuant to this article, except that references to agency appointments and terminations shall relate only to the underlying life agent’s license. The authority may be revoked, suspended, or otherwise affected for the same reasons and by the same procedures as a life agent’s license. (Amended by Stats. 2011, Ch. 411, Sec. 48. (AB 1416) Effective January 1, 2012.)
  53. 1758.3.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16. Variable Contract Agents [1758.1 - 1758.5] ( Heading of Article 16 amended by Stats. 1973, Ch. 332. )

    Verify source ↗

    The commissioner may not authorize variable life or variable annuity business unless the life agent or applicant proves California securities registration. Any granted authority ends immediately if the life agent loses that registration.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16. Variable Contract Agents [1758.1 - 1758.5] ( Heading of Article 16 amended by Stats. 1973, Ch. 332. ) ## 1758.3. The commissioner shall not grant authority to transact variable life and variable annuity unless the life agent or applicant furnishes proof that the person is registered to sell securities in California in accordance with the rules of the United States Securities and Exchange Commission or the Financial Industry Regulatory Authority. Any authority granted to a life agent to transact variable life and variable annuity shall immediately terminate upon the life agent no longer being registered to sell securities in accordance with the rules of the United States Securities and Exchange Commission or the Financial Industry Regulatory Authority. (Amended by Stats. 2020, Ch. 184, Sec. 29. (SB 1255) Effective January 1, 2021.)
  54. 1758.5.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16. Variable Contract Agents [1758.1 - 1758.5] ( Heading of Article 16 amended by Stats. 1973, Ch. 332. )

    Verify source ↗

    The commissioner may adopt reasonable rules and regulations to administer this article.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16. Variable Contract Agents [1758.1 - 1758.5] ( Heading of Article 16 amended by Stats. 1973, Ch. 332. ) ## 1758.5. The commissioner may, pursuant to Chapter 4.5 (commencing with Section 11371), Part 1, Division 3, Title 2 of the Government Code, adopt reasonable rules and regulations necessary for the convenient administration of this article. (Added by Stats. 1967, Ch. 1707.)
  55. 1758.6.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.1. Portable Electronics Insurance [1758.6 - 1758.693] ( Heading of Article 16.1 amended by Stats. 2011, Ch. 426, Sec. 6. )

    Verify source ↗

    A portable electronics vendor may not sell portable electronics insurance in this state unless the person is properly licensed or has complied with the article and received a commissioner-issued license.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.1. Portable Electronics Insurance [1758.6 - 1758.693] ( Heading of Article 16.1 amended by Stats. 2011, Ch. 426, Sec. 6. ) ## 1758.6. No portable electronics vendor shall offer or sell any form of portable electronics insurance in this state unless that person is licensed as an insurance agent or broker pursuant to Article 3 (commencing with Section 1631) or has complied with the requirements of this article and has been issued a license by the commissioner as provided in this article. (Amended by Stats. 2011, Ch. 165, Sec. 1. (AB 690) Effective January 1, 2012. Note: See conditions in Section 1758.693 regarding the initial operative date of Article 16.1, commencing with Section 1758.6.)
  56. 1758.61.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.1. Portable Electronics Insurance [1758.6 - 1758.693] ( Heading of Article 16.1 amended by Stats. 2011, Ch. 426, Sec. 6. )

    Verify source ↗

    The commissioner may issue a portable electronics insurance agent license to a compliant applicant.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.1. Portable Electronics Insurance [1758.6 - 1758.693] ( Heading of Article 16.1 amended by Stats. 2011, Ch. 426, Sec. 6. ) ## 1758.61. The commissioner may issue to an applicant that has complied with the requirements of this article a portable electronics insurance agent license that authorizes the licensee and its endorsees to offer or sell insurance in connection with, and incidental to, the sale of portable electronics or the sale or provision of accessories or services related to the use of portable electronics. (Amended by Stats. 2011, Ch. 165, Sec. 2. (AB 690) Effective January 1, 2012. Note: See conditions in Section 1758.693 regarding the initial operative date of Article 16.1, commencing with Section 1758.6.)
  57. 1758.62.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.1. Portable Electronics Insurance [1758.6 - 1758.693] ( Heading of Article 16.1 amended by Stats. 2011, Ch. 426, Sec. 6. )

    Verify source ↗

    An applicant for a portable electronics insurance agent license must file the required application materials with the commissioner and pay the required fees.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.1. Portable Electronics Insurance [1758.6 - 1758.693] ( Heading of Article 16.1 amended by Stats. 2011, Ch. 426, Sec. 6. ) ## 1758.62. (a) An applicant for a portable electronics insurance agent license under this article shall submit all of the following to the commissioner: (1) A written application for licensure, signed by the applicant or an officer of the applicant, in the form prescribed by the commissioner. (2) A certificate by the insurer that is to be named in the portable electronics insurance agent license, stating that the insurer has satisfied itself that the named applicant is trustworthy and competent to act as its insurance agent limited to this purpose and that the insurer will appoint the applicant to act as its agent to transact the kind or kinds of insurance that are permitted by this article, if the portable electronics insurance agent license applied for is issued by the commissioner. The certification shall be subscribed by an officer or managing agent of the insurer on a form prescribed by the commissioner. (3) An application fee, and, for each license period thereafter, a renewal fee, of two hundred ninety-two dollars ($292). (b) Notwithstanding any other law to the contrary, the provisions set forth in Sections 1667, 1668, 1668.5, 1669, 1670, 1738, and 1739 apply to any application for or issuance of a license pursuant to this article. (c) Costs associated with any enforcement action or investigation shall be paid for by the person or organization licensed pursuant to this article. (Amended by Stats. 2017, Ch. 534, Sec. 42. (AB 1699) Effective January 1, 2018.)
  58. 1758.63.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.1. Portable Electronics Insurance [1758.6 - 1758.693] ( Heading of Article 16.1 amended by Stats. 2011, Ch. 426, Sec. 6. )

    Verify source ↗

    A licensed portable electronics vendor may let an endorsee sell or offer insurance products only if the stated conditions are met.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.1. Portable Electronics Insurance [1758.6 - 1758.693] ( Heading of Article 16.1 amended by Stats. 2011, Ch. 426, Sec. 6. ) ## 1758.63. An endorsee of a portable electronics vendor that has been issued a portable electronics insurance agent license pursuant to this article may sell or offer insurance products under the authority of the vendor’s portable electronics insurance agent license if all of the following conditions have been met: (a) The endorsee is 18 years of age or older. (b) The portable electronics vendor, at the time it submits its portable electronics insurance agent’s license application pursuant to Section 1758.62, also establishes a list of all locations in this state at which it offers coverage under a policy of portable electronics insurance. The list shall be maintained by the portable electronics vendor in a form prescribed by, or format acceptable to, the commissioner and shall be updated annually. The list shall be maintained by the portable electronics vendor and made available to the commissioner for review and inspection upon request. (c) Each portable electronics vendor licensed pursuant to this article shall provide for the training of its endorsees under a program developed by a licensed property and casualty broker or agent prior to allowing its endorsees to offer or sell insurance products. The training shall meet the following minimum standards: (1) Each endorsee shall receive instruction about the types of insurance specified in subdivision (e) of Section 1758.69 that are offered for sale to prospective customers. (2) Each endorsee shall receive training about ethical sales practices. (3) Each endorsee shall receive training about the disclosures to be given to prospective customers pursuant to Section 1758.66. (4) The retraining of endorsees shall be conducted whenever there is a material change in the insurance products sold that requires modification of the training materials, but in no event less frequently than every three years for each endorsee. (Amended by Stats. 2011, Ch. 165, Sec. 4. (AB 690) Effective January 1, 2012. Note: See conditions in Section 1758.693 regarding the initial operative date of Article 16.1, commencing with Section 1758.6.)
  59. 1758.64.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.1. Portable Electronics Insurance [1758.6 - 1758.693] ( Heading of Article 16.1 amended by Stats. 2011, Ch. 426, Sec. 6. )

    Verify source ↗

    An endorsee may act for a portable electronics insurance agent, but only under that agent’s supervision and only for matters tied to transacting insurance under the agent’s license.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.1. Portable Electronics Insurance [1758.6 - 1758.693] ( Heading of Article 16.1 amended by Stats. 2011, Ch. 426, Sec. 6. ) ## 1758.64. An endorsee may act on behalf of and under the supervision of the portable electronics insurance agent in matters relating to transacting insurance under that agent’s license. The conduct of an endorsee of a portable electronics insurance agent acting within the scope of employment or agency shall be deemed the conduct of the portable electronics insurance agent for purposes of this article. (Amended by Stats. 2011, Ch. 165, Sec. 5. (AB 690) Effective January 1, 2012. Note: See conditions in Section 1758.693 regarding the initial operative date of Article 16.1, commencing with Section 1758.6.)
  60. 1758.65.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.1. Portable Electronics Insurance [1758.6 - 1758.693] ( Heading of Article 16.1 amended by Stats. 2011, Ch. 426, Sec. 6. )

    Verify source ↗

    The commissioner may penalize licensees, endorsees, or unlicensed sellers connected to portable electronics insurance, including suspension, revocation, fines, and cease-and-desist orders.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.1. Portable Electronics Insurance [1758.6 - 1758.693] ( Heading of Article 16.1 amended by Stats. 2011, Ch. 426, Sec. 6. ) ## 1758.65. (a) If a licensee or endorsee violates any provision of this article or any other provision of this code, the commissioner may do any of the following: (1) After notice and hearing, suspend or revoke the license of the portable electronics insurance agent. (2) After notice and hearing, impose fines on the portable electronics insurance agent for its conduct or that of its endorsees. (3) After notice and hearing, impose other penalties that the commissioner deems necessary and convenient to carry out the purpose of this code, including suspending the privilege of transacting portable electronics insurance pursuant to this article at specific business locations where violations have occurred, imposing fines on the portable electronics insurance agent, and suspending or revoking the ability of individual endorsees to act under the vendor’s license. (b) If any person or persons sell insurance in connection with, or incidental to, the sale of portable electronics or the sale or provision of accessories or services related thereto, or hold themselves or an organization out as a portable electronics insurance agent without obtaining the license required by this article, or as being licensed pursuant to Chapter 5 (commencing with Section 1621) without obtaining that license, the commissioner may issue a cease and desist order pursuant to Section 12921.8. (c) Notwithstanding any other provision of law to the contrary, the provisions of Section 1748.5 are applicable to both the organization issued a license pursuant to this article and any endorsee to that license. (Amended by Stats. 2021, Ch. 133, Sec. 32. (SB 272) Effective July 23, 2021. Note: See conditions in Section 1758.693 regarding the initial operative date of Article 16.1, commencing with Section 1758.6.)
  61. 1758.66.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.1. Portable Electronics Insurance [1758.6 - 1758.693] ( Heading of Article 16.1 amended by Stats. 2011, Ch. 426, Sec. 6. )

    Verify source ↗

    A portable electronics insurance agent cannot sell coverage by unsolicited phone calls unless required disclosures and written materials are provided at the time of sale or shortly after a telephone sale.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.1. Portable Electronics Insurance [1758.6 - 1758.693] ( Heading of Article 16.1 amended by Stats. 2011, Ch. 426, Sec. 6. ) ## 1758.66. A portable electronics insurance agent shall not sell insurance pursuant to this article by unsolicited telephone calls or otherwise unless, at the time of sale, or reasonably thereafter with respect to a sale or enrollment occurring by telephone, all of the following conditions are satisfied: (a) The portable electronics insurance agent provides brochures or other written materials to the prospective purchaser that do all of the following: (1) Summarize the material terms and conditions of coverage offered, including the identity of the insurer. (2) Describe the process for filing a claim, including a toll-free telephone number to report a claim. (3) Disclose any additional information on the price, benefits, exclusions, conditions, or other limitations of those policies that the commissioner may, by rule, prescribe. (4) Provide the name, address, telephone number, and license number of the licensee or the property and casualty broker-agent appointed by the insurer issuing portable electronics insurance coverage to the licensee, as well as the department’s toll-free consumer hotline. (b) The portable electronics insurance agent or its endorsees make all of the following disclosures, which shall be acknowledged in writing by the purchaser, or displayed by clear and conspicuous signs that are posted at every location where contracts are executed, such as the counter where the purchaser signs the service agreement, or provided in writing to the purchaser: (1) That the purchase by the customer of the kinds of insurance prescribed in this article is not required in order to purchase portable electronics, accessories, or related services. (2) That the insurance policies offered by the portable electronics insurance agent may provide a duplication of coverage already provided by other insurance policies covering the purchaser. (3) That the endorsee of the portable electronics insurance agent is not qualified or authorized to evaluate the adequacy of the purchaser’s existing insurance coverages, unless that person is licensed pursuant to Article 3 (commencing with Section 1631). (4) That the customer may cancel the insurance at any time. If the customer cancels any unearned premium will be refunded in accordance with applicable law. (c) The material terms and conditions of coverage are provided to every person who elects to purchase that coverage. (d) Costs for the insurance are separately itemized in any billing statement for the insurance. However, if the portable electronics coverage is included with the purchase or lease of portable electronics or related services, the vendor shall clearly and conspicuously disclose to the customer that the coverage is included with the purchase of the portable electronics or related services. (e) The insurance is provided under an individual policy issued to the purchaser, or under a group or master policy issued to an organization licensed as a portable electronics insurance agent by an insurer authorized to transact the applicable kinds or types of insurance in this state. (Amended by Stats. 2011, Ch. 165, Sec. 7. (AB 690) Effective January 1, 2012. Note: See conditions in Section 1758.693 regarding the initial operative date of Article 16.1, commencing with Section 1758.6.)
  62. 1758.661.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.1. Portable Electronics Insurance [1758.6 - 1758.693] ( Heading of Article 16.1 amended by Stats. 2011, Ch. 426, Sec. 6. )

    Verify source ↗

    A portable electronics insurance agent licensee may bill and collect charges for portable electronics insurance, and may receive compensation for those services. The licensee does not have to keep the funds in a segregated account if the insurer has given written notice that segregation is not needed.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.1. Portable Electronics Insurance [1758.6 - 1758.693] ( Heading of Article 16.1 amended by Stats. 2011, Ch. 426, Sec. 6. ) ## 1758.661. Charges for portable electronics insurance may be billed and collected by a portable electronics insurance agent licensee. A licensee shall not be required to maintain those funds in a segregated account if the insurer represented by the licensee has provided in writing that the funds need not be segregated from funds received by the portable electronics vendor on account of the sale or lease of portable electronics or related services or accessories. All funds received by a vendor from a customer for the sale of portable electronics insurance shall be considered funds held in trust by the vendor in a fiduciary capacity for the benefit of the insurer. Licensees may receive compensation for billing and collection services. (Amended by Stats. 2011, Ch. 165, Sec. 8. (AB 690) Effective January 1, 2012. Note: See conditions in Section 1758.693 regarding the initial operative date of Article 16.1, commencing with Section 1758.6.)
  63. 1758.67.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.1. Portable Electronics Insurance [1758.6 - 1758.693] ( Heading of Article 16.1 amended by Stats. 2011, Ch. 426, Sec. 6. )

    Verify source ↗

    A portable electronics insurance agent cannot sell insurance except as incidental to selling portable electronics, cannot portray itself or endorsees as licensed insurers or broker-agents, and cannot pay endorsee compensation mainly based on customer coverage choices. Incidental endorsee compensation is allowed, but it must not exceed $15 per customer.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.1. Portable Electronics Insurance [1758.6 - 1758.693] ( Heading of Article 16.1 amended by Stats. 2011, Ch. 426, Sec. 6. ) ## 1758.67. Under the authority of the portable electronics insurance agent license, a portable electronics insurance agent shall not do any of the following: (a) Offer to sell insurance except in conjunction with, and incidental to, the business of selling portable electronics, their accessories, or related services. (b) Advertise, represent, or otherwise portray itself or its endorsees as licensed insurers or property and casualty broker-agents. (c) Pay any endorsee compensation based primarily on the number of customers electing coverage under the portable electronics insurance agent’s license. However, nothing in this code shall prohibit the payment of compensation to an endorsee of a portable electronics insurance agent for activities under the agent’s license that is incidental to their overall compensation. The incidental compensation shall not exceed fifteen dollars ($15) per customer who purchases portable electronics insurance coverage. (d) Unless lawfully transacting the business of insurance pursuant to a certificate of authority issued pursuant to Section 700 for the appropriate class, a person obligated to perform under a contract offered in or from this state that meets the definition of portable electronics insurance as set forth in Section 1758.69 shall be deemed to be unlawfully transacting the business of insurance and shall be subject to subdivision (b) of Section 700 and Section 12921.8. (Amended by Stats. 2011, Ch. 165, Sec. 9. (AB 690) Effective January 1, 2012. Note: See conditions in Section 1758.693 regarding the initial operative date of Article 16.1, commencing with Section 1758.6.)
  64. 1758.68.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.1. Portable Electronics Insurance [1758.6 - 1758.693] ( Heading of Article 16.1 amended by Stats. 2011, Ch. 426, Sec. 6. )

    Verify source ↗

    An insurer selling portable electronics insurance through a licensed portable electronics insurance agent must file certain policies or certificates with the commissioner, and the commissioner must make the policy available to the public.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.1. Portable Electronics Insurance [1758.6 - 1758.693] ( Heading of Article 16.1 amended by Stats. 2011, Ch. 426, Sec. 6. ) ## 1758.68. Any insurer that provides insurance to be sold by an organization licensed as a portable electronics insurance agent shall file a copy of any individual policy issued to a purchaser, or any policy or certificate issued under a group or master policy to an organization licensed as a portable electronics insurance agent, with the commissioner, who shall make that policy available to the public. (Amended by Stats. 2011, Ch. 165, Sec. 10. (AB 690) Effective January 1, 2012. Note: See conditions in Section 1758.693 regarding the initial operative date of Article 16.1, commencing with Section 1758.6.)
  65. 1758.681.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.1. Portable Electronics Insurance [1758.6 - 1758.693] ( Heading of Article 16.1 amended by Stats. 2011, Ch. 426, Sec. 6. )

    Verify source ↗

    This section limits when an insurer can end or change portable electronics insurance and requires written notice to customers and the vendor policyholder.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.1. Portable Electronics Insurance [1758.6 - 1758.693] ( Heading of Article 16.1 amended by Stats. 2011, Ch. 426, Sec. 6. ) ## 1758.681. Notwithstanding any other law: (a) As used in this section, “portable electronics vendor policyholder” means a portable electronics insurance agent licensee pursuant to subdivision (f) of Section 1758.69. (b) An insurer may terminate a portable electronics insurance policy or otherwise change the terms and conditions of a portable electronics insurance policy only upon providing the portable electronics vendor policyholder and enrolled customers with at least 30 calendar days’ written notice. (c) If the insurer changes the terms and conditions of a policy of portable electronics insurance, the insurer shall provide the portable electronics vendor policyholder with a revised policy or endorsement and each enrolled customer with a revised certificate, endorsement, updated brochure, or other evidence indicating that a change in the terms and conditions has occurred and a summary of those changes. (d) Notwithstanding subdivision (b), an insurer may terminate an enrolled customer’s enrollment under a portable electronics insurance policy upon 15 calendar days’ notice for discovery of fraud or material misrepresentation in obtaining coverage or in the presentation of a claim under the policy. (e) Notwithstanding subdivision (b), an insurer may immediately terminate an enrolled customer’s enrollment under a portable electronics insurance policy without prior notice for any of the following: (1) For nonpayment of premium. (2) If the enrolled customer ceases to have an active service with the vendor of portable electronics. (3) If the enrolled customer exhausts the aggregate limit of liability, if any, under the terms of the portable electronics insurance policy and the insurer sends notice of termination to the enrolled customer within 30 calendar days after exhaustion of the limit. However, if notice is not sent within 30 calendar days, enrollment shall continue notwithstanding the aggregate limit of liability until 30 calendar days from the date the insurer sends notice of termination to the enrolled customer. (f) If a portable electronics insurance policy is terminated by a portable electronics vendor policyholder, the portable electronics vendor policyholder shall mail or deliver a written notice to each enrolled customer advising the enrolled customer of the termination of the policy and the effective date of termination. The written notice shall be mailed or delivered by the portable electronics vendor policyholder to the enrolled customer at least 30 days prior to the termination. However, if the notice is not sent within 30 calendar days, enrollment shall continue until 30 calendar days from the date the portable electronics vendor policyholder sends notice of termination to the enrolled customer or until a new portable electronics insurance policy is in effect. (g) Whenever notice or correspondence with respect to a policy of portable electronics insurance is required pursuant to this section, it shall be in writing and sent within the notice period required pursuant to this section. Notices and correspondence shall be sent to the portable electronics vendor policyholder at the portable electronics vendor policyholder’s mailing address specified for that purpose and to its affected enrolled customers’ last known mailing addresses on file with the insurer or the portable electronics vendor policyholder. The insurer or portable electronics vendor policyholder shall maintain proof that the notice or correspondence was sent for not less than three years after that notice or correspondence was sent. (Added by Stats. 2013, Ch. 321, Sec. 21. (AB 1391) Effective January 1, 2014. Note: See conditions in Section 1758.693 regarding the initial operative date of Article 16.1, commencing with Section 1758.6.)
  66. 1758.69.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.1. Portable Electronics Insurance [1758.6 - 1758.693] ( Heading of Article 16.1 amended by Stats. 2011, Ch. 426, Sec. 6. )

    Verify source ↗

    This section defines several terms used in portable electronics insurance and says a license must be renewed on or before the license period’s expiration date.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.1. Portable Electronics Insurance [1758.6 - 1758.693] ( Heading of Article 16.1 amended by Stats. 2011, Ch. 426, Sec. 6. ) ## 1758.69. As used in this article, the following definitions have the following meanings: (a) “Endorsee” means an unlicensed employee or authorized representative of a portable electronics vendor. (b) “Enrollment” means the process of soliciting or accepting enrollments or applications from a consumer under a portable electronics insurance policy, which includes informing the consumer of the availability of coverage, preparing and delivery of the certificate of insurance or notice of proposed insurance, or otherwise assisting the consumer in making an informed decision whether or not to elect to purchase portable electronics insurance. (c) (1) “License period” means all of that two-year period beginning as described in subparagraph (A) or (B) of paragraph (2), as applicable, and ending the second succeeding year on the last calendar day of the month in which the initial license was issued. (2) A license period shall be determined for each person as follows: (A) Upon initial licensing, the license period shall start on the date the license is issued. (B) For a subsequent license, the license period shall start on the first day following the month in which the initial license was issued. (3) A license shall be renewed on or before the expiration date of the license period. (d) (1) “Portable electronics” means all of the following: (A) Personal, self-contained, easily carried by an individual, battery-operated electronic communication, viewing, listening, recording, gaming, computing, or global positioning devices, including cell or satellite phones, pagers, personal global positioning satellite units, portable computers, portable audio listening, video viewing or recording devices, digital cameras, video camcorders, portable gaming systems, docking stations, automatic answering devices, their accessories, and service related to the use of those devices. (B) Any other electronic device that is portable in nature that the commissioner approves. (2) “Portable electronics” does not include telecommunications switching equipment, transmission wires, cell site transceiver equipment, or other equipment and systems used by telecommunications companies to provide telecommunications service to consumers. (e) (1) “Portable electronics insurance” means a contract providing coverage for the repair or replacement of portable electronics against any one or more of the following causes of loss: loss, theft, mechanical failure, malfunction, damage, or other applicable perils. (2) “Portable electronics insurance” does not include any of the following: (A) A service contract governed by Article 4.5 (commencing with Section 9855) of Chapter 20 of Division 3 of the Business and Professions Code. (B) A policy of insurance covering a seller’s or a manufacturer’s obligations under a warranty. (C) A homeowner’s, renter’s, private passenger automobile, commercial multiperil, or similar policy. (f) “Portable electronics insurance agent license” means an agent license issued to an individual or organization for the enrollment and sale of portable electronics insurance. (g) “Portable electronics vendor” means any person in the business, directly or indirectly, of selling, reselling, soliciting, or leasing portable electronics, their accessories, and related services to customers. (Amended by Stats. 2011, Ch. 165, Sec. 11. (AB 690) Effective January 1, 2012. Note: See conditions in Section 1758.693 regarding the initial operative date of Article 16.1, commencing with Section 1758.6.)
  67. 1758.691.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.1. Portable Electronics Insurance [1758.6 - 1758.693] ( Heading of Article 16.1 amended by Stats. 2011, Ch. 426, Sec. 6. )

    Verify source ↗

    This section says the article on portable electronics insurance does not limit or interfere with other laws regulating the sale of portable electronics insurance.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.1. Portable Electronics Insurance [1758.6 - 1758.693] ( Heading of Article 16.1 amended by Stats. 2011, Ch. 426, Sec. 6. ) ## 1758.691. Nothing in this article regulating the sale of portable electronics insurance shall be construed to impair or impede the application of any other law regulating the sale of portable electronics insurance. (Amended by Stats. 2011, Ch. 165, Sec. 12. (AB 690) Effective January 1, 2012. Note: See conditions in Section 1758.693 regarding the initial operative date of Article 16.1, commencing with Section 1758.6.)
  68. 1758.692.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.1. Portable Electronics Insurance [1758.6 - 1758.693] ( Heading of Article 16.1 amended by Stats. 2011, Ch. 426, Sec. 6. )

    Verify source ↗

    The commissioner may send renewal notices for portable electronics insurance agent licenses, and the licensee is responsible for renewing even without receiving one.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.1. Portable Electronics Insurance [1758.6 - 1758.693] ( Heading of Article 16.1 amended by Stats. 2011, Ch. 426, Sec. 6. ) ## 1758.692. (a) Not less than 60 days before a permanent license will expire, the commissioner may use an electronic delivery method, including email or other similar electronic method of delivery, to deliver, or may mail, to the latest email or mailing address appearing on the commissioner’s records, an application to the licensee to renew the license of a portable electronics insurance agent for the appropriate succeeding license term. It is the licensee’s responsibility to renew, whether or not a renewal notice is received. (b) The commissioner may accept a late renewal without penalty, provided that the licensee’s failure to comply is due to a clerical error or inadvertence. (c) An application for renewal of a license may be filed on or before the expiration date. An application for renewal of an expired license may be filed after the expiration date and until that same month and date of the next succeeding year. (d) The commissioner shall impose a penalty fee equal to one-half of the renewal fee for the portable electronics insurance agent license for any renewal that is filed after the expiration date of the license. (Amended by Stats. 2021, Ch. 133, Sec. 33. (SB 272) Effective July 23, 2021. Note: See conditions in Section 1758.693 regarding the initial operative date of Article 16.1, commencing with Section 1758.6.)
  69. 1758.693.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.1. Portable Electronics Insurance [1758.6 - 1758.693] ( Heading of Article 16.1 amended by Stats. 2011, Ch. 426, Sec. 6. )

    Verify source ↗

    This section says the article only takes effect after the commissioner determines enough personnel exist or are authorized, and it lets the commissioner accept licensure applications from communications equipment vendors starting January 1, 2003, without acting on them.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.1. Portable Electronics Insurance [1758.6 - 1758.693] ( Heading of Article 16.1 amended by Stats. 2011, Ch. 426, Sec. 6. ) ## 1758.693. (a) This article shall become operative only upon a determination by the commissioner that the personnel positions needed to carry out the provisions of this article are in existence or have been authorized in the Budget Act of 2002 or a subsequent budget act. (b) On and after January 1, 2003, the commissioner may accept applications from communications equipment vendors seeking licensure pursuant to this article. However, the commissioner shall not act upon the applications. If, prior to April 30, 2003, the commissioner receives 50 applications or less, the commissioner shall be deemed to have sufficient personnel to carry out the provisions of this article and this article shall immediately become operative. (Added by Stats. 2002, Ch. 437, Sec. 1. Effective January 1, 2003. Note: This section prescribes conditions for the operation of Article 16.1, commencing with Section 1758.6.)
  70. 1758.7.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.3. Self-Service Storage Agents [1758.7 - 1758.792] ( Article 16.3 added by Stats. 2004, Ch. 428, Sec. 3. )

    Verify source ↗

    Self-service storage facilities and their franchisees may not offer or sell insurance unless they comply with this article and get a commissioner-issued license.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.3. Self-Service Storage Agents [1758.7 - 1758.792] ( Article 16.3 added by Stats. 2004, Ch. 428, Sec. 3. ) ## 1758.7. (a) A self-service storage facility, or franchisee of a self-service storage facility, shall not offer or sell insurance unless it has complied with the requirements of this article and has been issued a license by the commissioner as provided in this article. (b) The commissioner may issue to a self-service storage facility, or its franchisee, that has complied with the requirements of this article, a license that authorizes the self-service storage facility or its franchisee to offer or sell the types of insurance specified in Section 1758.75 in connection with and incidental to rental agreements on behalf of any insurer authorized to write those types of insurance policies in this state. (c) (1) The license period shall be a two-year period beginning as described in subparagraph (A) or (B) of paragraph (2), as applicable, and ending on the second succeeding year on the last calendar day of the month in which the initial license was issued. (2) The commencement of a license period shall be determined for each self-service storage facility or franchisee of a self-service storage facility, as follows: (A) Upon initial licensing, the license period begins on the date the license is issued. (B) Upon license renewal, the license period begins on the first day of the month following the month in which the initial license was issued. (3) (A) Not less than 60 days before a permanent license will expire, the commissioner may use an electronic delivery method, including email or other similar electronic method of delivery, to deliver, or may mail, to the latest email or mailing address appearing on the commissioner’s records, an application to the licensee to renew the license for the appropriate succeeding license period. It is the licensee’s responsibility to renew whether or not a renewal application is received. The commissioner may accept a late renewal without penalty, provided that the licensee’s failure to comply is due to clerical error or inadvertence on the part of the department. (B) The application for renewal of a license shall be filed on or before the expiration date. (C) The application for renewal of an expired license may be filed after the expiration date and until the same month and day of the next succeeding year. A licensee who files the renewal application after the license has expired shall be charged, in addition to the renewal fee, a penalty of 50 percent of the renewal fee. (d) The applicant for a license pursuant to this section shall submit an application fee upon initial application and upon renewal application of two hundred ninety-four dollars ($294). (e) Costs associated with any enforcement action or investigation shall be paid for by the person or organization licensed pursuant to this article. (Amended by Stats. 2021, Ch. 133, Sec. 34. (SB 272) Effective July 23, 2021.)
  71. 1758.71.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.3. Self-Service Storage Agents [1758.7 - 1758.792] ( Article 16.3 added by Stats. 2004, Ch. 428, Sec. 3. )

    Verify source ↗

    An applicant for a self-service storage agent license must file specified documents with the commissioner, including an application and an insurer certificate.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.3. Self-Service Storage Agents [1758.7 - 1758.792] ( Article 16.3 added by Stats. 2004, Ch. 428, Sec. 3. ) ## 1758.71. (a) An applicant for a self-service storage agent license shall file the following documents with the commissioner: (1) A written application for licensure signed by the applicant or an officer of the applicant in the form prescribed by the commissioner. (2) A certificate by the insurer that is to be named in the self-service storage agent license stating that the insurer has satisfied itself that the named applicant is trustworthy and competent to act as its agent for the limited purpose of offering or selling the types of insurance specified in Section 1758.75 in connection with, and incidental to, self-service storage rental agreements and that the insurer will appoint the applicant to act as its agent in reference to offering or selling those types of insurance if the applicant is licensed by the commissioner. The certification shall be subscribed by an officer or managing agent of the insurer on a form prescribed by the commissioner. (b) Notwithstanding any other provision of law, Sections 1667, 1668, 1668.5, 1669, 1670, 1738, and 1739 apply to any application for or issuance of a license pursuant to this article. (Added by Stats. 2004, Ch. 428, Sec. 3. Effective January 1, 2005.)
  72. 1758.72.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.3. Self-Service Storage Agents [1758.7 - 1758.792] ( Article 16.3 added by Stats. 2004, Ch. 428, Sec. 3. )

    Verify source ↗

    Self-service storage agents must provide employee insurance training, and facilities must submit and maintain training materials and endorsee lists with the department/commissioner; employees under 18 may not be endorsed.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.3. Self-Service Storage Agents [1758.7 - 1758.792] ( Article 16.3 added by Stats. 2004, Ch. 428, Sec. 3. ) ## 1758.72. (a) Each self-service storage agent shall provide an insurance training program for its employees that shall meet the following minimum standards: (1) Each employee shall receive instruction about the types of insurance specified in Section 1758.75 that are offered for sale to prospective renters. (2) Each employee shall receive training about ethical sales practices. (3) Each employee shall receive training about the disclosures to be given to prospective renters pursuant to subdivision (b) of Section 1758.76. (b) Training materials used by or on behalf of the self-service storage facility to train its endorsee shall be submitted to the department at the time the applicant applies for a license under this article and whenever modified thereafter. Any changes to previously submitted training materials shall be submitted to the department with the changes highlighted 30 days prior to their use by the licensee. Training materials and changes in those materials submitted to the department pursuant to this subdivision shall be deemed approved for use by the company unless the company is notified by the department to the contrary. Failure by a self-service storage facility to submit training materials or changes for department review, or use of unapproved or disapproved training materials shall constitute grounds for the denial of an application for license, nonrenewal of a license, or a suspension of a license, as appropriate. (c) An employee may not be endorsed to a self-service storage agent license unless that employee is 18 years of age or older. (d) The self-service storage facility, at the time it submits its self-service storage agent license application pursuant to Section 1758.71, shall establish a list of the names of all endorsees to its self-service storage agent license. The list shall be maintained by the self-service storage facility in a form prescribed by, or format acceptable to, the commissioner, and shall be updated annually. The list shall be retained by the self-service storage facility for three years and made available to the commissioner for review and inspection. (Added by Stats. 2004, Ch. 428, Sec. 3. Effective January 1, 2005.)
  73. 1758.73.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.3. Self-Service Storage Agents [1758.7 - 1758.792] ( Article 16.3 added by Stats. 2004, Ch. 428, Sec. 3. )

    Verify source ↗

    A trained employee of a licensee may act for and under the supervision of the self-service storage facility agent in business matters covered by the agent’s license.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.3. Self-Service Storage Agents [1758.7 - 1758.792] ( Article 16.3 added by Stats. 2004, Ch. 428, Sec. 3. ) ## 1758.73. Any employee of a licensee who has been trained pursuant to Section 1758.72 may act on behalf and under the supervision of the self-service storage facility agent in matters relating to the conduct of business under that agent’s license. The conduct of an employee or agent of a licensee acting within the scope of employment or agency shall be deemed the conduct of the self-service storage facility agent for the purposes of this article. (Added by Stats. 2004, Ch. 428, Sec. 3. Effective January 1, 2005.)
  74. 1758.74.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.3. Self-Service Storage Agents [1758.7 - 1758.792] ( Article 16.3 added by Stats. 2004, Ch. 428, Sec. 3. )

    Verify source ↗

    The commissioner may discipline a licensee or self-service storage agent for violations of this article, including revoking or suspending licenses, imposing fines, and issuing cease and desist orders.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.3. Self-Service Storage Agents [1758.7 - 1758.792] ( Article 16.3 added by Stats. 2004, Ch. 428, Sec. 3. ) ## 1758.74. (a) If a licensee violates any provision of this article, the commissioner may do any of the following: (1) After notice and hearing, revoke or suspend the self-service storage facility’s license. (2) After notice and hearing, impose other penalties, including suspending the transaction of insurance at specific self-service storage facilities where violations of this article have occurred. (3) Impose fines and penalties on the self-service storage agent for its conduct or that of its employees. (b) If any person or persons sell insurance in connection with, or incidental to, self-service storage rental agreements, or hold themselves or an organization out as a self-service storage agent without obtaining the license required by this article, the commissioner may issue a cease and desist order pursuant to Section 12921.8. (c) Notwithstanding any other provision of law, the provisions of Section 1748.5 are applicable to a self-service storage facility or its franchisee issued a license pursuant to this article. (Amended by Stats. 2021, Ch. 133, Sec. 35. (SB 272) Effective July 23, 2021.)
  75. 1758.75.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.3. Self-Service Storage Agents [1758.7 - 1758.792] ( Article 16.3 added by Stats. 2004, Ch. 428, Sec. 3. )

    Verify source ↗

    A licensed self-service storage facility or franchisee may act as a self-service storage agent for an authorized insurer only for certain insurance tied to storage rental agreements.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.3. Self-Service Storage Agents [1758.7 - 1758.792] ( Article 16.3 added by Stats. 2004, Ch. 428, Sec. 3. ) ## 1758.75. A self-service storage facility or its franchisee licensed under this article may act as a self-service storage agent for an authorized insurer only with respect to the following types of insurance and only in connection with, and incidental to, self-service storage rental agreements: (a) Insurance that provides hazard insurance coverage to renters for the loss of, or damage to, tangible personal property in storage or in transit during the rental period. (b) Any other coverage the commissioner may approve as meaningful and appropriate in connection with the rental of storage space. (Added by Stats. 2004, Ch. 428, Sec. 3. Effective January 1, 2005.)
  76. 1758.76.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.3. Self-Service Storage Agents [1758.7 - 1758.792] ( Article 16.3 added by Stats. 2004, Ch. 428, Sec. 3. )

    Verify source ↗

    A licensee may not sell this insurance unless required brochures and disclosures are provided, and coverage evidence is given when a renter buys coverage.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.3. Self-Service Storage Agents [1758.7 - 1758.792] ( Article 16.3 added by Stats. 2004, Ch. 428, Sec. 3. ) ## 1758.76. A licensee shall not sell insurance pursuant to this article unless all of the following conditions are satisfied: (a) The self-service storage agent provides brochures or other written material to the prospective renter that does all of the following: (1) Summarizes the material terms and conditions of coverage offered to renters, including the identity of the insurer. (2) Describes the process for filing a claim, including a toll-free telephone number to report a claim. (3) Discloses any additional information on the price, benefits, exclusions, conditions, or other limitations of the types of insurance specified in Section 1758.75 that the commissioner may by rule prescribe. (4) Provide the licensee’s name, address, telephone number, and license number and the availability of the department’s toll-free consumer hotline. (b) The self-service storage agent makes all of the following disclosures to the renter, which shall be acknowledged in writing by the renter, or displayed by clear and conspicuous signs that are posted at every location where rental agreements are executed, such as the counter where a renter would sign a rental agreement: (1) That the purchase by the renter of the insurance is not required in order to rent storage space. However, the licensee’s employees may advise the renter that the self-service storage facility’s rental agreement may contain provisions requiring the renter to provide insurance on that renter’s property in the storage unit. (2) That the insurance policies offered by the self-service storage agent may provide a duplication of coverage already provided by a renter’s homeowners insurance policy or by another source of coverage. (3) That the self-service storage facility and its employees are not qualified or authorized to evaluate the adequacy of the purchaser’s existing insurance coverage. (c) If a renter elects to purchase the coverage, evidence of coverage is stated on the face of the rental agreement or is provided to the renter. (d) The insurance is provided under an individual, a group, or a master policy issued to the self-service storage agent by an insurer authorized to write the types of insurance specified in Section 1758.75 in this state. (Amended by Stats. 2021, Ch. 133, Sec. 36. (SB 272) Effective July 23, 2021.)
  77. 1758.77.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.3. Self-Service Storage Agents [1758.7 - 1758.792] ( Article 16.3 added by Stats. 2004, Ch. 428, Sec. 3. )

    Verify source ↗

    A licensee is exempt from treating certain renter insurance moneys as fiduciary funds if the insurer gives a written statement and the insurance charges are itemized in the rental agreement.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.3. Self-Service Storage Agents [1758.7 - 1758.792] ( Article 16.3 added by Stats. 2004, Ch. 428, Sec. 3. ) ## 1758.77. A licensee shall not be required to treat moneys collected from renters purchasing insurance pursuant to this article as funds received in a fiduciary capacity if the insurer represented by the licensee has provided in writing that the funds need not be segregated from funds received by the self-service storage agent if the charges for insurance coverage are itemized and incorporated as part of the rental agreement. (Added by Stats. 2004, Ch. 428, Sec. 3. Effective January 1, 2005.)
  78. 1758.78.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.3. Self-Service Storage Agents [1758.7 - 1758.792] ( Article 16.3 added by Stats. 2004, Ch. 428, Sec. 3. )

    Verify source ↗

    A self-service storage agent must not sell insurance except when it is incidental to an authorized rental agreement, and must not hold itself out as a licensed insurer, insurance agent, or insurance broker.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.3. Self-Service Storage Agents [1758.7 - 1758.792] ( Article 16.3 added by Stats. 2004, Ch. 428, Sec. 3. ) ## 1758.78. A self-service storage agent shall not do any of the following: (a) Offer to sell insurance except in conjunction with, and incidental to, authorized rental agreements. (b) Advertise, represent, or otherwise portray itself or its employees as licensed insurers, insurance agents, or insurance brokers. (Added by Stats. 2004, Ch. 428, Sec. 3. Effective January 1, 2005.)
  79. 1758.79.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.3. Self-Service Storage Agents [1758.7 - 1758.792] ( Article 16.3 added by Stats. 2004, Ch. 428, Sec. 3. )

    Verify source ↗

    An insurer covered by this section must file a copy of the policy with the commissioner, and the commissioner must make the policy available to the public.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.3. Self-Service Storage Agents [1758.7 - 1758.792] ( Article 16.3 added by Stats. 2004, Ch. 428, Sec. 3. ) ## 1758.79. Any insurer that provides insurance to be sold by a self-service storage facility or its franchisee under this article shall file a copy of the policy with the commissioner, who shall make that policy available to the public. (Added by Stats. 2004, Ch. 428, Sec. 3. Effective January 1, 2005.)
  80. 1758.791.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.3. Self-Service Storage Agents [1758.7 - 1758.792] ( Article 16.3 added by Stats. 2004, Ch. 428, Sec. 3. )

    Verify source ↗

    This section defines key terms used in the article about self-service storage agents.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.3. Self-Service Storage Agents [1758.7 - 1758.792] ( Article 16.3 added by Stats. 2004, Ch. 428, Sec. 3. ) ## 1758.791. As used in this article: (a) “Self-service storage facility” means a person or organization engaged in the business of providing leased or rented storage space to the public. (b) “Storage space” means a room, unit, locker, or open space offered for rental to the public for temporary storage of personal belongings or light commercial goods. (c) “Renter” means any person who obtains the use of storage space from a self-service storage company under the terms of a rental agreement. (d) “Rental agreement” means any written agreement for the terms and conditions governing the use of a storage space provided by a self-service storage company. (e) “Self-service storage agent” means a person or organization licensed pursuant to this article to offer insurance in connection with, and incidental to, rental agreements on behalf of an insurer authorized to write the types of insurance specified in Section 1758.75 in this state. (Added by Stats. 2004, Ch. 428, Sec. 3. Effective January 1, 2005.)
  81. 1758.792.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.3. Self-Service Storage Agents [1758.7 - 1758.792] ( Article 16.3 added by Stats. 2004, Ch. 428, Sec. 3. )

    Verify source ↗

    The commissioner must adopt rules to carry out this article, and those rules may include fee differences for smaller self-service storage facilities.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.3. Self-Service Storage Agents [1758.7 - 1758.792] ( Article 16.3 added by Stats. 2004, Ch. 428, Sec. 3. ) ## 1758.792. The commissioner shall adopt rules to implement the provisions of this article which may include fee differentials for smaller, self-service storage facilities. The rules shall be adopted as emergency regulations in accordance with Chapter 3.5 (commencing with Section 11340) of Division 3 of Title 2 of the Government Code, and for the purposes of that chapter, including Section 11349.6 of the Government Code, the adoption of rules shall be considered by the Office of Administrative Law to be necessary for the immediate preservation of the public peace, health and safety, and general welfare. (Added by Stats. 2004, Ch. 428, Sec. 3. Effective January 1, 2005.)
  82. 1758.8.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.6. Car Rental Agents [1758.8 - 1758.891] ( Heading of Article 16.6 amended by Stats. 2020, Ch. 184, Sec. 30. )

    Verify source ↗

    A rental car company may not offer or sell insurance unless it is properly licensed or has complied with this article and received a license from the commissioner.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.6. Car Rental Agents [1758.8 - 1758.891] ( Heading of Article 16.6 amended by Stats. 2020, Ch. 184, Sec. 30. ) ## 1758.8. (a) A rental car company shall not offer or sell insurance unless it is licensed as an insurance agent or broker pursuant to Article 3 (commencing with Section 1631) or has complied with the requirements of this article and has been issued a license by the commissioner as provided in this article. (b) The commissioner may issue to a rental car company, or to a franchisee of a rental car company, that has complied with the requirements of this article, a license that authorizes the rental car company or the franchisee of a rental car company to act as a car rental agent to offer or sell those types of insurance specified in Section 1758.85, in connection with and incidental to rental agreements, on behalf of any insurer authorized to write those types of insurance in this state. (Amended by Stats. 2020, Ch. 184, Sec. 31. (SB 1255) Effective January 1, 2021.)
  83. 1758.81.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.6. Car Rental Agents [1758.8 - 1758.891] ( Heading of Article 16.6 amended by Stats. 2020, Ch. 184, Sec. 30. )

    Verify source ↗

    Car rental agent license applicants must file specified documents and pay the stated fees; licensees must renew on time, and late renewal can trigger a 50% penalty unless the commissioner waives it for departmental clerical error or inadvertence.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.6. Car Rental Agents [1758.8 - 1758.891] ( Heading of Article 16.6 amended by Stats. 2020, Ch. 184, Sec. 30. ) ## 1758.81. (a) An applicant for a car rental agent license under this article shall file the following documents with the commissioner: (1) A written application for licensure, signed by the applicant or an officer of the applicant, in the form prescribed by the commissioner. (2) A certificate by the insurer that is to be named in the car rental agent license, stating that the insurer has satisfied itself that the named applicant is trustworthy and competent to act as its insurance agent limited to this purpose and that the insurer will appoint the applicant to act as its agent to transact the kind or kinds of insurance that are permitted by this article, if the car rental agent license applied for is issued by the commissioner. The certification shall be subscribed by an officer or managing agent of the insurer on a form prescribed by the commissioner. (3) An application fee, and, each license period thereafter, a renewal fee, of four hundred sixty-three dollars ($463). (4) Not less than 60 days before a permanent license will expire, the commissioner may use an electronic delivery method, including email or other similar electronic method of delivery, to deliver, or may mail, to the latest email or mailing address appearing on the licensee’s records, an application to the licensee to renew the license for the appropriate succeeding license period. It is the licensee’s responsibility to renew whether or not a renewal application is received. The commissioner may accept a late renewal without a penalty, provided the licensee’s failure to comply is due to clerical error or inadvertence on the part of the department. (A) The application for renewal of a license shall be filed on or before the expiration date. (B) The application for renewal of an expired license may be filed after the expiration date and until that same month and day of the next succeeding year. A licensee who files the renewal application after the license has expired shall be charged, in addition to the renewal fee, a penalty of 50 percent of the renewal fee. (b) Notwithstanding any other law to the contrary, Sections 1667, 1668, 1668.5, 1669, 1670, 1720, 1738, and 1739 apply to any application for or issuance of a license pursuant to this article. (c) Costs associated with any enforcement action or investigation shall be paid for by the person or organization licensed pursuant to this article. (Amended by Stats. 2020, Ch. 184, Sec. 32. (SB 1255) Effective January 1, 2021.)
  84. 1758.82.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.6. Car Rental Agents [1758.8 - 1758.891] ( Heading of Article 16.6 amended by Stats. 2020, Ch. 184, Sec. 30. )

    Verify source ↗

    Rental car companies with a car rental agent license must train endorsees, keep and submit endorsee lists and training materials, and meet annual certification and retraining requirements.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.6. Car Rental Agents [1758.8 - 1758.891] ( Heading of Article 16.6 amended by Stats. 2020, Ch. 184, Sec. 30. ) ## 1758.82. (a) An employee of a rental car company or franchisee of a rental car company that has been issued a car rental agent license pursuant to this article may be an endorsee authorized to offer insurance products under the authority of the car rental agent license if all of the following conditions have been met: (1) The employee is 18 years of age or older. (2) The rental car company, at the time it submits its car rental agent license application pursuant to Section 1758.81, also establishes a list of the names of all endorsees to its car rental agent license. The list shall be maintained by the rental car company in a form prescribed by the commissioner and updated annually. The list shall be retained by the rental car company for three years and made available to the commissioner for review and inspection. (3) The rental car company submits to the commissioner with its initial car rental agent license application and annually thereafter a certification, subscribed by an officer of the company on a form prescribed by the commissioner, stating all of the following: (A) The number of endorsees offering insurance products under the authority of the car rental agent license for the applicable period. (B) A statement that no person other than an endorsee sells or offers insurance on its behalf. (C) That all endorsees have completed training as required by this article. (b) Each rental car company licensed pursuant to this article shall provide for the training of its endorsees prior to allowing its endorsees to offer or sell insurance products. The training shall meet the following minimum standards: (1) Each car rental endorsee shall receive instruction about the types of insurance specified in Section 1758.85 that are offered for sale to prospective renters. (2) Each car rental endorsee shall receive training about ethical sales practices. (3) Each car rental endorsee shall receive training about the disclosures to be given to prospective renters pursuant to subdivision (c) of Section 1758.86. (c) Training materials used by or on behalf of the rental car company to train its endorsees shall be submitted to the department at the time the rental car company applies for a license under this article, and whenever modified thereafter. Any changes to previously submitted training materials shall be submitted to the department with the changes highlighted 30 days prior to their use by the licensee. Training materials and changes to those materials submitted to the department pursuant to this subdivision shall be deemed approved for use by the company unless it is notified by the department to the contrary. Failure by a rental car company to submit training materials or changes for departmental review or use of unapproved or disapproved training materials shall constitute grounds for denial of an application for a license, nonrenewal of a license, or suspension of a license, as appropriate. (d) The rental car company shall periodically retrain its endorsees on the subject matter described in subdivision (b), as prescribed by the commissioner. (Amended by Stats. 2020, Ch. 184, Sec. 33. (SB 1255) Effective January 1, 2021.)
  85. 1758.83.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.6. Car Rental Agents [1758.8 - 1758.891] ( Heading of Article 16.6 amended by Stats. 2020, Ch. 184, Sec. 30. )

    Verify source ↗

    Rental car company location managers or supervisors must be endorsees and oversee additional endorsees; each licensee must identify the relevant manager or supervisor; endorsees may act for the car rental agent under supervision in insurance matters.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.6. Car Rental Agents [1758.8 - 1758.891] ( Heading of Article 16.6 amended by Stats. 2020, Ch. 184, Sec. 30. ) ## 1758.83. (a) The manager at each location of a rental car company or a franchisee of a rental car company licensed pursuant to this article, or the direct supervisor of the company’s endorsees at each location or region shall be an endorsee and shall be responsible for the supervision of each additional endorsee at that location or region. Each licensee shall identify the endorsee who is the manager or supervisor at each location for the purposes of this article. (b) An endorsee may act on behalf and under the supervision of the car rental agent in matters relating to transacting insurance under that agent’s license. The conduct of an endorsee of a car rental agent acting within the scope of employment or agency shall be deemed the conduct of the car rental agent for purposes of this article. (Amended by Stats. 2020, Ch. 184, Sec. 34. (SB 1255) Effective January 1, 2021.)
  86. 1758.84.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.6. Car Rental Agents [1758.8 - 1758.891] ( Heading of Article 16.6 amended by Stats. 2020, Ch. 184, Sec. 30. )

    Verify source ↗

    The commissioner may punish a car rental agent or endorsee for violations, including by suspending or revoking licenses, imposing fines, or ordering other penalties.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.6. Car Rental Agents [1758.8 - 1758.891] ( Heading of Article 16.6 amended by Stats. 2020, Ch. 184, Sec. 30. ) ## 1758.84. (a) If a licensee or endorsee violates any provision of this article or any other provision of this code, the commissioner may do any of the following: (1) After notice and hearing, suspend or revoke the license of the car rental agent. (2) After notice and hearing impose fines on the car rental agent for its conduct or that of its endorsees. (3) After notice and hearing, impose other penalties, that the commissioner deems necessary and convenient to carry out the purpose of this code, including suspending the privilege of transacting insurance at specific rental locations where violations have occurred, and suspending or revoking the endorsement of individual endorsees or manager endorsees. (b) If any person sells insurance in connection with, or incidental to, rental car agreements or claims to be or holds an organization out as a car rental agent without obtaining the license required by this article, or as being an endorsee when that person is not an endorsee, or as being licensed pursuant to Chapter 5 (commencing with Section 1631) without obtaining that license, the commissioner may issue a cease and desist order pursuant to Section 12921.8. (c) Notwithstanding any other provision of law to the contrary, the provisions of Section 1748.5 are applicable to both the car rental agent and any endorsee to the license of the car rental agent. (Amended by Stats. 2020, Ch. 184, Sec. 35. (SB 1255) Effective January 1, 2021.)
  87. 1758.85.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.6. Car Rental Agents [1758.8 - 1758.891] ( Heading of Article 16.6 amended by Stats. 2020, Ch. 184, Sec. 30. )

    Verify source ↗

    A licensed rental car company or franchisee may act as a car rental agent for an authorized insurer, but only for vehicle rentals and only for the listed insurance types.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.6. Car Rental Agents [1758.8 - 1758.891] ( Heading of Article 16.6 amended by Stats. 2020, Ch. 184, Sec. 30. ) ## 1758.85. A rental car company or franchisee licensed under this article may act as a car rental agent for an authorized insurer only in connection with the rental of vehicles and only with respect to the following kinds of insurance: (a) Personal accident insurance for renters and other rental vehicle occupants, for accidental death or dismemberment, and for medical expenses resulting from an accident that occurs with the rental vehicle during the rental period. (b) Liability insurance, which may include uninsured motorist coverage, whether offered separately or in combination with other liability insurance, that provides coverage to the renters and to other authorized drivers of a rental vehicle and is nonduplicative of any standard liability coverage or self-insurance limits provided by the rental company in its rental agreement, for liability arising from the negligent operation of the rental vehicle during the rental period. (c) Personal effects insurance that provides coverage to renters and other vehicle occupants for loss of, or damage to, personal effects in the rental vehicle during the rental period. (d) Roadside assistance insurance. (e) Emergency sickness insurance. (Amended by Stats. 2020, Ch. 184, Sec. 36. (SB 1255) Effective January 1, 2021.)
  88. 1758.851.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.6. Car Rental Agents [1758.8 - 1758.891] ( Heading of Article 16.6 amended by Stats. 2020, Ch. 184, Sec. 30. )

    Verify source ↗

    Insurance products listed in Section 1758.85 that are sold with a vehicle rental cannot be transferred and only apply to vehicles listed in the rental contract.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.6. Car Rental Agents [1758.8 - 1758.891] ( Heading of Article 16.6 amended by Stats. 2020, Ch. 184, Sec. 30. ) ## 1758.851. The insurance products listed in Section 1758.85 that are sold in conjunction with a vehicle rental are not transferable and do not apply to any vehicle not listed in the rental contract issued. (Added by Stats. 1999, Ch. 618, Sec. 1. Effective January 1, 2000.)
  89. 1758.86.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.6. Car Rental Agents [1758.8 - 1758.891] ( Heading of Article 16.6 amended by Stats. 2020, Ch. 184, Sec. 30. )

    Verify source ↗

    A car rental agent may sell insurance only if specified conditions are met, including a short rental period, required brochures, and required renter disclosures.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.6. Car Rental Agents [1758.8 - 1758.891] ( Heading of Article 16.6 amended by Stats. 2020, Ch. 184, Sec. 30. ) ## 1758.86. A car rental agent shall not sell insurance pursuant to this article unless all of the following conditions are satisfied: (a) The rental period of the rental agreement does not exceed 30 consecutive days, except for any renewals or extension of the original rental period. (b) The car rental agent provides brochures or other written materials to the prospective renter that do all of the following: (1) Summarize the material terms and conditions of coverage offered to renters, including the identity of the insurer. (2) Describe the process for filing a claim, including a toll-free telephone number to report a claim. (3) Disclose any additional information on the price, benefits, exclusions, conditions, or other limitations of those policies that the commissioner may by rule prescribe. (4) Provide the licensee’s name, address, telephone number, and license number, as well as the availability of the department’s toll-free consumer hotline. (c) The car rental agent or its endorsee makes all of the following disclosures to the renter, which shall be acknowledged in writing by the renter, or displayed by clear and conspicuous signs that are posted at every location where rental agreements are executed, such as the counter where the renter signs the rental agreement: (1) That the purchase by the renter of the kinds of insurance prescribed in this article is not required in order to rent a vehicle. (2) That the insurance policies offered by the car rental agent may provide a duplication of coverage already provided by a renter’s personal automobile insurance policy or by another source of coverage. (3) That the endorsee on the car rental agent’s license is not qualified or authorized to evaluate the adequacy of the purchaser’s existing insurance coverages. (d) Evidence of coverage is stated on the face of the rental agreement or evidence of coverages provided to every renter who elects to purchase that coverage is indicated to the renter. (e) The insurance is provided under an individual policy issued to the purchaser, or under a group, or master policy issued to an organization licensed as a car rental agent by an insurer authorized to transact the applicable kinds or types of insurance in this state. (Amended by Stats. 2020, Ch. 184, Sec. 37. (SB 1255) Effective January 1, 2021.)
  90. 1758.861.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.6. Car Rental Agents [1758.8 - 1758.891] ( Heading of Article 16.6 amended by Stats. 2020, Ch. 184, Sec. 30. )

    Verify source ↗

    A licensee is not required to treat certain renter-collected insurance money as fiduciary funds if specific written and itemization conditions are met.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.6. Car Rental Agents [1758.8 - 1758.891] ( Heading of Article 16.6 amended by Stats. 2020, Ch. 184, Sec. 30. ) ## 1758.861. A licensee shall not be required to treat moneys collected from renters purchasing insurance, pursuant to this article, as funds received in a fiduciary capacity if the insurer represented by the licensee has provided in writing that the funds need not be segregated from funds received by the rental car company on account of vehicle rental and the charges for insurance coverage are itemized and incorporated as part of the rental agreement. (Added by Stats. 1999, Ch. 618, Sec. 1. Effective January 1, 2000.)
  91. 1758.87.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.6. Car Rental Agents [1758.8 - 1758.891] ( Heading of Article 16.6 amended by Stats. 2020, Ch. 184, Sec. 30. )

    Verify source ↗

    A car rental agent may not offer, advertise, or pay certain insurance-related compensation except as allowed for performance-related incentives.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.6. Car Rental Agents [1758.8 - 1758.891] ( Heading of Article 16.6 amended by Stats. 2020, Ch. 184, Sec. 30. ) ## 1758.87. A car rental agent shall not do any of the following: (a) Offer to sell insurance except in conjunction with, and incidental to, authorized rental agreements. (b) Advertise, represent, or otherwise portray itself or its employees or endorsees as licensed insurers, life agents, property broker-agents, or casualty broker-agents. (c) Pay an endorsee any compensation, fee, or commission dependent on the placement of insurance under the agent’s license. Nothing in this code shall prohibit the payment of a “performance-related incentive.” For the purposes of this subdivision, a “performance-related incentive” is not a commission as otherwise defined. A “performance-related incentive” is money or other tangible or intangible items of value paid or given to any endorsee of the licensee which is not based solely on the offering or selling of the insurance products listed in Section 1758.85. (Amended by Stats. 2020, Ch. 184, Sec. 38. (SB 1255) Effective January 1, 2021.)
  92. 1758.88.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.6. Car Rental Agents [1758.8 - 1758.891] ( Heading of Article 16.6 amended by Stats. 2020, Ch. 184, Sec. 30. )

    Verify source ↗

    Insurers covered by this article must file copies of certain policies or certificates with the commissioner, and the commissioner must make the policy available to the public.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.6. Car Rental Agents [1758.8 - 1758.891] ( Heading of Article 16.6 amended by Stats. 2020, Ch. 184, Sec. 30. ) ## 1758.88. Any insurer that provides insurance to be sold by a rental car company or franchisee of a rental car company under this article shall file a copy of any individual policy issued to a purchaser, or any policy or certificate issued under a group or master policy to an organization licensed as a car rental agent, with the commissioner, who shall make that policy available to the public. (Amended by Stats. 2020, Ch. 184, Sec. 39. (SB 1255) Effective January 1, 2021.)
  93. 1758.89.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.6. Car Rental Agents [1758.8 - 1758.891] ( Heading of Article 16.6 amended by Stats. 2020, Ch. 184, Sec. 30. )

    Verify source ↗

    This section defines key terms for car rental agents and requires a license to be renewed on or before the license period ends.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.6. Car Rental Agents [1758.8 - 1758.891] ( Heading of Article 16.6 amended by Stats. 2020, Ch. 184, Sec. 30. ) ## 1758.89. As used in this article, the following definitions have the following meanings: (a) (1) “License period” means all of that two-year period beginning as described in subparagraph (A) or (B) of paragraph (2), as applicable, and ending the second succeeding year on the last calendar day of the month in which the initial license was issued. (2) A license period shall be determined for each person as follows: (A) Upon initial licensing, the license period starts on the date the license is issued. (B) Subsequently, the license period starts the first day of the month following the month in which the initial license was issued. (3) A license is required to be renewed on or before the expiration date of the license period. (b) “Rental vehicle” or “vehicle” means a motor vehicle operated by a driver who is not required to possess a commercial driver’s license to operate the motor vehicle and the motor vehicle is either of the following: (1) A private passenger motor vehicle, including a passenger van, minivan, or sports utility vehicle. (2) A cargo vehicle, including a cargo van, pickup truck, or truck with a gross vehicle weight of less than 26,000 pounds. (c) “Renter” means any person who obtains the use of a vehicle from a rental car company under the terms of a rental agreement. (d) “Rental car company” means any person in the business of renting vehicles to the public. (e) “Rental agreement” means any written agreement setting forth the terms and conditions governing the use of a vehicle provided by the rental car company. (f) “Car rental agent” means a person or organization licensed pursuant to this article to offer insurance in connection with and incidental to rental car agreements on behalf of an insurer authorized to write those types of insurance in this state. (g) “Endorsee” means an unlicensed employee of a car rental agent who meets the requirements of this article. (Amended by Stats. 2020, Ch. 184, Sec. 40. (SB 1255) Effective January 1, 2021.)
  94. 1758.891.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.6. Car Rental Agents [1758.8 - 1758.891] ( Heading of Article 16.6 amended by Stats. 2020, Ch. 184, Sec. 30. )

    Verify source ↗

    Until January 1, 2001, rental car companies and their franchisees did not need a license to offer the insurance products listed in Section 1758.85.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.6. Car Rental Agents [1758.8 - 1758.891] ( Heading of Article 16.6 amended by Stats. 2020, Ch. 184, Sec. 30. ) ## 1758.891. Until January 1, 2001, a rental car company or a franchisee of a rental car company shall not be required to obtain a license to offer the insurance products described in Section 1758.85. (Added by Stats. 1999, Ch. 618, Sec. 1. Effective January 1, 2000.)
  95. 1758.9.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.7. Credit Insurance Agents [1758.9 - 1758.993] ( Article 16.7 added by Stats. 2000, Ch. 321, Sec. 7. )

    Verify source ↗

    A person may not sell or solicit credit insurance in this state unless licensed as an insurance agent or broker, or as a credit insurance agent or endorsee under this article.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.7. Credit Insurance Agents [1758.9 - 1758.993] ( Article 16.7 added by Stats. 2000, Ch. 321, Sec. 7. ) ## 1758.9. No person shall sell or solicit any form of credit insurance in this state unless that person is licensed as an insurance agent or broker pursuant to Article 3 (commencing with Section 1631) or is licensed as a credit insurance agent or endorsee under this article. (Amended by Stats. 2022, Ch. 424, Sec. 19. (SB 1242) Effective January 1, 2023.)
  96. 1758.91.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.7. Credit Insurance Agents [1758.9 - 1758.993] ( Article 16.7 added by Stats. 2000, Ch. 321, Sec. 7. )

    Verify source ↗

    The commissioner may issue a credit insurance agent license to an applicant that meets this article’s requirements.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.7. Credit Insurance Agents [1758.9 - 1758.993] ( Article 16.7 added by Stats. 2000, Ch. 321, Sec. 7. ) ## 1758.91. The commissioner may issue to an applicant that has complied with the requirements of this article, a credit insurance agent license to offer or sell those types of insurance specified in Section 1758.96 in connection with, and incidental to, a loan or extension of credit, on behalf of any insurer authorized to write those types of insurance in this state. (Added by Stats. 2000, Ch. 321, Sec. 7. Effective January 1, 2001. Operative January 1, 2002, by Sec. 9 of Ch. 321.)
  97. 1758.92.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.7. Credit Insurance Agents [1758.9 - 1758.993] ( Article 16.7 added by Stats. 2000, Ch. 321, Sec. 7. )

    Verify source ↗

    An applicant must submit a license application, insurer certificate, and fees to the commissioner; licensees must renew on time, and late renewal can trigger a 50% penalty.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.7. Credit Insurance Agents [1758.9 - 1758.993] ( Article 16.7 added by Stats. 2000, Ch. 321, Sec. 7. ) ## 1758.92. (a) An applicant for a credit insurance agent license under this article shall submit each of the following to the commissioner: (1) A written application for licensure signed by the applicant or an officer of the applicant, in the form prescribed by the commissioner. (2) A certificate by the insurer that is to be named in the credit insurance agent license, stating that the insurer has satisfied itself that the named applicant is trustworthy and competent to act as its insurance agent limited to this purpose and that the insurer will appoint the applicant to act as its agent in reference to selling or soliciting the kind or kinds of insurance that are permitted by this article, if the credit insurance agent license applied for is issued by the commissioner. The certification shall be subscribed by an officer or managing agent of the insurer on a form prescribed by the commissioner. (3) An application fee, and, for each license period thereafter, a renewal fee, of four hundred eight dollars ($408). (b) Notwithstanding any other law to the contrary, the provisions set forth in Sections 1667, 1668, 1668.5, 1669, 1670, 1720, 1738, and 1739 apply to any application for or issuance of a license, or any application for or approval of an endorsee, pursuant to this article. (c) (1) Not less than 60 days before a permanent license will expire, the commissioner may use an electronic delivery method, including email or other similar electronic method of delivery, to deliver, or may mail, to the latest email or mailing address appearing on the commissioner’s records, an application to the licensee to renew the license for the appropriate succeeding license period. It is the licensee’s responsibility to renew whether or not a renewal application is received. The commissioner may accept a late renewal without penalty, provided the licensee’s failure to comply is due to a clerical error or inadvertence on the part of the department. (2) An application for renewal shall be filed on or before the expiration date. (3) The application for renewal of an expired license may be filed after the expiration date and until that same month and date of the next succeeding year. A licensee who files a renewal application after the license has expired shall be charged, in addition to the renewal fee, a penalty of 50 percent of the renewal fee for the credit insurance agent license and all endorsees. (d) Costs associated with any enforcement action or investigation shall be paid for by the person or organization licensed pursuant to this article. (Amended by Stats. 2021, Ch. 133, Sec. 37. (SB 272) Effective July 23, 2021.)
  98. 1758.93.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.7. Credit Insurance Agents [1758.9 - 1758.993] ( Article 16.7 added by Stats. 2000, Ch. 321, Sec. 7. )

    Verify source ↗

    Employees of licensed credit insurance organizations may be added as endorsees if they meet age, application, affidavit, training, and fee requirements. Licensed organizations must train endorsees and file required materials with the department.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.7. Credit Insurance Agents [1758.9 - 1758.993] ( Article 16.7 added by Stats. 2000, Ch. 321, Sec. 7. ) ## 1758.93. (a) An employee of an organization that has been issued a credit insurance agent license pursuant to this article may be an endorsee on the license if all of the following conditions have been met: (1) The employee is 18 years of age or older. (2) The employee submits an application to the department that includes a signed affidavit, in a form prescribed by the commissioner, stating the applicant has read the credit insurance training material submitted to the commissioner and that the applicant has received from the organization training in, and is knowledgeable about, the credit insurance products to be sold, ethics, and market practices. (3) The employee submits an application fee, and each year thereafter, a renewal fee, in an amount or amounts determined by the department as sufficient to defray the department’s actual costs of processing the application or renewal and implementing this article. (b) Prior to allowing any endorsee to offer or sell credit-related insurance, the licensed organization shall provide training to each endorsee about the credit insurance products to be sold, and shall submit annually to the department the names of endorsees and a statement of compliance with this article. Training materials used by the organization to train endorsees shall be submitted to the department at the time the organization applies for its credit insurance agent license, and each year thereafter when that license is renewed. Any changes to previously submitted training materials shall be submitted to the department with the changes highlighted 30 days prior to their use by the licensee. Training materials and changes to those materials submitted to the department pursuant to this subdivision shall be deemed approved for use by the company unless it is notified by the department to the contrary. Failure by a credit insurance licensee to submit training materials or changes for departmental review or use of unapproved or disapproved training materials shall constitute grounds for denial of an application for a license, nonrenewal of a license, or suspension of a license, as appropriate. (c) The credit insurance agent shall periodically retrain its endorsees. (Added by Stats. 2000, Ch. 321, Sec. 7. Effective January 1, 2001. Operative January 1, 2002, by Sec. 9 of Ch. 321.)
  99. 1758.94.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.7. Credit Insurance Agents [1758.9 - 1758.993] ( Article 16.7 added by Stats. 2000, Ch. 321, Sec. 7. )

    Verify source ↗

    Credit insurance agent locations must list their manager as an endorsee, and the manager must supervise additional endorsees at that location.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.7. Credit Insurance Agents [1758.9 - 1758.993] ( Article 16.7 added by Stats. 2000, Ch. 321, Sec. 7. ) ## 1758.94. (a) The manager at each business location of an organization licensed as a credit insurance agent, shall be listed as an endorsee on the organization’s license and shall be responsible for the training and supervision of each additional endorsee at that location. Each licensee shall identify the endorsee who is the manager at each location for the purposes of this article. (b) An employee of a credit insurance agent who complies with the requirements of Section 1758.93, and is endorsed on the license of the credit insurance agent, may act on behalf of, and under the supervision of, the credit insurance agent in matters relating to transacting insurance under that agent’s license. The conduct of an endorsee of a credit insurance agent acting within the scope of employment or agency shall be deemed the conduct of the credit insurance agent for purposes of this article. (Added by Stats. 2000, Ch. 321, Sec. 7. Effective January 1, 2001. Operative January 1, 2002, by Sec. 9 of Ch. 321.)
  100. 1758.95.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.7. Credit Insurance Agents [1758.9 - 1758.993] ( Article 16.7 added by Stats. 2000, Ch. 321, Sec. 7. )

    Verify source ↗

    If a licensee or endorsee violates this article or other code provisions, the commissioner may suspend or revoke the license or endorsement and impose other penalties. The commissioner may also issue a cease and desist order for certain unlicensed or misrepresented credit insurance activity.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.7. Credit Insurance Agents [1758.9 - 1758.993] ( Article 16.7 added by Stats. 2000, Ch. 321, Sec. 7. ) ## 1758.95. (a) If a licensee or endorsee violates any provision of this article or any other provision of this code, the commissioner may do either of the following: (1) After notice and hearing, suspend or revoke the license of the credit insurance agent. (2) After notice and hearing, impose other penalties that the commissioner deems necessary and convenient to carry out the purposes of this code, including suspending the privilege of transacting credit insurance pursuant to this article at specific business locations where violations have occurred, imposing fines on the credit insurance agent, individual endorsees or endorsee managers, and suspending or revoking the endorsement of a named endorsee or endorsee manager. (b) If any person or persons sell insurance in connection with or incidental to a loan or other extension of credit or hold themselves or an organization out as a credit insurance agent without obtaining the license required by this article, as being an endorsee when that person is not an endorsee, or as being licensed pursuant to Chapter 5 (commencing with Section 1631) without obtaining that license, the commissioner may issue a cease and desist order pursuant to Section 12921.8. (c) Notwithstanding any other provision of law to the contrary, the provisions of Section 1748.5 are applicable to both the organization issued a license pursuant to this article and any endorsee to that license. (Amended by Stats. 2021, Ch. 133, Sec. 38. (SB 272) Effective July 23, 2021.)
  101. 1758.96.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.7. Credit Insurance Agents [1758.9 - 1758.993] ( Article 16.7 added by Stats. 2000, Ch. 321, Sec. 7. )

    Verify source ↗

    A licensed person may act as a credit insurance agent for an authorized insurer only for the listed kinds of credit insurance and only when sold with a loan or other extension of credit, subject to the stated loan and real-property limits.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.7. Credit Insurance Agents [1758.9 - 1758.993] ( Article 16.7 added by Stats. 2000, Ch. 321, Sec. 7. ) ## 1758.96. A person licensed pursuant to this article may act as a credit insurance agent for an authorized insurer only with respect to the kinds of insurance specified in this section sold in connection with and incidental to a loan or other extension of credit other than a loan in excess of sixty thousand dollars ($60,000) relating to or secured by real property where the repayment period does not exceed 10 years. The sale of credit insurance products as specified in this section in excess of sixty thousand dollars ($60,000) relating to or secured by real property where any compensation, fee, or commission is paid dependent on the placement of credit insurance, requires a license to act as an insurance agent or life agent pursuant to Section 1621 or 1622. (a) Credit life insurance. (b) Credit disability insurance. (c) Credit involuntary unemployment insurance or credit loss-of-income insurance. (d) Credit property insurance. (e) Guaranteed asset protection (GAP) insurance. (f) Any other form of insurance declared by the commissioner to be subject to this section pursuant to subdivision (d) of Section 1758.992. (Amended by Stats. 2011, Ch. 24, Sec. 1. (AB 125) Effective May 10, 2011.)
  102. 1758.97.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.7. Credit Insurance Agents [1758.9 - 1758.993] ( Article 16.7 added by Stats. 2000, Ch. 321, Sec. 7. )

    Verify source ↗

    A credit insurance agent may not sell or offer insurance unless required disclosures and materials are given, evidence of coverage is provided, and costs are separately itemized.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.7. Credit Insurance Agents [1758.9 - 1758.993] ( Article 16.7 added by Stats. 2000, Ch. 321, Sec. 7. ) ## 1758.97. A credit insurance agent shall not sell or offer to sell insurance pursuant to this article unless all of the following conditions are satisfied: (a) The credit insurance agent provides brochures or other written materials to the prospective purchaser that do all of the following: (1) Summarize the material terms and conditions of coverage offered, including the identity of the insurer. (2) Describe the process for filing a claim, including a toll-free telephone number to report a claim. (3) Disclose any additional information on the price, benefits, exclusions, conditions, or other limitations of those policies that the commissioner may by rule prescribe. (b) The credit insurance agent makes all of the following disclosures, either with or as part of each individual policy or group certificate, or with a notice of proposed insurance, or, if the insurance is sold at the same time and place as the related credit transaction, in a statement acknowledged by the purchaser in writing on a separate form, electronically, digitally, or by audio recording: (1) That the purchase of the kinds of insurance prescribed in this article is not required in order to secure the loan or an extension of credit. (2) That the insurance coverage offered by the credit insurance agent may provide a duplication of coverage already provided by a purchaser’s other personal insurance policies or by another source of coverage. (3) That the endorsee is not qualified or authorized to evaluate the adequacy of the purchaser’s existing coverages, unless the individual is licensed pursuant to Article 3 (commencing with Section 1631). (4) That the customer may cancel the insurance at any time. If the customer cancels within 30 days from the delivery of the insurance policy, certificate, or notice of proposed insurance, the premium will be refunded in full. If the customer cancels at any time thereafter, any unearned premium will be refunded in accordance with applicable law. (c) Evidence of coverage is provided to every person who elects to purchase that coverage. (d) Costs for the insurance are separately itemized in any loan, credit, or retail agreement. (e) The insurance is provided under an individual policy issued to the purchaser or under a group or master policy issued to the organization licensed as a credit insurance agent by an insurer authorized to transact the applicable kinds or types of insurance in this state. Any of the conditions and disclosures specified in this section shall be deemed satisfied if the consumer is otherwise provided with the information required in this section by any other disclosures required by existing federal or state law or regulations. No statement, disclosure, or notice made for the purpose of compliance with this section shall be construed to cause the policy form, certificate of insurance, or notice of proposed insurance, by themselves, to be considered nonstandard forms, as described in Article 6.9 (commencing with Section 2249) of Subchapter 2 of Chapter 5 of Title 10 of the California Code of Regulations. (Amended by Stats. 2009, Ch. 88, Sec. 69. (AB 176) Effective January 1, 2010.)
  103. 1758.98.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.7. Credit Insurance Agents [1758.9 - 1758.993] ( Article 16.7 added by Stats. 2000, Ch. 321, Sec. 7. )

    Verify source ↗

    A credit insurance agent may not sell, advertise, or pay compensation in ways this section forbids.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.7. Credit Insurance Agents [1758.9 - 1758.993] ( Article 16.7 added by Stats. 2000, Ch. 321, Sec. 7. ) ## 1758.98. Under the authority of the credit insurance agent license, a credit insurance agent shall not do any of the following: (a) Offer to sell insurance except in conjunction with, and incidental to, a loan or extension of credit. (b) Advertise, represent, or otherwise portray itself or its employees, agents, or endorsees as licensed insurers, life agents, property broker-agents, or casualty broker-agents. (c) Pay any unlicensed person any compensation, fee, or commission dependent on the placement of insurance under the agent’s license. Nothing in this subdivision shall prohibit production payments or incentive payments to an endorsee. (Amended by Stats. 2011, Ch. 411, Sec. 51. (AB 1416) Effective January 1, 2012.)
  104. 1758.99.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.7. Credit Insurance Agents [1758.9 - 1758.993] ( Article 16.7 added by Stats. 2000, Ch. 321, Sec. 7. )

    Verify source ↗

    A licensed credit insurance agent must prominently display its license number and the department’s toll-free consumer hotline number on required brochures, information sheets, and any evidence of insurance.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.7. Credit Insurance Agents [1758.9 - 1758.993] ( Article 16.7 added by Stats. 2000, Ch. 321, Sec. 7. ) ## 1758.99. An organization licensed as a credit insurance agent shall prominently display its license number and the department’s toll free consumer hot line telephone number on brochures and information sheets required by this article and on any evidence of insurance. (Added by Stats. 2000, Ch. 321, Sec. 7. Effective January 1, 2001. Operative January 1, 2002, by Sec. 9 of Ch. 321.)
  105. 1758.991.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.7. Credit Insurance Agents [1758.9 - 1758.993] ( Article 16.7 added by Stats. 2000, Ch. 321, Sec. 7. )

    Verify source ↗

    Certain insurers must file copies of specified policies or certificates with the commissioner, and the commissioner must make the filed policy available to the public.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.7. Credit Insurance Agents [1758.9 - 1758.993] ( Article 16.7 added by Stats. 2000, Ch. 321, Sec. 7. ) ## 1758.991. Any insurer that provides insurance to be sold by an organization licensed as a credit insurance agent shall file a copy of any individual policy issued to a purchaser, or any policy or certificate issued under a group or master policy to an organization licensed as a credit agent, with the commissioner, who shall make that policy available to the public. (Added by Stats. 2000, Ch. 321, Sec. 7. Effective January 1, 2001. Operative January 1, 2002, by Sec. 9 of Ch. 321.)
  106. 1758.992.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.7. Credit Insurance Agents [1758.9 - 1758.993] ( Article 16.7 added by Stats. 2000, Ch. 321, Sec. 7. )

    Verify source ↗

    This section defines several credit-insurance terms and lets the commissioner adopt rules to carry out one subdivision.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.7. Credit Insurance Agents [1758.9 - 1758.993] ( Article 16.7 added by Stats. 2000, Ch. 321, Sec. 7. ) ## 1758.992. As used in this article, the following definitions have the following meanings: (a) “Enrollment” means the process of soliciting or accepting enrollments or applications from a debtor under a credit insurance policy, which includes informing the debtor of the availability of coverage, calculating the insurance charge, preparing and delivering the certificate of insurance or notice of proposed insurance, answering questions regarding the coverage, or otherwise assisting the debtor in making an informed decision whether or not to elect to purchase credit insurance. (b) “Creditor” means a lender of money or a vendor or lessor of goods, services, property, rights, or privileges, for which payment is arranged through a credit transaction, or any successor to the right, title, or interest of that lender, vendor, or lessor, and any affiliate, associate, subsidiary, subcontractor, director, officer, or employee of any of them or any other person in any way associated with any of them. (c) “Credit insurance agent license” means an agent license issued to an individual or organization for the enrollment and sale of credit insurance. (d) (1) “Credit insurance” includes credit life insurance, credit disability insurance, credit involuntary unemployment insurance, credit loss-of-income insurance, credit property insurance, or guaranteed asset protection (GAP) insurance. (2) Credit insurance also includes any other form of insurance offered in connection with an extension of credit that is limited to partially or wholly extinguishing that credit obligation that the commissioner determines should be designated a form of credit insurance. (3) The commissioner may adopt, pursuant to Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, reasonable rules and regulations necessary to carry out this subdivision. (e) (1) “Credit life insurance” means insurance on the life of a debtor pursuant to or in connection with a specific loan or other credit transaction, exclusive of any insurance procured at no expense to the debtor. Insurance shall be deemed procured at no expense to the debtor unless the cost of the credit transaction to the debtor varies depending on whether or not the insurance is procured. (2) “Credit disability insurance” means insurance on a debtor to provide indemnity for payments becoming due on a specific loan or other credit transaction while the debtor is disabled, as defined in the policy, exclusive of any insurance procured at no expense to the debtor. Insurance shall be deemed to have been procured at no expense to the debtor unless the cost of the credit transaction to the debtor varies depending on whether or not the insurance is procured. (f) “Credit involuntary unemployment insurance” or “credit loss-of-income insurance” means insurance issued to provide indemnity for payments becoming due on a specific loan or other credit transaction while the debtor is involuntarily unemployed, as defined in the policy. (g) “Credit property insurance” means insurance that provides coverage (1) on personal property pledged or offered as collateral for securing a personal or consumer loan, or (2) on personal property purchased under an installment sales agreement or through a consumer credit transaction, but does not include any insurance that provides theft, collision, liability, property damage, or comprehensive insurance coverage in any automobile or any other self-propelled vehicle that is designed primarily for operation in the air or on the highways, waterways, or sea, and its operating equipment, or that is necessitated by reason of the liability imposed by law for damages arising out of the ownership, operation, maintenance, or use of those vehicles. However, that excluded insurance does include single interest coverage on any of those vehicles that insures the interest of the creditor in the same manner as collateral secures a loan. (h) (1) “Guaranteed asset protection” (GAP) insurance means insurance in which a person agrees to indemnify a vehicle purchaser or lessee for some or all of the amount owed on the vehicle at the time of an unrecovered theft or total loss, after credit for money received from the purchaser’s or lessee’s physical damage insurer, pursuant to the terms of a loan, lease agreement, or conditional sales contract used to purchase or lease the vehicle. GAP insurance, whether sold by a credit insurance agent or another type of licensee authorized to sell GAP insurance, may also include a promise to pay up to five thousand dollars ($5,000) to an insured, in addition to the sum needed to indemnify the insured for the amount owed, to purchase or lease another vehicle. (2) GAP insurance does not include, and no insurance license of any type under this code is required to offer, any of the following: (A) A debt cancellation agreement contained in a conditional sales contract for the sale of a vehicle by a licensed motor vehicle dealer, or a debt cancellation agreement contained in a lease agreement for the lease of a vehicle by a licensed motor vehicle dealer or leasing company, to waive some or all of either of the following: (i) The difference between the actual cash value of the purchaser’s or lessee’s vehicle at the time of an unrecovered theft or total loss and the amount owed on the vehicle pursuant to the terms of a lease agreement or conditional sales contract used to purchase or lease the vehicle. (ii) The amount owed on the vehicle at the time of an unrecovered theft or total loss, after credit for money received from the purchaser’s or lessee’s physical damage insurer or from a third-party liability insurer. Such a promise may also include a promise to waive some or all of the amount of the purchaser’s or lessee’s deductible. (B) A promise by a lender as part of a debt obligation to purchase or lease a vehicle in which the lender agrees to waive some or all of either of the following: (i) The difference between the actual cash value of the purchaser’s or lessee’s vehicle at the time of an unrecovered theft or total loss and the amount owed on the vehicle pursuant to the terms of the debt obligation used to purchase or lease the vehicle. (ii) The amount owed on the vehicle at the time of an unrecovered theft or total loss, after credit for money received from the purchaser’s or lessee’s physical damage insurer or from a third-party liability insurer. Such a promise may also include a promise to waive some or all of the amount of the purchaser’s or lessee’s deductible. (C) Coverage under subparagraphs (A) and (B) may not result in a credit balance in favor of the vehicle purchaser or lessee or include a promise to pay money to a vehicle purchaser or lessee in addition to waiving some or all of the amount owed, including some or all of the amount of the purchaser’s or lessee’s deductible. For purposes of this paragraph, a promise to pay money does not include, and a dealer, creditor, or lender shall be allowed to offer, a discount or credit to a purchaser or lessee as an incentive for purchasing, leasing, or financing a replacement vehicle. However, the dealer, creditor, or lender shall require the purchaser or lessee to use the discount or credit on a purchase or lease from the dealer or lessor that sold or leased the original vehicle to the purchaser or lessee, or with the creditor or lender that financed the purchase or lease of the original vehicle. (Amended by Stats. 2011, Ch. 24, Sec. 2. (AB 125) Effective May 10, 2011.)
  107. 1758.993.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.7. Credit Insurance Agents [1758.9 - 1758.993] ( Article 16.7 added by Stats. 2000, Ch. 321, Sec. 7. )

    Verify source ↗

    This section says the article on credit insurance must not be read to block other laws that regulate the sale of credit insurance.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. Production Agencies [1621 - 1758.993] ( Chapter 5 repealed and added by Stats. 1959, Ch. 4. ) ## ARTICLE 16.7. Credit Insurance Agents [1758.9 - 1758.993] ( Article 16.7 added by Stats. 2000, Ch. 321, Sec. 7. ) ## 1758.993. Nothing in this article regulating the sale of credit insurance shall be construed to impair or impede the application of any other law regulating the sale of credit insurance, including, but not limited to, the California Financing Law (Division 9 (commencing with Section 22000) of the Financial Code). (Amended by Stats. 2019, Ch. 143, Sec. 75. (SB 251) Effective January 1, 2020.)
  108. 1759.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5A. Administrators [1759 - 1759.10] ( Chapter 5A added by Stats. 1977, Ch. 998. )

    Verify source ↗

    This section defines “administrator” for this chapter and lists several exclusions.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5A. Administrators [1759 - 1759.10] ( Chapter 5A added by Stats. 1977, Ch. 998. ) ## 1759. For purposes of this chapter, “administrator” means any person who collects any charge or premium from, or who adjusts or settles claims on, residents of this state in connection with life or health insurance coverage or annuities or coverage described in Section 740 other than any of the following: (a) An employer on behalf of its employees or the employees of one or more subsidiary or affiliated corporations of that employer. (b) A union on behalf of its members. (c) An insurance company which is either licensed in this state or acting as an insurer with respect to a policy lawfully issued and delivered by it in and pursuant to the laws of a state in which the insurer was authorized to do an insurance business or prepaid hospital or health care service plan (including their sales representatives licensed in this state when engaged in the performance of their duties). (d) A life or health agent or broker licensed in this state, whose activities are limited exclusively to the sale of insurance. (e) A creditor on behalf of its debtors with respect to insurance covering a debt between the creditor and its debtors. (f) A trust, its trustees, agents, and employees acting thereunder, established in conformity with 29 U.S.C. Sec. 186. (g) A trust exempt from taxation under Section 501(a) of the Internal Revenue Code, its trustees, and employees acting thereunder, or a custodian, its agents and employees acting pursuant to a custodian account which meets the requirements of Section 401(f) of the Internal Revenue Code. (h) A bank, credit union or other financial institution which is subject to supervision or examination by federal or state regulatory authorities. (i) A company which advances for and collects any premium or charge from its credit card holders who have authorized it to do so, provided the company does not adjust or settle claims. (j) A person who adjusts or settles claims in the normal course of his or her practice or employment as an attorney at law, and who does not collect any charge or premium in connection with life or health insurance coverage or annuities. (k) An adjuster licensed by the Insurance Commissioner when engaged in the performance of his or her duties. (l) A nonprofit agricultural association. (m) Any person or entity subject to regulation under Chapter 2.2 (commencing with Section 1340) of Division 2 of the Health and Safety Code. (Amended by Stats. 1984, Ch. 947, Sec. 4. Effective September 10, 1984.)
  109. 1759.1.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5A. Administrators [1759 - 1759.10] ( Chapter 5A added by Stats. 1977, Ch. 998. )

    Verify source ↗

    An administrator may not act without a written agreement with the insurer, and both parties must keep the agreement in their records.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5A. Administrators [1759 - 1759.10] ( Chapter 5A added by Stats. 1977, Ch. 998. ) ## 1759.1. No administrator shall act as such without a written agreement between the administrator and the insurer, and such written agreement shall be retained as part of the official records of both the insurer and the administrator for the duration of the agreement and five years thereafter. Such written agreement shall contain provisions which include the requirements of Sections 1759.2 to 1759.8, inclusive, except insofar as those requirements do not apply to the functions performed by the administrator. Where a policy is issued to a trustee or trustees, a copy of the trust agreement and any amendments thereto shall be furnished to the insurer by the administrator and shall be retained as part of the official records of both the insurer and the administrator for the duration of the policy and five years thereafter. (Added by Stats. 1977, Ch. 998.)
  110. 1759.10.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5A. Administrators [1759 - 1759.10] ( Chapter 5A added by Stats. 1977, Ch. 998. )

    Verify source ↗

    A person may not act or present themselves as an administrator in this state unless they hold a certificate of registration issued by the commissioner; administrators must also comply with Section 1724.5.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5A. Administrators [1759 - 1759.10] ( Chapter 5A added by Stats. 1977, Ch. 998. ) ## 1759.10. A person shall not act as, or hold himself or herself out to be, an administrator in this state, other than an adjuster licensed in this state for the kinds of business for which he or she is acting as an administrator, unless he or she holds a certificate of registration as an administrator issued by the commissioner. The certificate shall be issued, renewed, and held in accordance with, and subject to, all the provisions applicable to a life agent contained in Article 6 (commencing with Section 1666), excluding Section 1672, Article 10 (commencing with Section 1708), Article 11 (commencing with Section 1716), and Article 13 (commencing with Section 1737), excluding Section 1741, of, and subject to the fees applicable to resident life agents as set forth in Article 14 (commencing with Section 1750) of, Chapter 5. Every administrator shall also comply with Section 1724.5. (Amended by Stats. 2012, Ch. 786, Sec. 34. (AB 2303) Effective January 1, 2013.)
  111. 1759.2.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5A. Administrators [1759 - 1759.10] ( Chapter 5A added by Stats. 1977, Ch. 998. )

    Verify source ↗

    If an insurer uses an administrator under a required written contract, payments of premiums or charges made to the administrator count as received by the insurer. Payments of return premiums or claims made by the insurer to the administrator are not treated as paid to the insured or claimant until the insured or claimant actually receives them.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5A. Administrators [1759 - 1759.10] ( Chapter 5A added by Stats. 1977, Ch. 998. ) ## 1759.2. Whenever an insurer utilizes the services of an administrator under the terms of a written contract as required in Section 1759.1, the payment to the administrator of any premiums or charges for insurance by or on behalf of the insured shall be deemed to have been received by the insurer, and the payment of return premiums or claims by the insurer to the administrator shall not be deemed payment to the insured or claimant until such payments are received by the insured or claimant. Nothing herein shall limit any right of the insurer against the administrator resulting from its failure to make payments to the insurer, insureds or claimants. (Added by Stats. 1977, Ch. 998.)
  112. 1759.3.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5A. Administrators [1759 - 1759.10] ( Chapter 5A added by Stats. 1977, Ch. 998. )

    Verify source ↗

    Administrators must keep required books and records, and the commissioner can inspect them and set recordkeeping rules.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5A. Administrators [1759 - 1759.10] ( Chapter 5A added by Stats. 1977, Ch. 998. ) ## 1759.3. (a) Every administrator shall maintain at its principal administrative office for the duration of the written agreement referred to in Section 1759.1 and five years thereafter adequate books and records of all transactions between it, and insurers and insured persons. The books and records shall be maintained in accordance with prudent standards of insurance recordkeeping. The insurer shall retain the right to continuing access to the books and records of the administrator sufficient to permit the insurer to fulfill all of its contractual obligations to insured persons, subject to any restrictions in the written agreement between the insurer and administrator on the proprietary rights of the parties in the books and records. (b) The commissioner shall have access to the books and records for the purpose of examination, audit, and inspection. Any information contained in the books and records, including, but not limited to, the identity and addresses of policyholders and certificateholders, shall be confidential, except the commissioner may use the information in any proceedings instituted against the administrator. (c) The commissioner may, after notice and hearing, promulgate reasonable rules and regulations specifying the manner and type of records to be maintained by administrators. (d) Every administrator shall keep and maintain the books and records required by this section and the regulations promulgated pursuant to this section. Failure to keep or maintain the books and records as required shall be grounds for the suspension or revocation of the certificate of registration of the administrator. The proceeding shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. (Amended by Stats. 1984, Ch. 563, Sec. 4.)
  113. 1759.4.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5A. Administrators [1759 - 1759.10] ( Chapter 5A added by Stats. 1977, Ch. 998. )

    Verify source ↗

    An administrator may use advertising for an insurer’s business only if the insurer has approved it in advance.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5A. Administrators [1759 - 1759.10] ( Chapter 5A added by Stats. 1977, Ch. 998. ) ## 1759.4. An administrator may use only such advertising pertaining to the business underwritten by an insurer as has been approved by such insurer in advance of its use. (Added by Stats. 1977, Ch. 998.)
  114. 1759.5.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5A. Administrators [1759 - 1759.10] ( Chapter 5A added by Stats. 1977, Ch. 998. )

    Verify source ↗

    The agreement must address underwriting or other standards for the insurer’s underwritten business.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5A. Administrators [1759 - 1759.10] ( Chapter 5A added by Stats. 1977, Ch. 998. ) ## 1759.5. The agreement shall make provision with respect to the underwriting or other standards pertaining to the business underwritten by such insurer. (Added by Stats. 1977, Ch. 998.)
  115. 1759.6.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5A. Administrators [1759 - 1759.10] ( Chapter 5A added by Stats. 1977, Ch. 998. )

    Verify source ↗

    An administrator must hold insurance charges, premiums, and return premiums in a fiduciary capacity and handle them through remittance, deposit, recordkeeping, and limited withdrawals.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5A. Administrators [1759 - 1759.10] ( Chapter 5A added by Stats. 1977, Ch. 998. ) ## 1759.6. All insurance charges or premiums collected by an administrator on behalf of or for an insurer or insurers, and return premiums received from such insurer or insurers, shall be held by the administrator in a fiduciary capacity. Such funds shall be immediately remitted to the person or persons entitled thereto, or shall be deposited promptly in a fiduciary bank account established and maintained by the administrator. If charges or premiums so deposited have been collected on behalf of or for more than one insurer, the administrator shall keep records clearly recording the deposits in and withdrawals from such account on behalf of or for each insurer. The administrator shall keep copies of all such records and, upon request of an insurer, shall furnish such insurer with copies of such records pertaining to deposits and withdrawals on behalf of or for such insurer. The administrator shall not pay any claim on behalf of or for such insurer by withdrawals from such fiduciary account. Withdrawals from such account shall be made, as provided in the written agreement between the administrator and the insurer, for (1) remittance to an insurer entitled thereto; (2) deposit in an account maintained in the name of such insurer; (3) transfer to and deposit in a claims paying account, with claims on behalf of or for such insurer to be paid as provided in Section 1759. 7; (4) payment to a group policyholder for remittance to the insurer entitled thereto; (5) payment to the administrator of its commission, fees or charges; or (6) remittance of return premiums to the person or persons entitled thereto. (Amended by Stats. 1978, Ch. 280.)
  116. 1759.7.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5A. Administrators [1759 - 1759.10] ( Chapter 5A added by Stats. 1977, Ch. 998. )

    Verify source ↗

    The administrator must pay claims from insurer-collected funds only by check or draft, or by electronic funds transfer if the insured consents and the insurer authorizes it.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5A. Administrators [1759 - 1759.10] ( Chapter 5A added by Stats. 1977, Ch. 998. ) ## 1759.7. All claims paid by the administrator from funds collected on behalf of the insurer shall be paid only on checks or drafts of, or, with the consent of the insured, by an electronic funds transfer from, and as authorized by the insurer. (Amended by Stats. 2009, Ch. 433, Sec. 12. (AB 328) Effective January 1, 2010.)
  117. 1759.8.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5A. Administrators [1759 - 1759.10] ( Chapter 5A added by Stats. 1977, Ch. 998. )

    Verify source ↗

    If an administrator adjusts or settles claims for a policy, the administrator’s compensation for that policy cannot depend on claim experience.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5A. Administrators [1759 - 1759.10] ( Chapter 5A added by Stats. 1977, Ch. 998. ) ## 1759.8. With respect to any policies where an administrator adjusts or settles claims, the compensation to the administrator with regard to such policies shall in no way be contingent on claim experience. (Added by Stats. 1977, Ch. 998.)
  118. 1759.9.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5A. Administrators [1759 - 1759.10] ( Chapter 5A added by Stats. 1977, Ch. 998. )

    Verify source ↗

    If an administrator is used, it must give insured individuals an insurer-approved written notice explaining who the administrator is and how it relates to the policyholder and insurer. If the administrator collects funds, it must separately state in writing any insurance charge or premium and the amount specified by the insurer.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5A. Administrators [1759 - 1759.10] ( Chapter 5A added by Stats. 1977, Ch. 998. ) ## 1759.9. Where the services of an administrator are utilized, the administrator shall provide a written notice approved by the insurer, to insured individuals, advising them of the identity of and relationship among the administrator, the policyholder and the insurer. Where an administrator collects funds, it must identify and state separately in writing to the person paying to the administrator any charge or premium for insurance coverage the amount of any such charge or premium specified by the insurer for such insurance coverage. (Added by Stats. 1977, Ch. 998.)
  119. 1760.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    A home state insured may place insurance with a nonadmitted insurer, and if it does so under this chapter it must pay the tax imposed by the Revenue and Taxation Code. The section is operative on January 1, 2018.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## 1760. (a) A home state insured, as defined in subdivision (f) of Section 1760.1, may negotiate and effect insurance to protect himself, herself, or itself against loss, damage, or liability with any nonadmitted insurer. (b) Every home state insured that effects insurance governed by this chapter shall pay the tax imposed by Part 7.5 (commencing with Section 13201) of Division 2 of the Revenue and Taxation Code. (c) This section shall become operative on January 1, 2018. (Repealed (in Sec. 1) and added by Stats. 2012, Ch. 713, Sec. 2. (AB 480) Effective January 1, 2013. Section operative January 1, 2018, by its own provisions.)
  120. 1760.1.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    This section defines terms used in Chapter 6 on surplus line brokers.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## 1760.1. For the purposes of this chapter, the following terms have the following definitions: (a) “Certified” means an originally signed or sealed statement, dated not more than 60 days before submission, made by a public official or other person, attached to a copy of a document, that attests that the copy is a true copy of the original, and that the original is in the custody of the person making the statement. (b) “Commercial insured” means any person purchasing commercial insurance that, at the time of placement, meets all of the following requirements: (1) The person employs or retains a qualified risk manager to negotiate insurance coverage. (2) The person has paid aggregate nationwide commercial property and casualty insurance premiums in excess of one hundred thousand dollars ($100,000) in the immediately preceding 12 months. (3) (A) The person meets at least one of the following criteria: (i) The person possesses a net worth in excess of twenty million dollars ($20,000,000), as that amount is adjusted pursuant to subparagraph (B). (ii) The person generates annual revenues in excess of fifty million dollars ($50,000,000), as that amount is adjusted pursuant to subparagraph (B). (iii) The person employs more than 500 full-time or full-time equivalent employees per individual insured or is a member of an affiliated group employing more than 1,000 employees in the aggregate. (iv) The person is a not-for-profit organization or public entity generating annual budgeted expenditures of at least thirty million dollars ($30,000,000), as that amount is adjusted pursuant to subparagraph (B). (v) The person is a municipality with a population in excess of 50,000 persons. (B) Effective on January 1, 2015, and each fifth January 1 occurring thereafter, the dollar amounts in subparagraph (A) shall be adjusted to reflect the percentage change for that five-year period in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics of the United States Department of Labor. The commissioner shall issue a bulletin to all surplus line brokers advising of any adjustments and may adopt the calculations of the NAIC or other entity in doing so. (c) “Domiciliary jurisdiction” means the state, nation, or subdivision thereof under the laws of which an insurer is incorporated or otherwise organized. (d) “Domiciliary state of the syndicate’s trust” means the state in which the syndicate’s trust fund is principally maintained and administered for the benefit of the syndicate’s policyholders in the United States. (e) “Home state” means, except as provided in paragraphs (2) to (4), inclusive, any of the following, with respect to an insured or applicant: (1) (A) The state in which the insured maintains its principal place of business or, in the case of an individual, the individual’s principal residence. (B) If 100 percent of the insured risk is located outside the state referred to in subparagraph (A), the state to which the greatest percentage of the insured’s taxable premium for that insurance contract is allocated. (2) “Principal place of business” means, with respect to subparagraph (A) of paragraph (1) determining the home state of the insured, (A) the state where the insured maintains its headquarters and where the insured’s high-level officers direct, control, and coordinate the business activities; or (B) if the insured’s high-level officers direct, control, and coordinate the business activities in more than one state, the state in which the greatest percentage of the insured’s taxable premium for that insurance contract is allocated; or (C) if the insured maintains its headquarters or the insured’s high-level officers direct, control, and coordinate the business activities outside any state, the state to which the greatest percentage of the insured’s taxable premium for that insurance contract is allocated. (3) “Principal residence” means, with respect to determining the home state of the insured, (A) the state where the insured resides for the greatest number of days during a calendar year; or (B) if the insured’s principal residence is located outside any state, the state to which the greatest percentage of the insured’s taxable premium for that insurance contract is allocated. (4) Affiliated groups. If more than one insured from an affiliated group are named insureds on a single nonadmitted insurance contract, the term “home state” means the home state, as determined pursuant to subparagraph (A) of paragraph (1), of the member of the affiliated group that has the largest percentage of premium attributed to it under such insurance contract. (f) “Home state insured” or “home state insured applicant” means a person whose home state is California and who has received a certificate or evidence of coverage as set forth in Section 1764 or a policy as issued by an eligible surplus line insurer, or a person who is an applicant therefor. (g) “IID” means the International Insurers Department of the National Association of Insurance Commissioners. (h) “Insurer” means, unless the context indicates otherwise, “nonadmitted” insurers that are either “foreign” or “alien” insurers, as those terms are defined in Sections 25, 27, and 1580, and syndicates whose members consist of individual incorporated insurers who are not engaged in any business other than underwriting as a member of the group and individual unincorporated insurers, provided all the members are subject to the same level of solvency regulation and control by the group’s domiciliary regulator. The term “insurer” includes all nonadmitted insurers selling insurance to or through purchasing groups as defined in the federal Liability Risk Retention Act of 1986 (15 U.S.C. Sec. 3901 et seq.) and the California Risk Retention Act of 1991 (Chapter 1.5 (commencing with Section 125) of Part 1), except insurers that are risk retention groups as defined by those acts. (i) “ISI” means Insurance Solvency International. (j) “Licensee” means a surplus line broker as defined in Section 47. (k) “Multistate risk” means a risk covered by a nonadmitted insurer with insured exposures in more than one state. (l) “NAIC” means the National Association of Insurance Commissioners or its successor organization. (m) “Nonadmitted insurance” means any property and casualty insurance permitted to be placed directly or through a surplus line broker with a nonadmitted insurer eligible to accept such insurance. (n) “Nonadmitted insurer” means an insurer not licensed or admitted to engage in the business of insurance in this state in conformity with Section 700; but does not include a risk retention group, as that term is defined in Sections 130(k) and 2(a)(4) of the federal Liability Risk Retention Act of 1986 (15 U.S.C. Sec. 3901(a)(4)). (o) “Qualified risk manager” means, with respect to a policyholder of commercial insurance, a person who meets all of the following requirements: (1) The person is an employee of, or third-party consultant retained by, the commercial policyholder. (2) The person provides skilled services in loss prevention, loss reduction, or risk and insurance coverage analysis, and purchase of insurance. (3) The person has any of the following: (A) A bachelor’s degree or higher degree from an accredited college or university in risk management, business administration, finance, economics, or any other field determined by the commissioner to demonstrate minimum competence in risk management and satisfies either of the following: (i) Has three years of experience in risk financing, claims administration, loss prevention, risk and insurance analysis, or purchasing commercial lines of insurance. (ii) Has one of the following: (I) A designation as a Chartered Property and Casualty Underwriter (CPCU) issued by the American Institute for CPCU and Insurance Institute of America. (II) A designation as an Associate in Risk Management (ARM) issued by the American Institute for CPCU and Insurance Institute of America. (III) A designation as Certified Risk Manager (CRM) issued by the National Alliance for Insurance Education and Research. (IV) A designation as a RIMS Fellow (RF) issued by the Global Risk Management Institute. (V) Any other designation, certification, or license determined by the commissioner to demonstrate minimum competency in risk management. (B) At least seven years of experience in risk financing, claims administration, loss prevention, risk and insurance coverage analysis, or purchasing commercial lines of insurance, and has any one of the designations specified in subclauses (I) to (V), inclusive, of clause (ii) of subparagraph (A). (C) At least 10 years of experience in risk financing, claims administration, loss prevention, risk and insurance coverage analysis, or purchasing commercial lines of insurance. (D) A graduate degree from an accredited college or university in risk management, business administration, finance, economics, or any other field determined by the commissioner to demonstrate minimum competence in risk management. (p) “State” means any state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, Guam, the Northern Mariana Islands, the Virgin Islands, and American Samoa. (q) “Verified” means a document or copy accompanied by an originally signed statement, dated not more than 60 days before submission, from a responsible executive or official who has authority to provide the statement and knowledge whereof he or she speaks, attesting either under oath before a notary public, or under the penalty of perjury under California law, that the assertions made in the document are true. (Amended by Stats. 2012, Ch. 162, Sec. 103. (SB 1171) Effective January 1, 2013.)
  121. 1760.2.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    A surplus line broker must determine whether an applicant for nonadmitted insurance is a California home state insured.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## 1760.2. The surplus line broker shall be responsible for determining whether an applicant for nonadmitted insurance is a California home state insured. A surplus line broker who reasonably relies on information provided in good faith by the applicant, whether directly or through the producer, shall be deemed to be in compliance with this requirement. (Added by Stats. 2011, Ch. 83, Sec. 10. (AB 315) Effective July 15, 2011. Operative July 21, 2011, by Sec. 34 of Stats. 2011, Ch. 83.)
  122. 1760.5.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    Certain surplus-line insurance placements are exempt, but special lines’ surplus line brokers must meet licensing and reporting duties, respond to commissioner requests, and avoid placements after an order forbidding further business with a nonadmitted insurer.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## 1760.5. (a) The provisions of this chapter limiting the insurance that may be placed with nonadmitted insurers and requiring any report thereof shall not apply to: (1) Reinsurance of the liability of an admitted insurer. (2) Insurance against perils of navigation, transit, or transportation upon hulls, freights or disbursements, or other shipowner interests; upon goods, wares, merchandise, and all other personal property and interests therein, in the course of exportation from or importation into any country, or transportation coastwise, including transportation by land or water from point of origin to final destination and including war risks; and marine builder’s risks, drydocks, and marine railways, including insurance of ship repairer’s liability, and protection and indemnity insurance, but excluding insurance covering bridges or tunnels. (3) Aircraft or spacecraft insurance. (4) Insurance on property or operations of railroads engaged in interstate commerce. (b) The insurance specified in paragraphs (2), (3), and (4) of subdivision (a) may be placed with a nonadmitted insurer for a home state insured only by and through a special lines’ surplus line broker. The license of a special lines’ surplus line broker shall be applied for and procured and shall be subject to the same fees for filing on issuance in the same manner as the license of a surplus line broker, except that in lieu of the bond required by Section 1765, there shall be delivered to the commissioner a bond in the form, amounts, and conditions specified in Sections 1663 and 1665 for an insurance broker and only one fee shall be collected from one person for both licenses. The licensee in respect to the business shall be subject to all the provisions of this chapter except Sections 1761, 1763, 1765.1, 1765.2, and 1775.5. (c) The commissioner may address to any licensed special lines’ surplus line broker a written request for full and complete information respecting the financial stability, reputation, and integrity of any nonadmitted insurer with whom the licensee has dealt or proposes to deal in the transaction of insurance specified in paragraph (2), (3), or (4) of subdivision (a). The licensee so addressed shall promptly furnish in written or printed form so much of the information requested as he or she can produce together with a signed statement identifying the same and giving reasons for omissions, if any. After due examination of the information and accompanying statement, the commissioner may, if he or she believes it to be in the public interest, order in writing the licensee to place no further insurance business for home state insureds with that nonadmitted insurer on behalf of any person. Any placement with that nonadmitted insurer made by a licensee after receipt of the order is a violation of this chapter. The commissioner may issue an order if he or she finds that a nonadmitted insurer with whom the licensee has dealt or proposes to deal in the transaction of insurance is in an unsound financial condition, is disreputable, or is lacking in integrity. The order shall also include notice of a hearing to be held at a time and place fixed therein, which shall be not less than 20 nor more than 30 days from service of the order upon the licensee. (d) The commissioner may, in respect to business written or placed under the provisions of this section, require information and reports thereof that the commissioner considers necessary, convenient, or advisable. (e) Each placing of insurance in violation of this chapter is a misdemeanor. (f) The commissioner may revoke, suspend, or deny any license granted pursuant to this code in accordance with the procedure provided in Article 13 (commencing with Section 1737) of Chapter 5, or any certificate of authority granted pursuant to this code in accordance with the procedure provided in Section 704 whenever the commissioner finds that the licensee or holder of the certificate has committed a violation of this section. (g) The premium for insurance placed by or through a special lines’ surplus line broker pursuant to this section shall not be subject to the tax imposed upon the broker based upon gross premiums paid for insurance placed under authority conferred by the license. (h) Special lines’ surplus line brokers may advertise and solicit in conformity with Section 1773, except that they are not subject to the limitation that any nonadmitted insurer’s name appearing in the advertisements or solicitations must be eligible under Section 1765.1. (Amended by Stats. 2011, Ch. 83, Sec. 11. (AB 315) Effective July 15, 2011. Operative July 21, 2011, by Sec. 34 of Stats. 2011, Ch. 83.)
  123. 1760.6.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    This section defines “spacecraft” for Section 1760.5.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## 1760.6. For purposes of Section 1760.5, “spacecraft” means missiles, satellites, staffed and unstaffed space vehicles, any objects intended for launch, or objects launched or assembled in outer space, including, but not limited to, the space shuttle and any transportation, communication, information, or other system intended to be employed in outer space, together with related equipment, devices, components, and parts. (Added by Stats. 1998, Ch. 370, Sec. 1. Effective January 1, 1999.)
  124. 1760.7.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    The commissioner may direct special lines’ surplus line brokers not to place further business for a home state insured with an insurer whose eligibility has been withdrawn under Section 1765.1.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## 1760.7. In addition to the authority granted by Section 1760.5, the commissioner has the discretion to direct special lines’ surplus line brokers to not place further business for a home state insured with an insurer whose eligibility has been withdrawn pursuant to Section 1765.1. (Amended by Stats. 2011, Ch. 83, Sec. 12. (AB 315) Effective July 15, 2011. Operative July 21, 2011, by Sec. 34 of Stats. 2011, Ch. 83.)
  125. 1761.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    A person in the state generally may not transact insurance for a home state insured with nonadmitted insurers unless done through a licensed surplus line broker and under this chapter’s terms.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## 1761. (a) Except as provided in Sections 1760 and 1760.5, and paragraphs (1) and (2) of subdivision (b), a person within this state shall not transact any insurance for a home state insured with nonadmitted insurers, except by and through a surplus line broker licensed under this chapter and upon the terms and conditions prescribed in this chapter. (b) (1) An insurer domiciled in California may have common directors with an affiliated nonadmitted insurer provided these common directors do not constitute the majority of the voting authority of the nonadmitted insurer and do not perform any management functions for the nonadmitted insurer in California. (2) An insurer domiciled in California may perform the following administrative services on behalf of an affiliated nonadmitted insurer that has qualified as an eligible surplus line insurer pursuant to Section 1765.1: (A) Computer operations that are unrelated to the underwriting process, which may include such activities as development and maintenance of application software, databases, and servers, procurement of information technology and services, network operations, and Internet Web site development and support. (B) Clerical and administrative staffing support, provided that this staff shall not have any contact or interaction with policyholders of the nonadmitted insurer. (C) Human resources, provided that any decisions relating to the hiring, firing, disciplinary actions, or compensation of any employee, officer, or both, of the nonadmitted insurer shall be made directly by the nonadmitted insurer. (D) Claims adjusting, as described in Section 14021, except that all claims notices, claims-related decisions, including those relating to setting reserves and claims acceptance, claim payments, and settlements shall be made directly by the affiliated nonadmitted insurer. (E) Managing investments such as buying, maintaining, and selling financial investment instruments, except that decisions relating to investment goals, risk assumptions such as capital preservation and protection of investment principal, determining liquidity needs, and diversification ratios shall be made by the affiliated nonadmitted insurer. (3) Nothing in this section permits the nonadmitted insurer to conduct any activity through its affiliate that constitutes the transaction of insurance or a violation of Section 700 or 703. (Amended by Stats. 2011, Ch. 83, Sec. 13. (AB 315) Effective July 15, 2011. Operative July 21, 2011, by Sec. 34 of Stats. 2011, Ch. 83.)
  126. 1762.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    For specified sections, “certificate” means a surplus line broker certificate as defined in Section 48.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## 1762. For purposes of Sections 1764, 1764.1, and 1764.3, the term “certificate” means a surplus line broker certificate as defined in Section 48. (Added by Stats. 1999, Ch. 255, Sec. 3. Effective January 1, 2000.)
  127. 1763.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    Surplus line brokers may place certain insurance with nonadmitted insurers only after a diligent search of admitted insurers, and they must file reports and forms with the commissioner.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## 1763. (a) A surplus line broker may solicit and place insurance for a home state insured, other than as excepted in Section 1761, with nonadmitted insurers only if that insurance cannot be procured from insurers admitted for the particular class or classes of insurance and that actually write the particular type of insurance in this state. Each surplus line broker shall be responsible to ensure that a diligent search is made among insurers that are admitted to transact and are actually writing the particular type of insurance in this state before procuring the insurance for a home state insured from a nonadmitted insurer. Each surplus line broker shall file with the commissioner or his or her designee, within 60 days of placing any insurance for a home state insured with a nonadmitted insurer, a written report that shall be kept confidential, regarding the insurance. This report shall include the name and address of the insured, verification that the insured is a home state insured, the identity of the insurer or insurers, a description of the subject and location of the risk, the amount of premium charged for the insurance, a copy of the declarations page of the policy or a copy of the surplus line broker’s certificate or binder evidencing the placement of insurance, and other pertinent information that the commissioner may reasonably require. In addition, each surplus line broker shall file a standardized form to be prescribed by the commissioner setting forth the diligent efforts to place the coverage with admitted insurers and the results of these efforts. The form shall be signed by a person licensed under this code who has made the diligent search required by this section or who supervised an unlicensed person or persons who actually conducted the search. The insurance shall not be placed with a nonadmitted insurer for the purpose of procuring a rate lower than the lowest rate that will be accepted by any admitted insurer except as provided by subdivision (c). The commissioner may make and publish reasonable rules and regulations, consistent with this chapter, in respect to transactions governed thereby and the basis or bases for his or her determinations hereunder. (b) It shall be prima facie evidence that a diligent search among admitted insurers has been made if the standardized form filed as required by subdivision (a) establishes that three admitted insurers that actually write the particular type of insurance in this state have declined the risk, or that fewer than three admitted insurers actually write the particular type of insurance. The commissioner, or his or her designee, may review the form for the accuracy of the information provided on it, including, but not limited to, whether the listed insurers actually write that type of insurance, and whether the three insurers declined the risk. The commissioner may take disciplinary action against the person signing the form for any misrepresentation made in the form due to the negligence of or the result of an intentional act by that person or the person or persons who actually conducted the search. Those actions may include any action authorized to be taken against a licensed person by this code. Nothing in this subdivision shall preclude the commissioner or his or her designee from directing the surplus line broker to conduct a further or additional search among admitted insurers for similar placements in the future. (c) It shall be conclusively presumed that insurance is placed in violation of this section if the insurance is actually placed with a nonadmitted insurer at a lower rate of premium or lower premium than the lowest rate of premium or the lowest premium that could be obtained from an admitted insurer unless, at the time the insurance attaches, there is filed with the commissioner a statement describing the insurance, specifying the rate and the nearest procurable rates from admitted insurers. The statement shall include an explanation of the reasons that the insurance must be placed with a nonadmitted insurer even though it is available from an admitted insurer. Unless the commissioner, or his or her designee, within five days after that filing notifies the filing broker that in his or her opinion the placing of the insurance constitutes a violation of this section, the broker may thereafter maintain in effect that insurance. If within that five-day period the commissioner notifies the surplus line broker that the insurance is in violation of this section and orders the broker to effect termination of that insurance within 10 days from the notice, and the broker fails or refuses to effect that termination, that failure or refusal is a violation of this section. (d) Statements filed under this section are not subject to public inspection unless the commissioner determines that the public interest or the welfare of the filing broker requires that any statement be made public. (e) For purposes of this section, “type of insurance” means the hazard or combination of hazards covered by a contract of insurance. (f) Notwithstanding subdivision (a), this section shall not apply to insurance issued or delivered in this state to a home state insured by a nonadmitted Mexican insurer by and through a surplus line broker affording coverage exclusively in the Republic of Mexico on property located temporarily or permanently in, or operations conducted temporarily or permanently within, the Republic of Mexico. (g) This section does not apply to the extension of coverage by a nonadmitted insurer, of or for the same risks, and to the same insured under an existing surplus lines policy. Such an extension may not exceed 90 days in the aggregate during any 12-month period. The extension may not include a change in coverage, terms, and conditions, or limits. Any additional premium charged for the extension shall be determined pro rata, based on the same rate of premium as the existing surplus lines policy. (h) (1) The diligent search requirement set forth in subdivision (a) shall not apply to a commercial insured as defined in subdivision (b) of Section 1760.1 when both of the following occur: (A) The surplus line broker procuring or placing the surplus line insurance has disclosed in writing to the commercial insured that surplus insurance may or may not be available from the admitted market that may provide greater protection with more regulatory oversight. (B) The commercial insured has subsequently requested in writing that the surplus line broker procure or place surplus insurance from a nonadmitted insurer. (2) The surplus line broker shall be responsible to ensure that the applicant is a commercial insured. A surplus line broker who reasonably relies on information provided in good faith by the applicant, whether directly or through a producer, shall be deemed to be in compliance with this requirement. (Amended by Stats. 2012, Ch. 162, Sec. 104. (SB 1171) Effective January 1, 2013.)
  128. 1763.1.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    The commissioner may declare certain insurance coverages or risks permissible for placement with a nonadmitted insurer and exempt them from most Section 1763 requirements, but must keep an export list, give notice, and hold hearings.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## 1763.1. (a) The commissioner may by order declare permissible for placement for a home state insured with a nonadmitted insurer and exempt from all requirements of Section 1763 except the filing of a confidential written report, any type of insurance coverage or risk for which he or she finds, after a public hearing, that there is not a reasonable or adequate market among admitted insurers or that the type of coverage is for new, innovative products for which a reasonable or adequate market among admitted insurers has not had time to develop. The commissioner or his or her designee shall maintain an export list showing all those exempt coverages and risks. Additions to the export list may be made after a hearing, which may take place one or more times each year as deemed necessary by the commissioner. A public hearing shall be held annually or more often at the commissioner’s discretion and reasonable notice of a hearing shall be given to all interested parties including surplus line brokers, admitted insurers, trade associations representing admitted insurers, agents and brokers, and consumer groups. The hearing and findings shall not be required to be conducted in accordance with Chapter 3.5 (commencing with Section 11340) and Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. An order by the commissioner shall continue in effect until terminated by the commissioner. Where the commissioner receives written comments or testimony or otherwise determines, prior to a hearing, that a type of insurance on the export list is more available, in the admitted market, the commissioner may remove the type of insurance from the list. The permissibility of any type of insurance to remain on the list is subject to an annual affirmative finding by the commissioner, however, when written comment or testimony is received prior to a hearing, the permissibility of that type of insurance to remain on the export list shall be reviewed at the next hearing and that type of insurance may not remain on the export list without an affirmative decision by the commissioner or his or her designee that there is not a reasonable or adequate market among admitted insurers. The commissioner or his or her designee shall notify all surplus line brokers of any removal. For purposes of this section, the commissioner shall not be authorized to include on the export list as permissible for placement with a nonadmitted insurer, automobile or motor vehicle liability insurance, insurance on residential property, as defined under Section 10087, or any insurance written by the California FAIR plan. (b) The surplus line advisory organization authorized by Chapter 6.1 (commencing with Section 1780.50) shall pay the costs for a maximum of two public hearings per year held by the commissioner or his or her designee pursuant to this section. (c) Except for the removal of a type of insurance from the export list pursuant to subdivision (a), nothing in this section shall authorize the commissioner to declare any type of insurance impermissible for exportation. (Amended by Stats. 2017, Ch. 477, Sec. 1. (AB 1641) Effective January 1, 2018.)
  129. 1763.2.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    A licensed surplus line broker may originate or accept surplus lines business and may pay the licensees involved. The originating licensee must use due care and diligence when collecting, preparing, and transmitting related information to the broker.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## 1763.2. (a) A licensed surplus line broker may originate surplus lines business, or may accept that business from any other originating licensee duly licensed for the type or types of insurance involved, and may compensate those licensees therefor. (b) For any information involved in any insurance transaction described in subdivision (a), or involved in the eligibility of the risk for placement with a surplus line broker, the originating licensee shall use due care and diligence in the collection, preparation, and transmission of the information to the surplus line broker. (Amended by Stats. 2006, Ch. 538, Sec. 457. Effective January 1, 2007.)
  130. 1763.5.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    A surplus line broker must not solicit or place certain private passenger automobile insurance with a nonadmitted insurer unless the required California Automobile Assigned Risk Plan application was submitted and the plan found the application ineligible and notified the broker or insured in writing.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## 1763.5. In addition to the requirements of Section 1763, no surplus line broker shall solicit from, or place with, any nonadmitted insurer, any insurance covering private passenger automobiles if that insurance contains in whole or in part the limits of coverage provided under the California Automobile Assigned Risk Plan unless the surplus line broker, producing agent, broker, or insured has first submitted to the California Automobile Assigned Risk Plan a properly completed and executed application in accordance with the requirements of the plan for the coverage provided by the plan and the plan itself has determined that the application is ineligible for the limits of coverage applied for and so notifies the surplus line broker or insured in writing. For purposes of this section, a private passenger automobile includes motorcycles, but does not include a fleet of five or more automobiles rated for business use and used in a business. (Added by Stats. 1993, Ch. 1134, Sec. 1.5. Effective January 1, 1994.)
  131. 1764.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    A licensed surplus line broker may issue evidence of insurance for a home state insured, and may issue policies only with prior written authority. If certificates or policies are issued, they must meet specified naming, signature, content, and countersignature requirements.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## 1764. (a) A licensed surplus line broker may issue evidence of insurance for a home state insured, including binders, covernotes, and certificates evidencing the placement of insurance with an eligible nonadmitted insurer, and with prior written authority, may issue policies of the insurer. (b) Certificates may be issued pursuant to subdivision (a) or (b) of Section 1764.2. The certificates shall be in the name of the surplus line broker and not in the name of the nonadmitted insurer, shall be signed by the surplus line broker, and shall contain all of the matters specified in Insurance Code Section 381. (c) Policies may only be issued pursuant to subdivision (a) of Section 1764.2. The policies shall contain all of the matters specified in Section 381 and shall be countersigned by the surplus line broker. (Amended by Stats. 2011, Ch. 83, Sec. 16. (AB 315) Effective July 15, 2011. Operative July 21, 2011, by Sec. 34 of Stats. 2011, Ch. 83.)
  132. 1764.1.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    Surplus line insurers and brokers must get and keep the applicant’s signed disclosure, provide the required notice, and follow special cancellation and recordkeeping rules.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## 1764.1. (a) (1) Every nonadmitted insurer, in the case of insurance to be purchased by a home state insured pursuant to Section 1760, and surplus line broker, in the case of any insurance with a nonadmitted carrier for a home state insured to be transacted by the surplus line broker, shall be responsible to ensure that, at the time of accepting an application for an insurance policy, other than a renewal of that policy, issued by a nonadmitted insurer, the signature of the applicant on the disclosure statement set forth in subdivision (b) is obtained. In fulfillment of this responsibility, the nonadmitted insurer and the surplus line broker may rely, if it is reasonable under all the circumstances to do so, on the disclosure statement received from a licensee involved in the transaction as prima facie evidence that the disclosure statement and appropriate signature from the applicant have been obtained. The surplus line broker shall maintain a copy of the signed disclosure statement in the broker’s records for a period of at least five years. These records shall be made available to the commissioner and the insured upon request. This disclosure shall be signed by the applicant, and is not subject to a limited power of attorney agreement between the applicant and an agent or broker or a surplus line broker. The disclosure statement shall be in boldface 16-point type on a freestanding document. In addition, every policy issued by a nonadmitted insurer and every certificate evidencing the placement of insurance shall contain, or have affixed to it by the insurer or surplus line broker, the disclosure statement set forth in subdivision (b) in boldface 16-point type on the front page of the policy. (2) In a case in which the applicant has not received and completed the signed disclosure form required by this section, the applicant may cancel the insurance so placed. The cancellation shall be on a pro rata basis as to premium, and the applicant shall be entitled to the return of any broker’s fees charged for the placement. (b) The following notice shall be provided to home state insureds and home state insured applicants for insurance as provided by subdivision (a), and shall be printed in English and in the language principally used by the surplus line broker and nonadmitted insurer to advertise, solicit, or negotiate the sale and purchase of surplus line insurance. The surplus line broker and nonadmitted insurer shall use the appropriate bracketed language for application and issued policy disclosures: ## “IMPORTANT NOTICE: 1. The insurance policy that you [have purchased] [are applying to purchase] is being issued by an insurer that is not licensed by the State of California. These companies are called “nonadmitted” or “surplus line” insurers. 2. The insurer is not subject to the financial solvency regulation and enforcement that apply to California licensed insurers. 3. The insurer does not participate in any of the insurance guarantee funds created by California law. Therefore, these funds will not pay your claims or protect your assets if the insurer becomes insolvent and is unable to make payments as promised. 4. The insurer should be licensed either as a foreign insurer in another state in the United States or as a non-United States (alien) insurer. You should ask questions of your insurance agent, broker, or “surplus line” broker or contact the California Department of Insurance at the toll-free number 1-800-927-4357 or internet website www.insurance.ca.gov. Ask whether or not the insurer is licensed as a foreign or non-United States (alien) insurer and for additional information about the insurer. You may also visit the NAIC’s internet website at www.naic.org. The NAIC—the National Association of Insurance Commissioners—is the regulatory support organization created and governed by the chief insurance regulators in the United States. 5. Foreign insurers should be licensed by a state in the United States and you may contact that state’s department of insurance to obtain more information about that insurer. You can find a link to each state from this NAIC internet website: https://naic.org/state_web_map.htm. 6. For non-United States (alien) insurers, the insurer should be licensed by a country outside of the United States and should be on the NAIC’s International Insurers Department (IID) listing of approved nonadmitted non-United States insurers. Ask your agent, broker, or “surplus line” broker to obtain more information about that insurer. 7. California maintains a “List of Approved Surplus Line Insurers (LASLI).” Ask your agent or broker if the insurer is on that list, or view that list at the internet website of the California Department of Insurance: www.insurance.ca.gov/01-consumers/120-company/07-lasli/lasli.cfm. 8. If you, as the applicant, required that the insurance policy you have purchased be effective immediately, either because existing coverage was going to lapse within two business days or because you were required to have coverage within two business days, and you did not receive this disclosure form and a request for your signature until after coverage became effective, you have the right to cancel this policy within five days of receiving this disclosure. If you cancel coverage, the premium will be prorated and any broker’s fee charged for this insurance will be returned to you.” (c) When a contract is issued to an industrial insured, neither the nonadmitted insurer nor the surplus line broker is required to provide the notice required in this section except on the confirmation of insurance, the certificate of placement, or the policy, whichever is first provided to the insured, nor is the insurer or surplus line broker required to obtain the insured’s signature. The producer shall ensure that the notice affixed to the confirmation of insurance, certificate of placement, or the policy is provided to the insured. The producer shall insert the current toll-free telephone number of the Department of Insurance as provided in paragraph 4 of the notice. (1) An industrial insured is an insured that does both of the following: (A) Employs at least 25 employees on average during the prior 12 months. (B) Has aggregate annual premiums for insurance for all risks other than workers’ compensation and health coverage totaling no less than twenty-five thousand dollars ($25,000) or obtains insurance through the services of a full-time employee acting as an insurance manager or a continuously retained insurance consultant. A “continuously retained insurance consultant” does not include: (i) an agent or broker through whom the insurance is being placed, (ii) a subagent or subproducer involved in the transaction, or (iii) an agent or broker that is a business organization employing or contracting with a person mentioned in clauses (i) and (ii). (2) The surplus line broker shall be responsible for ensuring that the applicant is an industrial insured. A surplus line broker who reasonably relies on information provided in good faith by the applicant, whether directly or through the producer, shall be deemed to be in compliance with this requirement. (d) For purposes of compliance with the requirement of subdivision (a) that the signature of the applicant be obtained, the following shall apply: (1) If the insurance transaction is not conducted at an in-person, face-to-face meeting, the applicant’s signature on the disclosure form may be transmitted by the applicant to the agent or broker via facsimile or comparable electronic transmittal. (2) In the case of commercial lines coverage, or personal insurance coverage subject to Section 675 and any umbrella coverage associated therewith, where an applicant requires that insurance coverage be bound immediately, either because existing coverage will lapse within two business days of the time the insurance is bound or because the applicant is required to have coverage in place within two business days, and the applicant cannot meet in person with the agent or broker to sign the disclosure form, the agent or broker may obtain the signature of the applicant within five days of binding coverage, provided that the applicant may cancel the insurance so placed within five days of receiving the disclosure form from the agent or broker. The cancellation shall be on a pro rata basis, and the applicant shall be entitled to the rescission or return of any broker’s fees charged for the placement. When a policy is canceled, the broker shall inform the applicant that the broker’s fee must be returned and that the premium must be prorated. (e) Notwithstanding subdivision (a), this section shall not apply to insurance issued or delivered in this state by a nonadmitted Mexican insurer by and through a surplus line broker affording coverage exclusively in the Republic of Mexico on property located temporarily or permanently in, or operations conducted temporarily or permanently within, the Republic of Mexico. (Amended by Stats. 2019, Ch. 201, Sec. 9. (AB 1813) Effective January 1, 2020.)
  133. 1764.2.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    A surplus line broker may not issue evidence of insurance, cause a risk to be insured by a nonadmitted insurer, or tell certain insureds that coverage has been or will be obtained from a nonadmitted insurer unless one of the listed conditions is met.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## 1764.2. No surplus line broker shall issue any evidence of insurance or cause or purport to cause any risk to be insured by a nonadmitted insurer or advise any home state insured or home state insured applicant for insurance that coverage has been or will be obtained from a nonadmitted insurer unless: (a) The broker has prior written authority from the nonadmitted insurer to cause the risk to be insured; (b) The broker has received advice in the ordinary course of business that the coverage has been obtained; or (c) A policy of insurance covering the insured for the risk has actually been issued by the nonadmitted insurer and delivered to the insured or his or her representative. (Amended by Stats. 2011, Ch. 83, Sec. 18. (AB 315) Effective July 15, 2011. Operative July 21, 2011, by Sec. 34 of Stats. 2011, Ch. 83.)
  134. 1764.3.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    A surplus line broker who relies on advice under Section 1764.2(b) must deliver the policy to the home state insured or the insured’s representative, and if that delivery is not made within 30 days, must deliver specified proof of coverage instead.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## 1764.3. If the surplus line broker acts in reliance on advice received in accordance with subdivision (b) of Section 1764.2, the broker shall deliver the policy to the home state insured or his or her representative, and, if the delivery is not made within 30 days after the date of the issuance of the certificate or upon which the risk has been bound or the home state insured or the home state insured applicant has been advised that coverage has been or will be obtained, he or she shall deliver to the insured either of the following: (a) A photostatic copy of evidence that the insurance has been bound. (b) If the nonadmitted insurer is located outside the United States, a cover note, placing slip, or similar document evidencing coverage issued or certified to by any broker located outside the United States who actually placed that insurance with the nonadmitted insurer. (Amended by Stats. 2011, Ch. 83, Sec. 19. (AB 315) Effective July 15, 2011. Operative July 21, 2011, by Sec. 34 of Stats. 2011, Ch. 83.)
  135. 1764.4.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    Documents referred to in Section 1764.2 must include authentication from all persons taking any risk of loss, and if more than one person is involved, they must state whether the obligation is joint or several and, if several, each person’s share.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## 1764.4. The prior written authority, policy of insurance or copy of evidence that insurance has been bound referred to in Section 1764.2, shall contain authentication by all persons assuming any risk of loss, and, if there is more than one such person, both it and any document issued or certified by the placing broker pursuant to subdivision (b) of Section 1764.3 , shall contain a specification of whether their obligation is joint or several, and if the latter, the proportion of the obligation assumed by each person. (Amended by Stats. 1982, Ch. 454, Sec. 103.)
  136. 1764.5.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    If insurance comes from a transaction that violates Sections 1764.2 to 1764.4, the insurance can be cancelled by the insured or by order of the commissioner, and the cancellation carries no penalty to the insured.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## 1764.5. If insurance results from a transaction in which any provision of Sections 1764.2 to 1764.4 is violated, such insurance is subject to cancellation by the insured or by order of the commissioner. Such cancellation shall be without penalty to the insured. (Added by Stats. 1953, Ch. 467.)
  137. 1764.7.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    A person who willfully violates the listed sections commits a public offense and may be punished by jail, imprisonment, a fine up to $10,000, or both.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## 1764.7. Any person who willfully violates Section 1760.5, 1761, 1763, 1764, 1764.1, 1764.2, 1764.3, 1764.4, 1765.1, 1765.2, 1767, or 1780 is guilty of a public offense and punishable by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code, or in a county jail for not exceeding one year or by fine not exceeding ten thousand dollars ($10,000), or by both. (Amended by Stats. 2011, Ch. 15, Sec. 210. (AB 109) Effective April 4, 2011. Operative October 1, 2011, by Sec. 636 of Ch. 15, as amended by Stats. 2011, Ch. 39, Sec. 68.)
  138. 1765.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    Applicants and licensed surplus line brokers must file the required applications, bond, notices, and training-related filings; the commissioner may issue, discipline, or refuse licenses under stated conditions.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## 1765. (a) A license under this chapter shall be applied for and renewed by the filing with the commissioner of a written application therefor, in accordance with Section 1652. (b) Subject to subdivision (f), the commissioner shall issue a license authorizing any applicant who is trustworthy and competent to transact an insurance brokerage business in a manner as to safeguard the interest of the insured, to act as a surplus line broker from the date of the license until the expiration date specified in Section 1630. (c) An applicant for a surplus line broker’s license shall, as part of the application and a condition of the issuance of the license, file a bond to the people of the State of California in the sum of fifty thousand dollars ($50,000), conditioned that the licensee will fully and faithfully comply with the requirements of this chapter, and all applicable provisions of this code. The bond shall be subject to Sections 1662 and 1663. A surplus line broker bond is not required for an individual licensed as a surplus line broker who transacts only on behalf of a licensed surplus line broker organization. (d) Every applicant for a business entity license, as provided in subdivision (a) of Section 1765.2, shall provide the names of all persons who may exercise the power and perform the duties under the license. Whenever an organization licensed as a surplus line broker desires to change, remove, or add to the natural person or persons who are to transact insurance under authority of its license, it shall immediately file an application or notice with the commissioner for an endorsement changing its license accordingly, on a form prescribed by the commissioner. The fee for adding or removing from any surplus line broker’s license issued to an organization the name of any natural person, named thereon, shall be twenty-nine dollars ($29). The commissioner shall require that the qualifying examination provided by subdivision (a) of Section 1676 be taken by any natural person named by the organization to exercise its agency or brokerage powers who would be required to take and pass the qualifying examination. That natural person or persons and the organization are in all other respects subject to the provisions of this chapter and the insurance laws. (e) The department is authorized to collect additional license fees resulting from the increases in license fees provided by Chapter 29 of the Statutes of 2008 and shall credit any overpayment resulting from reductions in license fees provided by that act. (f) A business entity licensed under this chapter shall provide two hours of appropriate training to its employees who solicit, negotiate, or effect insurance coverage placed by a nonadmitted insurer. The training shall be given to each eligible employee every five years. The surplus line advisory organization authorized pursuant to Chapter 6.1 (commencing with Section 1780.50) shall develop the curriculum for the training. (g) The license shall be renewed in accordance with, and subject to, Sections 1717, 1718, 1719, and 1720. (h) The commissioner may deny, suspend, or revoke any license applied for or granted pursuant to this chapter on all or any one of the grounds and in accordance with the procedures provided in Article 6 (commencing with Section 1666) and Article 13 (commencing with Section 1737) of Chapter 5, whenever the commissioner finds that the applicant or licensee has committed a violation of any provision of this code. (Amended by Stats. 2017, Ch. 534, Sec. 46. (AB 1699) Effective January 1, 2018.)
  139. 1765.1.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    A surplus line broker generally may not place coverage with a nonadmitted insurer for a home state insured unless specific Mexico or eligibility conditions are met.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## 1765.1. No surplus line broker shall place any coverage with a nonadmitted insurer for a home state insured unless the insurer is domiciled in the Republic of Mexico and the placement covers only liability arising out of the ownership, maintenance, or use of a motor vehicle, aircraft, or boat in the Republic of Mexico, or, at the time of placement, the nonadmitted insurer meets the requirements of either subdivision (a) or (b): (a) If the insurer is domiciled in one of the states of the United States or its territories as defined in subdivision (o) of Section 1760.1: (1) Is licensed to write the type of insurance in its domiciliary jurisdiction; and (2) (A) Has capital and surplus that together total forty-five million dollars ($45,000,000). (B) The requirements of subparagraph (A) may be satisfied by an insurer possessing less than forty-five million dollars ($45,000,000) upon an affirmative finding of acceptability by the commissioner. The finding shall be based upon factors such as quality of management, capital and surplus of any parent company, company underwriting profit and investment income trends, market availability, and company record and reputation within the industry. The commissioner is prohibited from making an affirmative finding of acceptability when the foreign insurer’s capital and surplus is less than four million five hundred thousand dollars ($4,500,000); or (C) If a foreign insurer that was listed as an eligible surplus line insurer as of January 1, 2011, and did not have the forty-five million dollars ($45,000,000) of capital and surplus as of January 1, 2011, that insurer shall have at least thirty million dollars ($30,000,000) of capital and surplus as of December 31, 2011, and at least forty-five million dollars ($45,000,000) of capital and surplus as of December 31, 2013. (b) If the insurer is not domiciled in one of the states of the United States or its territories as defined in subdivision (o) of Section 1760.1, the insurer is listed on the Quarterly Listing of Alien Insurers maintained by the NAIC International Insurers Department (IID) and is licensed as an insurer in its domiciliary jurisdiction. (c) If at any time the commissioner determines that an insurer is no longer eligible pursuant to subdivision (a) or (b), the commissioner may issue an order without prior notice and hearing. At the time an order is issued pursuant to this subdivision to an insurer, the commissioner shall notify all surplus line brokers of the order. (d) The commissioner may require, at least annually, the submission of records and statements as are reasonably necessary to ensure that the requirements of this section are maintained. (e) The commissioner shall establish by regulation a schedule of fees to cover costs of administering and enforcing this chapter. (f) (1) Insurance may be placed on a limited basis with insurers not eligible pursuant to this section if all of the following conditions are met: (A) The use of multiple insurers is necessary to obtain coverage for 100 percent of the risk. (B) At least 80 percent of the risk is placed with admitted insurers or insurers that are eligible nonadmitted insurers. (C) The placing surplus line broker submits to the commissioner, or his or her designee, copies of all documentation relied upon by the surplus line broker to make the broker’s determination that the financial stability, reputation, and integrity of the ineligible insurer or insurers, are adequate to safeguard the interest of the insured under the policy. This documentation, and any other documentation regarding the ineligible insurer requested by the commissioner, shall be submitted no more than 30 days after the insurance is placed with the unlisted insurer for the initial placement by that broker with the particular ineligible insurer, and annually thereafter for as long as the broker continues to make placements with the ineligible insurer pursuant to this paragraph. (D) The insured has aggregate annual premiums for all risks other than workers’ compensation or health coverage totaling no less than one hundred thousand dollars ($100,000). (2) Insurance may not be placed pursuant to paragraph (1) if any of the following applies: (A) The ineligible insurer has for any reason been objected to by the commissioner pursuant to this section or has become ineligible. (B) The insurance includes coverage for employer-sponsored medical, surgical, hospital, or other health or medical expense benefits payable to the employee by the insurer. (C) The insurance is mandatory under the laws of the federal government, this state, or any political subdivision thereof, and includes any portion of limits of coverage mandated by those laws. (D) The insured is a multiple employer welfare arrangement, as defined in Section 1002(40)(A) of Title 29 of the United States Code, or any other arrangement among two or more employers that are not under common ownership or control, which is established or maintained for the primary purpose of providing insurance benefits to the employees of two or more employers. (E) Ineligible insurers represent a disproportionate portion of the lower layers of the coverage. (3) Nothing in this section is intended to alter any duties of a surplus line broker pursuant to subdivision (b) of Section 1765 or other laws of this state to safeguard the interests of the insured under the policy in recommending or placing insurance with a nonadmitted insurer. (4) Placements authorized by this subdivision are intended to provide sophisticated insurance purchasers with a means to obtain necessary commercial insurance coverage from nonadmitted insurers that are not eligible in situations where it is not commercially possible to fully obtain that coverage from either admitted or eligible insurers. This subdivision shall not be deemed to permit surplus line brokers to place with nonadmitted insurers common commercial or personal line coverages for insureds that can be placed with insurers that are admitted or eligible pursuant to this section, whether the insured is an individual insured, or a group created primarily for the purpose of purchasing insurance. (g) With respect to a nonadmitted insurer that is listed as an eligible surplus line insurer as of July 21, 2011, pursuant to the former Section 1765.1 as it read prior to July 21, 2011, this section shall not be effective until the subsequent expiration of the policies of that insurer in effect on July 21, 2011. Nothing in the bill that amended this section during the 2011 portion of the 2011–12 Regular Session is intended to repeal or imply there is not authority to adopt, or to have adopted, or to continue in force, any regulation, or part thereof, with respect to surplus line insurance, which is not clearly inconsistent with it. (Amended by Stats. 2012, Ch. 786, Sec. 35. (AB 2303) Effective January 1, 2013.)
  140. 1765.2.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    A surplus line broker may place coverage with a California-approved nonadmitted insurer only if the insurer meets this section’s conditions, and the commissioner oversees approval, listing, updates, and removal.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## 1765.2. A surplus line broker may place any coverage with a California-approved nonadmitted insurer if the insurer is domiciled in the Republic of Mexico and the placement covers only liability arising out of the ownership, maintenance, or use of a motor vehicle, aircraft, or boat in the Republic of Mexico, or if, at the time of placement, the nonadmitted insurer meets the following requirements: (a) (1) Has established its financial stability, reputation, and integrity, for the class of insurance the broker proposes to place, by satisfactory evidence submitted to the commissioner through a surplus line broker. (2) Meets one of the following requirements with respect to its financial stability: (A) Has capital and surplus that together total at least forty-five million dollars ($45,000,000). “Capital” shall be as defined in Section 36. “Surplus” shall be defined as assets exceeding the sum of liabilities for losses reported, expenses, taxes, and all other indebtedness and reinsurance of outstanding risks as provided by law and paid-in capital in the case of an insurer issuing or having outstanding shares of capital stock. The type of assets to be used in calculating capital and surplus shall be as follows: at least twenty-five million dollars ($25,000,000) shall be in the form of cash, or securities of the same character and quality as specified in Sections 1170 to 1182, inclusive, or in readily marketable securities listed on regulated United States’ national or principal regional securities exchanges. The remaining assets shall be in the form just described or in the form of investments of substantially the same character and quality as described in Sections 1190 to 1202, inclusive. In calculating capital and surplus under this section, the term “same character and quality” shall permit, but not require, the commissioner to approve assets maintained in accordance with the laws of another state or country. The commissioner shall be guided by the limitations, restrictions, or other requirements of this code or the National Association of Insurance Commissioners’ Accounting Practices and Procedures Manual in determining whether assets substantially similar to those described in Sections 1190 to 1202, inclusive, qualify. The commissioner shall retain the discretion to disapprove or disallow an asset that is not of a sound quality, or that he or she deems to create an unacceptable risk of loss to the insurer or to policyholders. Letters of credit shall not qualify as assets in the calculation of surplus. If capital and surplus together total less than forty-five million dollars ($45,000,000), the commissioner has affirmatively found that the capital and surplus are adequate to protect California policyholders. The commissioner shall consider, on determining whether to make this finding, factors such as quality of management, the capital and surplus of a parent company, the underwriting profit and investment income trends, and the record of claims payment and claims handling practices of the nonadmitted insurer. (B) In the case of an “Insurance Exchange” created and authorized under the laws of individual states, maintains capital and surplus of not less than fifty million dollars ($50,000,000) in the aggregate. “Capital” shall be as defined in Section 36. “Surplus” shall be defined as assets exceeding the sum of liabilities for losses reported, expenses, taxes, and all other indebtedness and reinsurance of outstanding risks as provided by law and paid-in capital in the case of an insurer issuing or having outstanding shares of capital stock. The type of assets to be used in calculating capital and surplus shall be as follows: at least twenty-five million dollars ($25,000,000) shall be in the form of cash, or securities of the same character and quality as specified in Sections 1170 to 1182, inclusive, or in readily marketable securities listed on regulated United States’ national or principal regional securities exchanges. The remaining assets shall be in the form just described or in the form of investments of substantially the same character and quality as described in Sections 1190 to 1202, inclusive. In calculating capital and surplus under this section, the term “same character and quality” shall permit, but not require, the commissioner to approve assets maintained in accordance with the laws of another state or country. The commissioner shall be guided by the limitations, restrictions, or other requirements of this code or the National Association of Insurance Commissioners’ Accounting Practices and Procedures Manual in determining whether assets substantially similar to those described in Sections 1190 to 1202, inclusive, qualify. The commissioner shall retain the discretion to disapprove or disallow an asset that is not of a sound quality, or that he or she deems to create an unacceptable risk of loss to the insurer or to policyholders. Letters of credit shall not qualify as assets in the calculation of surplus. Each individual syndicate seeking to accept surplus line placements of risks resident, located, or to be performed in this state shall maintain minimum capital and surplus of not less than six million four hundred thousand dollars ($6,400,000). Each individual syndicate shall increase the capital and surplus required by this paragraph by one million dollars ($1,000,000) each year until it attains a capital and surplus of forty-five million dollars ($45,000,000). (C) In the case of a syndicate that is part of a group consisting of incorporated individual insurers, or a combination of both incorporated and unincorporated insurers, that at all times maintains a trust fund of not less than one hundred million dollars ($100,000,000) in a qualified United States financial institution as security to the full amount thereof for the United States surplus line policyholders and beneficiaries of direct policies of the group, including all policyholders and beneficiaries of direct policies of the syndicate, and the full balance in the trust fund is available to satisfy the liabilities of each member of the group of those syndicates, incorporated individual insurers or other unincorporated insurers, without regard to their individual contributions to that trust fund, and the trust complies with the terms of and conditions specified in paragraph (1) of subdivision (b), the syndicate is excepted from the capital and surplus requirements of subparagraph (A). The incorporated members of the group shall not be engaged in any business other than underwriting as a member of the group and shall be subject to the same level of solvency regulation and control by the group’s domiciliary regulator as are the unincorporated members. (b) (1) In addition, to be approved as a surplus line insurer, an insurer not domiciled in one of the United States or its territories shall have in force in the United States an irrevocable trust account in a qualified United States financial institution, for the protection of United States policyholders, of not less than five million four hundred thousand dollars ($5,400,000) and consisting of cash, securities acceptable to the commissioner that are authorized pursuant to Sections 1170 to 1182, inclusive, readily marketable securities acceptable to the commissioner that are listed on a regulated United States national or principal regional security exchange, or clean and irrevocable letters of credit acceptable to the commissioner and issued by a qualified United States financial institution. The trust agreement shall be in a form acceptable to the commissioner. The funds in the trust account may be included in any calculation of capital and surplus, except letters of credit, which shall not be included in the calculation. (2) In the case of a syndicate seeking approval under subparagraph (C) of paragraph (2) of subdivision (a), the syndicate shall, in addition to the requirements of that subparagraph, at a minimum, maintain in the United States a trust account in an amount satisfactory to the commissioner that is not less than the amount required by the domiciliary state of the syndicate’s trust. The trust account shall comply with the terms and conditions specified in paragraph (1). (3) In the case of a group of incorporated insurers under common administration that maintains a trust fund of not less than one hundred million dollars ($100,000,000) in a qualified United States financial institution for the payment of claims of its United States policyholders, their assigns, or successors in interest and that complies with the terms and conditions of paragraph (1) that has continuously transacted an insurance business outside the United States for at least three years, that is in good standing with its domiciliary regulator, whose individual insurer members maintain standards and a financial condition reasonably comparable to admitted insurers, that submits to this state’s authority to examine its books and bears the expense of examination, and that has an aggregate policyholder surplus of ten billion dollars ($10,000,000,000), the group is excepted from the capital and surplus requirements of subdivision (a). (c) Unless available from the NAIC or other public source, has caused to be provided to the commissioner the following documents: (1) The financial documents as specified below, each showing the insurer’s condition as of a date not more than 12 months prior to submission: (A) A copy of an annual statement, prepared in the form prescribed by the NAIC. For an alien insurer, in lieu of an annual statement, a licensee may submit a form as set forth by regulation and as prepared by the insurer, and, if listed by the IID, a copy of the complete information as required in the application for listing by the IID. (B) A copy of an audited financial report on the insurer’s condition that meets the standards of subparagraph (D) for foreign insurers or subparagraph (E) for alien insurers. (C) If the insurer is an alien: (i) A certified copy of the trust agreement referenced in subdivision (b). (ii) A verified copy of the most recent quarterly statement or list of the assets in the trust. (D) Financial reports filed pursuant to this section by foreign insurers shall conform to the following standards: (i) Financial documents shall be certified. (ii) An audited financial report shall constitute a supplement to the insurer’s annual statement, as required by the annual statement instructions issued by the NAIC. (iii) An audited financial report shall be prepared by an independent certified public accountant or accounting firm in good standing with the American Institute of Certified Public Accountants and in all states where licensed to practice; and be prepared in conformity with statutory accounting practices prescribed, or otherwise permitted, by the insurance regulator of the insurer’s domiciliary jurisdiction. (iv) An audited financial report shall include information on the insurer’s financial position as of the end of the most recent calendar year, and the results of its operations, cashflows, and changes in capital and surplus for the year then ended. (v) An audited financial report shall be prepared in a form and using language and groupings substantially the same as the relevant sections of the insurer’s annual statement filed with its domiciliary jurisdiction, and presenting comparatively the amounts as of December 31 of the most recent calendar year and the amounts as of December 31 of the preceding year. (E) Financial reports filed pursuant to this section by alien insurers shall conform to the following standards: (i) Except as provided in clause (ii) of subparagraph (C), financial documents should be certified. If certification of a financial document is not available, the document shall be verified. (ii) Financial documents should be expressed in United States dollars, but may be expressed in another currency, if the exchange rate for the other currency as of the date of the document is also provided. (iii) The responses provided pursuant to subparagraph (A) on the form submitted in lieu of an annual statement should follow the most recent Insurance Solvency International Guide to Alien Reporting Format, “Standard Definitions of Accounting Items.” Responses that do not agree with a standard definition shall be fully explained in the form. (iv) An audited financial report shall be prepared by an independent licensed auditor in the insurer’s domiciliary jurisdiction or in any state. (v) An audited financial report shall be prepared in accord with either (I) Generally Accepted Auditing Standards that prescribe Generally Accepted Accounting Principles, or (II) International Accounting Standards as published and revised from time to time by the International Auditing Guidelines published by the International Auditing Practice Committee of the International Federation of Accountants, and shall include financial statement notes and a summary of significant accounting practices. (F) The commissioner may accept, in lieu of a document described above, a certified or verified financial or regulatory document, statement, or report if the commissioner finds that it possesses reliability and financial detail substantially equal to or greater than the document for which it is proposed to be a substitute. (G) If one of the financial documents required to be submitted under subparagraphs (A) and (B) is dated within 12 months of submission, but the other document is not so dated, the licensee may use the outdated document if it is accompanied by a supplement. The supplement must meet the same requirements that apply to the supplemented document and must update the outdated document to a date within the prescribed time period, preferably to the same date as the nonsupplemented document. (2) A certified copy of the insurer’s license issued by its domiciliary jurisdiction, plus a certification of good standing, certificate of compliance, or other equivalent certificate, from either that jurisdiction or, if the jurisdiction does not issue those certificates, from a state where it is licensed. (3) Information on the insurer’s agent in California for service of process, including the agent’s full name and address. The agent’s address must include a street address where the agent can be reached during normal business hours. (4) The complete street address, mailing address, and telephone number of the insurer’s principal place of business. (5) A certified or verified explanation, report, or other statement from the insurance regulatory office or official of the insurer’s domiciliary jurisdiction concerning the insurer’s record regarding market conduct and consumer complaints, or, if that information cannot be obtained from that jurisdiction, then any other information that the licensee can procure to demonstrate a good reputation for payment of claims and treatment of policyholders. (6) A verified statement, from the insurer or licensee, on whether the insurer or an affiliated entity is currently known to be the subject of an order or proceeding regarding conservation, liquidation, or other receivership; or regarding revocation or suspension of a license to transact insurance in any jurisdiction; or otherwise seeking to stop the insurer from transacting insurance in any jurisdiction. The statement shall identify the proceeding by date, jurisdiction, and relief or sanction sought, and shall attach a copy of the relevant order. (7) A certified copy of the most recent report of examination or an explanation if the report is not available. (8) A list of all California surplus line brokers authorized by the insurer to issue policies on its behalf, and any additions to or deletions from that list. (d) (1) Has provided additional information or documentation required by the commissioner that is relevant to the financial stability, reputation, and integrity of the nonadmitted insurer. In making a determination concerning financial stability, reputation, and integrity of the nonadmitted insurer, the commissioner shall consider any analyses, findings, or conclusions made by the NAIC in its review of the insurer for purposes of inclusion on or exclusion from the list of authorized nonadmitted insurers maintained by the NAIC. The commissioner may, but shall not be required to, rely on, adopt, or otherwise accept any analyses, findings, or conclusions of the NAIC, as the commissioner deems appropriate. In the case of a syndicate seeking eligibility under subparagraph (C) of paragraph (2) of subdivision (a), the commissioner may, but shall not be required to, rely on, adopt, or otherwise accept any analyses, findings, or conclusions of a state, as the commissioner deems appropriate, as long as that state, in its method of regulation and review, meets the requirements of paragraph (2). (2) The regulatory body of the state shall regularly receive and review the following: (A) an audited financial statement of the syndicate, prepared by a certified or chartered public accountant; (B) an opinion of a qualified actuary with regard to the syndicate’s aggregate reserves for payment of losses or claims and payment of expenses of adjustment or settlement of losses or claims; (C) a certification from the qualified United States financial institution that acts as the syndicate’s trustee, respecting the existence and value of the syndicate’s trust fund; and (D) information concerning the syndicate’s or its manager’s operating history, business plan, ownership and control, experience, and ability, together with any other pertinent factors, and any information indicating that the syndicate or its manager make reasonably prompt payment of claims in this state or elsewhere. The regulatory body of the state shall have the authority, either by law or through the operation of a valid and enforceable agreement, to review the syndicate’s assets and liabilities and audit the syndicate’s trust account, and shall exercise that authority with a frequency and in a manner satisfactory to the commissioner. (e) Has established that: (1) All documents required by subdivisions (c) and (d) have been filed. Each of the documents appear after review to be complete, clear, comprehensible, unambiguous, accurate, and consistent. (2) The documents affirm that the insurer is not subject in any jurisdiction to an order or proceeding that: (A) Seeks to stop it from transacting insurance. (B) Relates to conservation, liquidation, or other receivership. (C) Relates to revocation or suspension of its license. (3) The documents affirm that the insurer has actively transacted insurance for the three years immediately preceding the filing made under this section, unless an exemption is granted. As used in this paragraph, “insurer” does not include a syndicate of underwriting entities. The commissioner may grant an exemption if the licensee has applied for exemption and demonstrates either of the following: (A) The insurer meets the condition for any exception set forth in subdivision (a), (b), or (c) of Section 716. (B) If the insurer has been actively transacting insurance for at least 12 months, and the licensee demonstrates that the exemption is warranted because the insurer’s current financial strength, operating history, business plan, ownership and control, management experience, and ability, together with any other pertinent factors, make three years of active insurance transaction unnecessary to establish sufficient reputation. (4) The documents confirm that the insurer holds a license to issue insurance policies, other than reinsurance, to residents of the jurisdiction that granted the license unless an exemption is granted. The commissioner may grant an exemption if the licensee has applied for an exemption and demonstrates that the exemption is warranted because the insurer proposes to issue in California only commercial coverage, and is wholly owned and actually controlled by substantial and knowledgeable business enterprises that are its policyholders and that effectively govern the insurer’s destiny in furtherance of their own business objectives. (5) The information filed pursuant to paragraph (5) of subdivision (c) or otherwise filed with or available to the commissioner, including reports received from California policyholders, shall indicate that the insurer makes reasonably prompt payment of claims in this state or elsewhere. (6) The information available to the commissioner shall not indicate that the insurer offers in California a licensee products or rates that violate any provision of this code. (f) Has been placed on the list of approved surplus line insurers by the commissioner. The commissioner shall establish a list of all surplus line insurers that have met the requirements of subdivisions (a) to (e), inclusive, and shall publish a master list at least semiannually. An insurer receiving approval as an approved surplus line insurer shall be added by addendum to the list at the time of approval, and shall be incorporated into the master list at the next date of publication. If an insurer appears on the most recent list, it shall be presumed that the insurer is an approved surplus line insurer, unless the commissioner or his or her designee has mailed or causes to be mailed notice to all surplus line brokers that the commissioner has withdrawn the insurer’s approval. Upon receipt of notice, the surplus line broker shall no longer advertise that the insurer is approved. Nothing in this subdivision shall limit the commissioner’s discretion to withdraw an insurer’s approval. (g) (1) Except as provided by paragraph (2), whenever the commissioner has reasonable cause to believe, and determines after a public hearing, that an insurer on the list established pursuant to subdivision (f), (A) is in an unsound financial condition, (B) does not meet the approval requirements under subdivisions (a) to (e), inclusive, (C) has violated the laws of this state, or (D) without justification, or with a frequency so as to indicate a general business practice, delays the payment of just claims, the commissioner may issue an order removing the insurer from the list. Notice of hearing shall be served upon the insurer or its agent for service of process stating the time and place of the hearing and the conduct, condition, or ground upon which the commissioner would make his or her order. The hearing shall occur not less than 20 days, nor more than 30 days, after notice is served upon the insurer or its agent for service of process. (2) If the commissioner determines that an insurer’s immediate removal from the list is necessary to protect the public or a home state insured or home state insured applicant of the insurer, or, in the case of an application by an insurer to be placed on the list that is being denied by the commissioner, the commissioner may issue an order pursuant to paragraph (1) without prior notice and hearing. At the time an order is served pursuant to this paragraph to an insurer on the list, the commissioner shall also issue and serve upon the insurer a statement of the reasons that immediate removal is necessary. An order issued pursuant to this paragraph shall include a notice stating the time and place of a hearing on the order, which shall be not less than 20 days, nor more than 30 days, after the notice is served. (3) Notwithstanding paragraphs (1) and (2), in a case where the commissioner is basing a decision to remove an insurer from the list, or deny an application to be placed on the list, on the failure of the insurer or applicant to comply with, meet, or maintain any of the objective criteria established by this section, or by regulation adopted pursuant to this section, the commissioner may specify this fact in the order, and a hearing shall not be required to be held on the order. (4) Notwithstanding paragraphs (1) and (2), the commissioner may, without prior notice or hearing, remove from the list established pursuant to subdivision (f) an insurer that has failed or refused to timely provide documents required by this section, or regulations adopted to implement this section. In the case of removal pursuant to this paragraph, the commissioner shall notify all surplus line brokers of the action. (h) In addition to other statements or reports required by this chapter, the commissioner may also address to a licensee a written request for full and complete information respecting the financial stability, reputation, and integrity of a nonadmitted insurer with whom the licensee has dealt or proposes to deal in the transaction of insurance business with a home state insured. The licensee so addressed shall promptly furnish in written or printed form so much of the information requested as he or she can produce, together with a signed statement identifying the same and giving reasons for omissions, if any. After due examination of the information and accompanying statement, the commissioner may, if he or she believes it to be in the public interest, advise the licensee in writing that the insurer does not qualify as an approved insurer. Any placement in the nonadmitted insurer made by a licensee after receipt of that advisement shall be accompanied by a copy of the advisement. The commissioner may issue an advisement when documents submitted pursuant to subdivisions (c) and (d) do not meet the criteria of subdivisions (a) to (e), inclusive, or when the commissioner obtains documents on an insurer and the insurer does not meet the criteria of subdivisions (a) to (e), inclusive, and shall be authorized to not include or remove that insurer from the List of Approved Surplus Line Insurers. (i) The commissioner shall require, at least annually, the submission of records and statements reasonably necessary to ensure that the requirements of this section are maintained. (j) The schedule of fees to cover the costs of administering and enforcing this chapter are as follows: (1) Initial application, six thousand one hundred thirteen dollars ($6,113). (2) Renewal application, three thousand fifty-seven dollars ($3,057). (3) Financial update, three hundred forty-one dollars ($341). (4) Nonfinancial update, fifty dollars ($50). (Amended by Stats. 2017, Ch. 534, Sec. 47. (AB 1699) Effective January 1, 2018.)
  141. 1765.3.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    This section allows surplus line licenses for individuals or legal business entities, but requires extra named responsible persons when there is more than one surplus line office. Corporations must disclose major stockholders and officers/directors in applications and report later changes to the commissioner, except address changes.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## 1765.3. (a) A license under this chapter may be issued to an individual or any legal business entity. If issued to a business entity or individual that maintains more than one surplus line office from which it transacts that business with California residents, it shall name the natural person or persons located at each such surplus line office maintained by the licensee who is or are responsible for the proper discharge at each office of all duties placed upon the licensee acting as a surplus line broker and each of these natural persons are required to be licensed as a surplus line broker. Each natural person shall meet all of the requirements for the license. (b) Every application for a license filed by a corporation shall contain the names and addresses of all stockholders owning 10 percent or more of the corporation’s stock, and of all officers and directors of the corporation. Every licensed corporation shall file a written notice with the commissioner of all changes, except address changes, of its stockholders who own 10 percent or more of the corporation’s stock and of all officers and directors of the corporation. (Amended by Stats. 2011, Ch. 83, Sec. 22. (AB 315) Effective July 15, 2011. Operative July 21, 2011, by Sec. 34 of Stats. 2011, Ch. 83.)
  142. 1765.4.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    A person applying for a surplus line broker license must prove competency by holding an existing property broker-agent and casualty broker-agent license, usually tied to passing the qualifying exam; a nonresident of California may instead show a property and casualty license from the resident state.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## 1765.4. Any natural person applying for a license to act as a surplus line broker shall prove his or her competency by showing he or she holds an existing license to act as a property broker-agent and casualty broker-agent, which requires passing the qualifying examination for that insurance broker’s license. Any natural person who is not a resident of California may prove his or her competency by showing that he or she holds an existing license for property and casualty in his or her resident state. (Amended by Stats. 2012, Ch. 786, Sec. 36. (AB 2303) Effective January 1, 2013.)
  143. 1765.5.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    A license application under this chapter is automatically denied if it is still unresolved after one year from the commissioner’s receipt of the application.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## 1765.5. If an applicant for any license under this chapter, within one year from the date of the receipt by the commissioner of the application, whether or not the filing is complete, neither fully qualifies for and receives that license on a permanent basis, nor is denied its issue, such application is automatically denied without prejudice to the filing of a new application for the license. (Added by Stats. 2011, Ch. 83, Sec. 24. (AB 315) Effective July 15, 2011. Operative July 21, 2011, by Sec. 34 of Stats. 2011, Ch. 83.)
  144. 1766.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    A premium paid to a surplus line broker counts as payment to the insurer when the broker is acting for someone else on an insurance policy under this chapter.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## 1766. A payment of premium to a surplus line broker acting for a person other than himself or herself in negotiating, continuing, or renewing any policy of insurance under this chapter shall be deemed to be payment to the insurer, notwithstanding any conditions or stipulations in the policy or contract. Nothing in this section shall be deemed to relieve a surplus line broker or special lines’ surplus line broker of any obligation owed to a home state insured or home state insured applicant. (Amended by Stats. 2011, Ch. 83, Sec. 25. (AB 315) Effective July 15, 2011. Operative July 21, 2011, by Sec. 34 of Stats. 2011, Ch. 83.)
  145. 1767.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    Surplus line brokers and licensees must keep and report office information, and some must designate a principal office and notify the commissioner.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## 1767. A resident surplus line broker at all times shall maintain in good faith an office in this state and if he or she maintains more than one surplus line office in this state, he or she shall designate one of them as his or her principal surplus line office in this state and shall notify the commissioner of that designation. He or she shall report to the commissioner the addresses of all surplus line offices maintained by him or her in this state and any change in location of any of those offices. A nonresident surplus line broker at all times shall maintain in good faith an office in the state or territory of the United States in which he or she is licensed as a resident surplus line broker, and if he or she maintains more than one surplus line office in that state, he or she shall designate one of them as his or her principal surplus line office in that state and shall notify the commissioner of the designation. A resident licensee shall report to the commissioner the addresses of all surplus line offices maintained in this state and any change in location of any of those offices. Nonresident licensees shall report to the commissioner the addresses of all surplus line offices maintained in the state or territory of the United States in which the resident surplus line license is maintained and any change in location of any of those offices. (Amended by Stats. 2002, Ch. 203, Sec. 19. Effective January 1, 2003.)
  146. 1768.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    Resident and nonresident surplus line brokers must keep complete records for certain California home state insured business, and the commissioner may waive or modify these requirements by notice on the department’s website.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## 1768. A resident surplus line broker shall keep in this state complete records of the business transacted by him or her for California home state insureds with nonadmitted insurers under his or her license as a surplus line broker including all of the following documentation for each policy: (a) Verification that the insured is a California home state insured. (b) Verification that the commercial insured or industrial insured qualifies for the provisions of this code. (c) Whether or not it is a single state policy or multistate policy. (d) Where allocation of premium to the states is required, data necessary to make that allocation. A nonresident surplus line broker shall keep in the state where he or she is licensed as a resident surplus line broker complete records of the business transacted by him or her for California home state insureds with nonadmitted insurers under his or her California nonresident surplus line broker license, including subdivisions (a) to (d), inclusive. The commissioner may waive or modify any of the foregoing requirements by issuance of a notice published on the department’s Internet Web site. (Amended by Stats. 2012, Ch. 162, Sec. 108. (SB 1171) Effective January 1, 2013.)
  147. 1769.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    If the commissioner requires it, a surplus line broker must give the commissioner a list of the admitted insurers that could not provide the full insurance desired.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## 1769. Whenever required so to do by the commissioner, such surplus line broker shall furnish to the commissioner a list of the admitted insurers from which the entire amount of insurance desired was not obtainable. (Amended by Stats. 1994, Ch. 980, Sec. 6. Effective January 1, 1995.)
  148. 1770.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    The commissioner may examine a surplus line broker’s books and accounts when necessary, and the broker must give free access to books and papers.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## 1770. The commissioner, whenever he deems necessary, may examine the books and accounts of any surplus line broker for the purpose of determining whether or not the broker is conducting his business in accordance with the provisions of this chapter. For the purpose of making such examination such broker shall allow the commissioner free access at all times to all the broker’s books and papers, and the commissioner shall thoroughly inspect and examine all of the broker’s affairs. (Enacted by Stats. 1935, Ch. 145.)
  149. 1771.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    Costs and expenses of examinations by the commissioner must be paid in the manner set out in Section 736.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## 1771. The costs and expenses of all examinations by the commissioner shall be paid as prescribed in Section 736. (Amended by Stats. 1947, Ch. 1008.)
  150. 1772.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    A surplus line insurer can be sued in California for covered causes of action, and policies or evidence of insurance must state this section and name the person for the commissioner to serve process on.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## 1772. (a) A surplus line insurer may be sued upon any cause of action arising in this state under any surplus line insurance contract made by it, or any evidence of insurance issued or delivered by the surplus line broker, pursuant to the procedure set forth in Sections 1610 to 1620, inclusive. Any policy or evidence of insurance issued by the surplus line insurer or the surplus line broker shall contain a provision stating the substance of this section, and designating the person to whom the commissioner shall mail process. (b) Every surplus line insurer assuming a surplus line insurance shall be deemed thereby to have subjected itself to this chapter. (c) The remedies provided by this section shall be in addition to any other methods provided by law for service of process. (Added by Stats. 1994, Ch. 980, Sec. 7. Effective January 1, 1995.)
  151. 1773.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    Surplus line brokers may advertise and solicit through various media, but they must follow disclosure rules and may not include insurer premiums or rates.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## 1773. Surplus line brokers may advertise and solicit using print, electronic media, direct mail, and all other advertising or marketing media. These advertisements and solicitations may include a description of nonadmitted insurance products available through the surplus line broker, and may include the name of any nonadmitted insurer, provided that all of the following apply: (a) the insurer is authorized to accept placements from the surplus line broker pursuant to Section 1765.1, (b) a nonadmitted insurer’s name is not used in connection with any nonadmitted insurance product of that insurer, (c) the unlicensed status of the insurer or of the insurance products is disclosed in type of a size no smaller than any telephone number, address, or fax number appearing in the advertisement or solicitation, and (d) the advertisement or solicitation does not contain any assertion, representation, or statement with respect to the business of insurance, or with respect to any person in the conduct of his or her insurance business, that is untrue, deceptive, or misleading, and that is known, or that by the exercise of reasonable care should be known, to be untrue, deceptive, or misleading. If the insurance is available from an eligible nonadmitted insurer that is a member of a group of insurers, advertisements and solicitations in accordance with this section may include the name of the group. A surplus line broker’s advertisements and solicitations shall not include any information about a nonadmitted insurer’s premiums or rates. (Amended by Stats. 2001, Ch. 448, Sec. 6. Effective January 1, 2002.)
  152. 1774.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    Surplus line brokers, and certain home state insureds that directly procure insurance, must file an annual sworn statement with the commissioner by March 1 and include specified premium details.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## 1774. (a) (1) On or before the first day of March of each year the surplus line broker, placing business for a home state insured, shall file with the commissioner a sworn statement of all business transacted under his or her surplus line license during the last preceding calendar year. The statement shall contain an account of the business done by the surplus line broker placing business for a home state insured for the prior year, and shall include (A) the total amount of gross premium, (B) the total gross premium for single state risks where 100 percent of the premium is attributable to risks in California, and (C) for multistate risks, the percentage of gross premium allocated to California and each other state. The commissioner may waive or modify any of the foregoing requirements by issuance of a notice published on the department’s Internet Web site. (2) On or before the first day of March of each year, the home state insured that directly procures insurance pursuant to Section 1760 shall file with the commissioner a sworn statement of all business done during the last preceding calendar year. That statement shall contain an account of the insurance directly procured by the home state insured pursuant to Section 1760 for the prior year, and shall include (A) the total amount of premium, (B) the total premium for single state risks where 100 percent of the premium is attributable to risks in California, and (C) for multistate risks, the percentage of premium allocated to California and each other state. The commissioner may waive or modify any of the foregoing requirements by issuance of a notice published on the department’s Internet Web site. (b) For purposes of this chapter, “business done” or “business transacted” means all insurance business conducted by the surplus line broker for a home state insured or directly procured by the home state insured. If two or more persons licensed as surplus line brokers are involved in placing a policy, only the one who is responsible for filing the confidential written report pursuant to subdivision (a) of Section 1763, shall be considered transacting business for tax purposes and then only one licensed surplus line broker shall include the policy in his or her sworn statement. The surplus line broker who is required to include the policy in his or her own statement is either (1) the one who is responsible for negotiating, effecting the placement, remitting the premium to the nonadmitted insurer or its representatives, and filing the confidential written report pursuant to subdivision (a) of Section 1763, or (2) the one surplus line broker who is delegated the responsibility for the filing of the confidential written report pursuant to subdivision (a) of Section 1763 pursuant to a written agreement that is (A) by and among the surplus line brokers referenced in paragraph (1) and this paragraph involved in the transaction, (B) signed by the surplus line brokers referenced in paragraph (1) and this paragraph involved in the transaction, and (C) provides by its terms that the agreement shall be made available to the commissioner or his or her designee, upon request. (c) The date on which the surplus line broker transacting a policy prepares a bill or invoice for payment of all or part of the premiums due, shall be considered the date on which that business was done or transacted, subject to subdivision (d). This date shall be shown on the face of the bill or invoice and shall be referred to as the “invoice date.” (d) (1) The invoice date shall be no more than 60 days after the policy effective date and no more than 60 days after the insurance was placed with a nonadmitted insurer, except as provided in paragraph (2). (2) For purposes of this chapter, the amount of gross premium to be reported, if premiums are billed and payable in installments, shall be the amount of the installment premium, provided the amount and due date of each installment, or the basis for determining each installment, is identifiable in the policy or an endorsement, and either of the following conditions is satisfied: (A) Installments under the policy are not billed more frequently than once per month. (B) If more than one installment is billed in any month, the commissioner determines, in his or her discretion, that the installment billing method used does not unduly burden the commissioner’s ability to accurately determine the amount of premium paid by the insured. (3) If a new or renewal policy has an effective date between January 1, 2011, to July 20, 2011, inclusive, and is placed on or before July 20, 2011, then the policy shall be considered to be business done by the surplus line broker as of the effective date. If a new or renewal policy has an effective date between January 1, 2011, to July 20, 2011, inclusive, then the policy shall be considered to be business done by the home state insured who directly procures policies as of the effective date. Cancellations or endorsements shall be business done on the same date as the policy that is being canceled or endorsed, if that policy effective date is on or before July 20, 2011. Installment premiums, as referenced in paragraph (2), shall be business done on the date of the most recent invoice issued on or before July 20, 2011, that included premium tax charges. This paragraph is enacted to address the July 21, 2011, effective date of the federal Dodd-Frank Wall Street Reform and Consumer Protection Act (P.L. 111-203), and shall remain in effect only until October 18, 2012. (Amended by Stats. 2012, Ch. 162, Sec. 109. (SB 1171) Effective January 1, 2013.)
  153. 1775.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    Reports and statements must be made on blanks furnished by the commissioner on application.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## 1775. All such reports and statements shall be made on blanks furnished to the surplus line broker by the commissioner on application therefor. (Enacted by Stats. 1935, Ch. 145.)
  154. 1775.1.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    Some surplus line brokers must make monthly installment payments on their annual tax if their prior-year tax was $20,000 or more.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## 1775.1. (a) Each calendar year, every surplus line broker whose annual tax for the preceding calendar year was twenty thousand dollars ($20,000) or more shall make monthly installment payments on account of the annual tax on business done during the current calendar year imposed by Section 1775.5. (b) Notwithstanding any other law, the commissioner may relieve a surplus line broker of his or her obligation to make monthly payments if the broker establishes to the satisfaction of the commissioner that either the broker has ceased to transact business in this state, or his or her annual tax for the current year will be less than twenty thousand dollars ($20,000). (Amended by Stats. 2014, Ch. 362, Sec. 4. (AB 2734) Effective January 1, 2015.)
  155. 1775.2.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    The commissioner must post prescribed installment payment forms on the department website by February 1 each year when monthly installment payments are required under Section 1775.1.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## 1775.2. On or before February 1 of each year, the commissioner shall post on the department’s Internet Web site the installment payment forms prescribed by the commissioner to accompany surplus line tax remittances if monthly installment payments are required by Section 1775.1. Failure to secure those forms shall not relieve any broker from making or paying monthly installment payments. (Amended by Stats. 2005, Ch. 312, Sec. 6. Effective January 1, 2006.)
  156. 1775.3.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    Surplus line brokers who owe monthly installment payments must remit them by the first day of the third calendar month after the accounting month ends.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## 1775.3. Each surplus line broker required to make monthly installment payments shall remit them on or before the first day of the third calendar month following the end of the accounting month in which the business was done. The annual payment under Section 1775.5 shall be in lieu of an installment payment under this section for the accounting month of December. Remittances for those payments shall be made payable to the commissioner and shall be made by electronic fund transfer in accordance with Section 1775.8 or delivered to the office of the commissioner, accompanied by an installment payment form prescribed by the commissioner if remittance by electronic fund transfer is not mandatory under Section 1775.8. (Amended by Stats. 1994, Ch. 455, Sec. 4. Effective January 1, 1995.)
  157. 1775.4.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    Surplus line brokers must pay a monthly amount equal to 3% of taxable gross premiums, file a return even when no payment is due, and may face penalties and interest for late or fraudulent nonpayment.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## 1775.4. (a) The amount of the payment shall be 3 percent of the gross premiums charged less return premiums upon business done by the surplus line broker during the calendar month ending two calendar months immediately preceding the due date of the payment, as specified in Section 1775.3, excluding gross premiums and return premiums paid by him or her upon business governed by the provisions of Section 1760.5. If during any calendar month those return premiums upon business done by a surplus line broker exceed the gross premiums upon the business done by him or her in that calendar month, then no payment shall be payable by him or her in respect to that calendar month, and he or she may carry forward that excess to the next succeeding calendar month or months and apply it in reduction of the taxable premiums on business done by him or her in that succeeding calendar month or months. Even though no payment shall be payable by the broker, he or she shall file a return showing that his or her return premiums exceeded his or her gross premiums. (b) In determining the applicability of subdivision (a) of Section 1775.1 to a surplus line broker who has acquired the business of another surplus line broker, the amount of tax liability of the acquired broker for the immediately preceding calendar year shall be added to the amount of the tax liability of the acquiring broker for the immediately preceding calendar year. (c) All amounts paid, other than penalties and interest, shall be allowed as a credit on the annual tax imposed by Section 1775.5. (d) If the total amount of monthly installment payments for any calendar year exceeds the amount of annual tax for that year, the excess shall be treated as an overpayment of annual tax and be allowed as a credit or refund. (e) A penalty of 10 percent of the amount of the monthly payment due shall be levied upon and paid by any surplus line broker who fails to make the necessary payment within the time required, plus interest at the rate of 1 percent per calendar month or fraction thereof from the due date of the payment until the date payment is received by the commissioner, but not for any period after the due date of the annual tax. The penalty and interest shall be applied as prescribed in Section 12636.5 of the Revenue and Taxation Code. The commissioner may remit the penalty in a case where he or she finds, as a result of examination or otherwise, that the failure of, or delay in, payment arose out of excusable mistake or excusable inadvertence. (f) For any part of a payment required that was not made within the time required by law, when the nonpayment or late payment was due to fraud on the part of the taxpayer, a penalty of 25 percent of the amount unpaid shall be added thereto, in addition to all other penalties otherwise imposed. (g) The commissioner, upon a showing of good cause, may extend for not to exceed 10 days the time for making a monthly payment. The extension may be granted at any time, provided that a request therefor is filed with the commissioner within or prior to the period for which the extension may be granted. Any surplus line broker to whom an extension is granted shall, in addition to the monthly payment, pay interest at the rate of 1 percent per month, or fraction thereof, from the due date until the annual tax due date. (Amended by Stats. 2011, Ch. 83, Sec. 28. (AB 315) Effective July 15, 2011. Operative July 21, 2011, by Sec. 34 of Stats. 2011, Ch. 83.)
  158. 1775.5.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    Surplus line brokers must pay an annual 3% tax on covered premiums to the Insurance Commissioner by March 1, with interest and penalties for late payment.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## 1775.5. (a) Every surplus line broker shall annually, on or before the first day of March of each year, pay to the Insurance Commissioner for the use of the State of California a tax of 3 percent of the gross premiums charged less return premiums upon business done by him or her under the authority of his or her license during the preceding calendar year, excluding any portions of premiums upon business done involving the risk finance portion of any blended finite risk product used in the financing element of state or federal Superfund environmental settlements involving remediation of soil or groundwater contamination or by the provisions of Section 1760.5. If during any calendar year 3 percent of the return premiums upon business done by a surplus line broker exceed 3 percent of the gross premiums upon that business done by him or her in that year, then he or she may either carry forward that excess to the next succeeding year and apply it as a credit against 3 percent of gross premiums on the business done by him or her in the succeeding year, or he or she may elect to receive, and thereupon be paid a refund equal to the amount of taxes theretofore paid by him or her on that excess of return premiums paid over gross premiums received. (b) For the purpose of determining that tax, the total premium charged for all that nonadmitted insurance placed in a single transaction with one underwriter or group of underwriters, whether in one or more policies, shall be the entire premium charged on all nonadmitted insurance for the California home state insured. This provision shall not apply to interstate motor transit operations conducted between this and other states. With respect to those operations surplus line tax shall be payable on the entire premium charged on all nonadmitted insurance, less the following: (1) The portion of the premium as is determined, as herein provided, to have been charged for operations in other states taxing the premium on operations in those states of an insured maintaining its headquarters office in this state. (2) The premium for any operations outside of this state of an insured who maintains a headquarters operating office outside of this state and a branch office in this state. (c) (1) A penalty of 10 percent of the amount of the payment due pursuant to this section shall be levied upon and paid by any surplus line broker who fails to make the necessary payment within the time required, plus interest at the rate of 1 percent per calendar month or fraction thereof, from March 1, the due date of the annual tax, until the date the payment is received by the commissioner. The penalty and interest shall be applied as prescribed in Section 12636.5 of the Revenue and Taxation Code. The commissioner, upon a showing of good cause, may extend for a period not to exceed 30 days, the time for filing a tax return or paying any amount required to be paid with the return. The extension may be granted at any time, provided that a request therefor is filed with the commissioner within, or prior to, the period for which the extension may be granted. (2) Any surplus line broker to whom an extension is granted shall, in addition to the tax, pay interest at the rate of 1 percent per month or fraction thereof from March 1, until the date of payment. The commissioner may remit the penalty in a case where the commissioner finds, as a result of examination or otherwise, that the failure of or delay in payment arose out of excusable mistake or excusable inadvertence. (d) For any part of a payment required by this section or by Section 1775.4 which was not made within the time required by law, when the nonpayment or late payment was due to fraud on the part of the broker, a penalty of 25 percent of the amount unpaid shall be added thereto, in addition to all other penalties otherwise imposed. (e) For the purposes of this section, these terms shall have the following meanings: (1) “Blended finite risk product” means a contractual arrangement combining risk finance with traditional risk transfer, where a distinct portion of the program cost represents the funding of a known, existing, nonfortuitous future cost, obligation, responsibility, or liability at its discounted net present value, and another portion of the program cost represents risk transfer for losses that have yet to occur related to the cost, obligation, responsibility, or liability that is the subject of the program. (2) “Risk financing” means that portion of any blended finite risk product that represents the funding of a known, existing, nonfortuitous future cost, obligation, responsibility, or liability. (3) “Risk finance” or “financing element” means a method of funding for a known future cost over a long time horizon in current-value dollars using the principle of net present value discounting. (Amended by Stats. 2012, Ch. 162, Sec. 110. (SB 1171) Effective January 1, 2013.)
  159. 1775.6.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    The commissioner must send certain tax money to the State Treasurer and then give the Controller a record of the amount sent and which surplus line brokers paid it.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## 1775.6. All tax moneys received by the commissioner pursuant to this chapter shall be transmitted to the State Treasurer to be deposited in the State Treasury to the credit of the Insurance Tax Fund. Upon transmitting moneys to the State Treasurer, the commissioner shall furnish the Controller with a record of the amount transmitted and the surplus line brokers from whom the moneys have been received. (Added by Stats. 1963, 1st Ex. Sess., Ch. 4.)
  160. 1775.7.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    Money in the Insurance Tax Fund received from the commissioner under Section 1775.6 is appropriated to pay refunds authorized by this chapter, and the remaining balance must be transferred to the State General Fund on the Controller’s order.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## 1775.7. The money in the Insurance Tax Fund received from the commissioner pursuant to Section 1775.6 is hereby appropriated as follows: (a) To pay the refunds authorized by this chapter. (b) The balance of the money in the fund shall, on order of the Controller, be transferred to the State General Fund. (Added by Stats. 1963, 1st Ex. Sess., Ch. 4.)
  161. 1775.8.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    Certain surplus line brokers must pay specified taxes by electronic funds transfer, and noncompliance can trigger a 10% penalty.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## 1775.8. (a) On and after January 1, 1994, and before January 1, 1995, every surplus line broker whose annual taxes for business done in calendar year 1992 or whose quarterly taxes for business done in calendar year 1993 exceed fifty thousand dollars ($50,000) shall make payment by electronic funds transfer. On and after January 1, 1995, every surplus line broker whose annual taxes for business done in calendar year 1993 or in any calendar year thereafter exceed twenty thousand dollars ($20,000) shall make payment by electronic funds transfer. The surplus line broker shall choose one of the acceptable methods described in Section 45 for completing the electronic funds transfer. (b) Payment is deemed complete on the date the electronic funds transfer is initiated, if settlement to the state’s demand account occurs on or before the banking day following the date the transfer is initiated. If settlement to the state’s demand account does not occur on or before the banking day following the date the transfer is initiated, payment is deemed to occur on the date settlement occurs. (c) (1) Any surplus line broker required to remit taxes by electronic funds transfer pursuant to this section who remits those taxes by means other than an appropriate electronic funds transfer, shall be assessed a penalty in an amount equal to 10 percent of the taxes due at the time of the payment. (2) If the department finds that a surplus line broker’s failure to make payment by an appropriate electronic funds transfer in accordance with subdivision (a) is due to reasonable cause or circumstances beyond the surplus line broker’s control, and occurred notwithstanding the exercise of ordinary care and in the absence of willful neglect, that surplus line broker shall be relieved of the penalty provided in paragraph (1). (3) Any surplus line broker seeking to be relieved of the penalty provided in paragraph (1) shall file with the department a statement under penalty of perjury setting forth the facts upon which the claim for relief is based. (Added by renumbering Section 1776.8 by Stats. 1995, Ch. 721, Sec. 7. Effective January 1, 1996.)
  162. 1775.9.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    If the commissioner finds a surplus line broker reported too little tax, the commissioner must let the broker submit more information. If no agreement is reached within 60 days (or more time allowed), the commissioner must send a written deficiency assessment proposal to the State Board of Equalization.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## 1775.9. (a) If the commissioner determines that the amount of tax reported by the surplus line broker is less than the tax disclosed by the commissioner’s examination, the commissioner shall permit the surplus line broker to provide additional information demonstrating that the surplus line broker owes a lesser amount. If within 60 days, or such additional time as the commissioner deems appropriate, the commissioner and the surplus line broker cannot agree on the amount owed, the commissioner shall propose in writing to the State Board of Equalization a deficiency assessment for the difference pursuant to subdivision (b) of Section 12422 of the Revenue and Taxation Code. (b) Section 12636.5, Article 3 (commencing with Section 12421) and Article 4 (commencing with Section 12491) of Chapter 4 of, and Article 1 (commencing with Section 12951) and Article 2 (commencing with Section 12977) of Chapter 7 of, Part 7 of Division 2 of the Revenue and Taxation Code shall apply to surplus line brokers, except where inconsistent with the provisions of this chapter, in which case this chapter shall govern. (Amended by Stats. 2005, Ch. 231, Sec. 1. Effective January 1, 2006.)
  163. 1776.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    Surplus line brokers and related actors face misdemeanor liability for certain reporting, placement, and remuneration violations, and the commissioner may discipline licenses for section violations.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## 1776. Any surplus line broker who willfully fails or refuses to report to the commissioner any insurance on subject matter located within this state placed under his or her name with nonadmitted insurers, or who, by willful omission from the records required to be maintained by him or her for that purpose, attempts to evade the payment of taxes on any such insurance, is, in addition to being required to pay the tax, together with a penalty equal in amount to the tax, guilty of a misdemeanor. It is a misdemeanor for any surplus line broker or special lines’ surplus line broker to accept or pay directly or indirectly any consideration or remuneration for or in connection with the placing of insurance that, if done by a person within this state, is governed by the provisions of this chapter, when the placing was not done by a person licensed therefor pursuant to this chapter. It is a misdemeanor for any agent or broker to solicit, negotiate, or effect any insurance governed by the provisions of this chapter in nonadmitted insurers, except by and through a surplus line broker or special lines’ surplus line broker licensed pursuant to this chapter. Except in the case of insurance specified in subdivision (b) of Section 1760.5, it is a misdemeanor for any surplus line broker or special lines’ surplus line broker to accept, place, pay, or permit the payment of commission or other remuneration on insurance placed by him or her under authority of his or her license to any person other than one holding a license to act as an insurance agent, insurance broker, surplus line broker, or special lines’ surplus line broker, except that the business may be accepted by such surplus line broker or special lines’ surplus line broker directly from an insured or other person who would likewise be entitled to place the business directly with an admitted insurer without the solicitation, negotiation, or effecting thereof by an insurance agent or broker. The commissioner may deny, suspend, or revoke any license issued pursuant to this code if he or she finds after notice and hearing in accordance with the procedure provided in Article 13 (commencing with Section 1737) of Chapter 5 that the licensee has violated any provisions of this section. The permission granted in this chapter to place any insurance in a nonadmitted insurer shall not be deemed or construed to authorize any insurer to do business in this state. Placement activities of a licensed surplus line broker in accordance with this chapter, including, but not limited to, policy issuance, shall not be deemed or construed to be business done by the insurer in this state. (Amended by Stats. 2004, Ch. 183, Sec. 240. Effective January 1, 2005.)
  164. 1778.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    If a surplus line broker’s license is revoked for reasons other than insufficiency of sureties, a new license cannot be issued for one year and until all former-business debts are paid to the commissioner.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## 1778. When a surplus line broker’s license is revoked for any reason other than the insufficiency of his sureties, a new license shall not be issued to him within one year after such revocation and until all indebtedness of the broker on former business has been paid to the commissioner. (Enacted by Stats. 1935, Ch. 145.)
  165. 1779.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    A California home state insured with insurance placed through nonadmitted insurers must, on the commissioner’s written request, provide the relevant policies and documents and disclose the gross premiums paid or agreed to be paid.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## 1779. Every California home state insured for whom insurance has been effected with nonadmitted insurers shall, upon request in writing by the commissioner, produce for the commissioner’s examination all policies, contracts, and other documents evidencing that insurance, and shall disclose to the commissioner the amount of the gross premiums paid or agreed to be paid for that insurance. For refusal to obey that request, the insured shall forfeit to the State of California the sum of one thousand dollars ($1,000) for each refusal. (Amended by Stats. 2011, Ch. 83, Sec. 30. (AB 315) Effective July 15, 2011. Operative July 21, 2011, by Sec. 34 of Stats. 2011, Ch. 83.)
  166. 1780.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    A licensee or license applicant must notify the commissioner in writing whenever the business address changes.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6. Surplus Line Brokers [1760 - 1780] ( Chapter 6 enacted by Stats. 1935, Ch. 145. ) ## 1780. A licensee or applicant for a license under this chapter shall notify the commissioner, in writing, of any change in the address from which he intends to conduct his business. (Added by Stats. 1957, Ch. 671.)
  167. 1780.50.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.1. Surplus Line Advisory Organization [1780.50 - 1780.67] ( Chapter 6.1 added by Stats. 1993, Ch. 1007, Sec. 1. )

    Verify source ↗

    California authorizes a surplus line advisory organization and gives the Insurance Commissioner oversight and discretion to use its expertise in regulating insurance.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.1. Surplus Line Advisory Organization [1780.50 - 1780.67] ( Chapter 6.1 added by Stats. 1993, Ch. 1007, Sec. 1. ) ## 1780.50. (a) The Legislature finds and declares that consumers in the State of California have insurance needs which cannot always be met through the admitted insurance market. For this reason, many insurance consumers need access to insurance underwritten by nonadmitted insurers, as permitted by law. To help ensure that insurance consumers have access to financially sound and reputable nonadmitted insurers, it is in the public interest to authorize a surplus line advisory organization within the State of California to perform certain duties delegated by the Insurance Commissioner, as provided in this chapter. (b) The Legislature further finds and declares that it is in the public interest for the surplus line advisory organization authorized under this chapter to be composed of surplus line brokers or persons involved in the business of surplus line insurance. The advisory organization’s activities shall constitute an integral part of the business of insurance. The advisory organization will facilitate the state’s ability to monitor and regulate the transfer of risk on a sound basis through surplus line brokers to nonadmitted insurers in accordance with Chapter 6 (commencing with Section 1760) and may perform certain functions in this state’s system of monitoring and regulating the persons and entities involved in this state in the surplus line segment of the insurance industry. (c) The Legislature further finds and declares that the authorization of a surplus line advisory organization to perform the duties delegated by the Insurance Commissioner, as provided in this chapter, will further the policies of the State of California expressed in the findings set forth in this section. The oversight, supervision, and examination by the Insurance Commissioner provided for in this chapter are intended to subject the activities of the advisory organization to active state supervision. (d) The Legislature further finds and declares that, as it is the obligation and duty of the elected Insurance Commissioner to regulate the business of insurance in the State of California, it is in the public interest to grant the Insurance Commissioner the authority and discretion to utilize the expertise and knowledge of a surplus line advisory organization to assist in carrying out that responsibility, as provided in this chapter. (Added by Stats. 1993, Ch. 1007, Sec. 1. Effective January 1, 1994.)
  168. 1780.51.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.1. Surplus Line Advisory Organization [1780.50 - 1780.67] ( Chapter 6.1 added by Stats. 1993, Ch. 1007, Sec. 1. )

    Verify source ↗

    This section defines key terms used in Chapter 6.1, including “surplus line advisory organization,” “advisory organization,” “surplus line law,” and “commissioner.”

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.1. Surplus Line Advisory Organization [1780.50 - 1780.67] ( Chapter 6.1 added by Stats. 1993, Ch. 1007, Sec. 1. ) ## 1780.51. (a) As used in this chapter, “surplus line advisory organization” shall mean the organization authorized to perform the duties delegated by the commissioner under this chapter and to exercise the authority incidental thereto. (b) All references in this chapter to “advisory organization” shall mean “surplus line advisory organization.” (c) As used in this chapter, the term “surplus line law” shall refer to Chapter 6 (commencing with Section 1760). (d) All references in this chapter to the “commissioner” shall mean the Insurance Commissioner of the State of California. (Added by Stats. 1993, Ch. 1007, Sec. 1. Effective January 1, 1994.)
  169. 1780.52.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.1. Surplus Line Advisory Organization [1780.50 - 1780.67] ( Chapter 6.1 added by Stats. 1993, Ch. 1007, Sec. 1. )

    Verify source ↗

    This section deems the surplus line advisory organization a statutory joint arrangement and treats certain licensed surplus line brokers, including some members of the National Association of Registered Agents and Brokers, as its members if stated conditions are met.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.1. Surplus Line Advisory Organization [1780.50 - 1780.67] ( Chapter 6.1 added by Stats. 1993, Ch. 1007, Sec. 1. ) ## 1780.52. (a) The surplus line advisory organization shall be deemed a joint arrangement established by statute to assure the availability of insurance on a sound basis under paragraph (2) of subdivision (b) of Section 1861.03. (b) All surplus line brokers licensed under the surplus line law shall be deemed to be members of the advisory organization. (c) Any member of the National Association of Registered Agents and Brokers, licensed as a surplus line broker in his, her, or its home state of residence or business and paying the applicable California license fee, shall be deemed to be members of the advisory organization. This subdivision shall not be effective unless and until the advisory organization recognizes in writing the National Association of Registered Agents and Brokers is incorporated and operating under its board-adopted bylaws. (Amended by Stats. 2017, Ch. 477, Sec. 2. (AB 1641) Effective January 1, 2018.)
  170. 1780.53.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.1. Surplus Line Advisory Organization [1780.50 - 1780.67] ( Chapter 6.1 added by Stats. 1993, Ch. 1007, Sec. 1. )

    Verify source ↗

    The commissioner remains responsible for supervising and administering the surplus line law, including related regulatory decisions and initiatives.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.1. Surplus Line Advisory Organization [1780.50 - 1780.67] ( Chapter 6.1 added by Stats. 1993, Ch. 1007, Sec. 1. ) ## 1780.53. The commissioner shall remain fully responsible for supervising the implementation and administration of the surplus line law and for all regulatory decisions and initiatives in connection therewith, and nothing in this chapter shall be deemed or construed to diminish or impair the commissioner’s authority and responsibility. (Added by Stats. 1993, Ch. 1007, Sec. 1. Effective January 1, 1994.)
  171. 1780.54.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.1. Surplus Line Advisory Organization [1780.50 - 1780.67] ( Chapter 6.1 added by Stats. 1993, Ch. 1007, Sec. 1. )

    Verify source ↗

    An organization must meet specified qualifications and file required documents with the commissioner to be authorized, and the advisory organization must keep filings and its plan of operation updated.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.1. Surplus Line Advisory Organization [1780.50 - 1780.67] ( Chapter 6.1 added by Stats. 1993, Ch. 1007, Sec. 1. ) ## 1780.54. To be authorized to perform the duties delegated by the commissioner under this chapter and to exercise the authority incidental thereto, an organization must satisfy the requirements of this section. (a) The organization must be a private, nonprofit organization that has all the following qualifications: (1) Experience in professional surplus line brokerage, advisory, and regulatory activity in California or whose members possess that experience. (2) The administrative capability and recordkeeping facilities to process all surplus line filings in California. (3) The data processing capability and the necessary personnel to perform appropriate security review of all nonadmitted insurers. (4) The capability to perform the duties that may be delegated by the commissioner under this chapter and to exercise the authority incidental thereto. (b) An organization that has the qualifications described in subdivision (a) must file with the commissioner all of the following: (1) A copy of its constitution, its articles of agreement or association, or its certificate of incorporation. (2) A copy of its bylaws, if any. (3) A current list of its members. (4) The name and address of a resident of this state as agent for service of process. (5) A plan of operation identifying the duties set forth in Section 1780.56 that the organization proposes to perform and describing how the organization will perform those duties. (6) Any other documents, evidence, or information necessary to show that the organization complies with the provisions of this chapter. (c) The advisory organization shall file with the commissioner every material change in the documents required by subdivision (b), including every amendment to its plan of operation required by subdivision (d). (d) The advisory organization’s plan of operation shall be amended whenever necessary to conform to and effectuate the purposes of any amendments to this chapter or to the surplus line law or the regulations pertaining thereto. Further, the plan of operation shall be amended in response to any written request reasonably made by the commissioner to improve the advisory organization’s effectiveness in performing the duties delegated by the commissioner under this chapter. The commissioner’s requests under this subdivision shall be consistent with technical and economic feasibility and established techniques or practices for performing the types of activities encompassed by the duties delegated by the commissioner. (Added by Stats. 1993, Ch. 1007, Sec. 1. Effective January 1, 1994.)
  172. 1780.55.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.1. Surplus Line Advisory Organization [1780.50 - 1780.67] ( Chapter 6.1 added by Stats. 1993, Ch. 1007, Sec. 1. )

    Verify source ↗

    The commissioner must notify the organization of approval or disapproval, may provisionally approve and delegate duties, and may later withdraw delegated functions with notice. The organization must start and continue operations as the advisory organization when approval and delegation are in place.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.1. Surplus Line Advisory Organization [1780.50 - 1780.67] ( Chapter 6.1 added by Stats. 1993, Ch. 1007, Sec. 1. ) ## 1780.55. (a) Within 120 days after the filing of the documents required by subdivision (b) of Section 1780.54, the commissioner shall notify the organization in writing of the commissioner’s determination to approve or disapprove the organization’s qualifications and its plan of operation and which, if any, of the duties identified in the plan of operation the commissioner has determined to delegate to the organization. The commissioner and the organization shall confer to resolve any and all issues that the commissioner may raise concerning the organization’s qualifications, its plan of operation, or which duties should be delegated to the organization. Any determination by the commissioner to disapprove the organization’s qualifications or plan of operation or not to delegate one or more of the duties identified in the plan of operation shall be accompanied by a statement of the commissioner’s reasons therefor. (b) The commissioner may provisionally approve the organization’s qualifications and plan of operation and may provisionally delegate one or more of the duties identified in the plan of operation pending the commissioner’s determinations under subdivision (a). (c) Upon approval of the organization’s qualifications and plan of operation and upon delegation to the organization of one or more of the duties identified in the plan of operation, the organization shall commence operations as the advisory organization under this chapter, consistent with the duties delegated by the commissioner. In the event of provisional approval and delegation pursuant to subdivision (b), the organization shall operate as the advisory organization under this chapter during the period of, and consistent with, the provisional approval and delegation by the commissioner. (d) Any amendment to the advisory organization’s plan of operation that is required by subdivision (d) of Section 1780.54 shall be approved or disapproved pursuant to the procedures set forth in this section. (e) The time periods set forth in this section may be extended by consent of the organization and the commissioner. (f) The decision whether to delegate or withdraw one or more of the duties identified in the plan of operation is committed to the commissioner’s sound discretion. The commissioner may, upon not less than one year’s notice to the advisory organization, withdraw one or more functions that have been delegated to the advisory organization in order that any one or more functions so withdrawn may be performed by the Department of Insurance. (Added by Stats. 1993, Ch. 1007, Sec. 1. Effective January 1, 1994.)
  173. 1780.56.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.1. Surplus Line Advisory Organization [1780.50 - 1780.67] ( Chapter 6.1 added by Stats. 1993, Ch. 1007, Sec. 1. )

    Verify source ↗

    The commissioner may delegate surplus line duties to a qualified advisory organization, and the organization must carry out the delegated tasks and follow fee, reporting, notice, and record-access rules.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.1. Surplus Line Advisory Organization [1780.50 - 1780.67] ( Chapter 6.1 added by Stats. 1993, Ch. 1007, Sec. 1. ) ## 1780.56. (a) The commissioner may delegate one or more of the following duties to a qualified surplus line advisory organization under this chapter: (1) To receive, review, and record all documents required by law, regulation, or order to be filed with the commissioner or his or her designee with respect to foreign and alien nonadmitted insurers and any insurance placed with nonadmitted insurers, except that the advisory organization shall not receive documents submitted pursuant to subdivision (c) of Section 1763. The review under this subdivision shall be for completeness, accuracy, and any other matters the commissioner reasonably may direct the advisory organization to review. The advisory organization shall notify the filing surplus line broker in writing of any filing that the advisory organization determines to be incomplete or inaccurate, and shall request the filing broker to correct the problem. The advisory organization may, or as directed by the commissioner shall, notify the commissioner of incomplete or inaccurate filings. (2) To conduct a security review and analysis as directed by the commissioner, and to provide to the commissioner, and if directed by the commissioner, to the NAIC, a report on any nonadmitted insurer based on that review and analysis. The review and analysis under this subdivision shall take account of any matters the commissioner reasonably may direct the advisory organization to review and any other matters the advisory organization considers necessary or appropriate. (3) To make confidential recommendations to the commissioner and, if directed by the commissioner, to the NAIC, as to the suitability of any foreign or alien nonadmitted insurer to insure property or risks located or persons residing in this state or whether any foreign or alien nonadmitted insurer should be eligible or ineligible or approved pursuant to Section 1765.2. The advisory organization’s recommendations shall be based on any review and analysis that it performs under this chapter and on any additional information that may come to the advisory organization’s attention or that the commissioner reasonably may request the advisory organization to consider. (4) To report to the commissioner and other appropriate authorities instances of actual fraudulent or illegal insurance activity in the surplus line market that come to the advisory organization’s attention and any facts that come to the advisory organization’s attention that, in the reasonable judgment of the advisory organization, may indicate the presence of fraudulent or illegal insurance activity in the surplus line market or potential risk of harm to consumers of surplus line insurance. (5) To maintain and report information necessary or that reasonably may be requested by the commissioner for the calculation and collection of premium taxes on surplus line insurance premiums. (6) To respond to any request by the commissioner for comments on any proposed legislation or regulation affecting the placement of insurance pursuant to the surplus line law. (7) To receive and disseminate to its members information relating to surplus line insurance, to educate its members about the surplus line law and the regulations pertaining thereto, and to perform any specific educational activities that the commissioner reasonably may request. (8) To communicate with organizations of admitted insurers with respect to the proper use of the surplus line market. (9) To enter into written arrangements with the commissioner whereby the advisory organization will perform any other functions that, in the judgment of the commissioner and the advisory organization, will help the commissioner provide effective and cost-efficient supervision of the surplus line market. (b) If the commissioner delegates to the advisory organization one or more of the duties set forth in subdivision (a), the advisory organization also shall be authorized to assess a stamping fee for each policy, declarations page, cover note, or other premium bearing document submitted to the advisory organization. The stamping fee shall be established from time to time by the governing body of the advisory organization, shall reflect all reasonable costs associated with the services provided by the advisory organization, and may be reviewed by the commissioner for reasonableness as part of the commissioner’s examination of the advisory organization. Except as otherwise provided in this subdivision, the stamping fee may not exceed three-fourths of 1 percent of the premium for the insurance. Any proposed increase in the stamping fee above three-fourths of 1 percent shall be filed with the commissioner along with a written explanation of the reason for the increase, and the increase shall take effect upon the expiration of 60 days after the date of filing unless the commissioner disapproves it within that time. Within 60 days after the date of filing, the commissioner may provisionally approve the proposed increase, in which event the increase shall take effect immediately. The proposed increase shall be deemed fully approved upon the expiration of 120 days after the date of filing unless the commissioner disapproves the proposed increase within that time. The stamping fee shall be paid by the surplus line broker, provided, however, that the surplus line broker shall be allowed to receive and collect the stamping fee from the insured. (c) Nothing in this chapter shall affect any delegation by the commissioner pursuant to the surplus line law, provided, however, that once the commissioner delegates one or more of the duties set forth in this section and the advisory organization commences operations under this chapter, no other organization may simultaneously perform the same duties under this chapter or exercise the authority incidental thereto. (d) The advisory organization may cease performing the duties delegated by the commissioner under this chapter and exercising the authority incidental thereto at any time upon 180 days’ written notice to the commissioner. The commissioner may require the advisory organization to continue performing the duties under this chapter for up to an additional 180 days, and the commissioner shall be entitled, following receipt of notice from the advisory organization under this subdivision, to obtain copies of all unprivileged files, documents, and records maintained by the advisory organization on behalf of the commissioner under this chapter. (e) The commissioner’s findings, determinations, rules, rulings, and orders under this chapter shall apply only to the advisory organization’s right to perform the duties delegated by the commissioner under this chapter and to exercise the authority incidental thereto. Nothing in this chapter shall be deemed or construed to affect the advisory organization’s right to exist and function as a private, nonprofit organization, with all powers attendant thereto, and to engage in lawful activities other than under the authority of this chapter. (Amended by Stats. 2011, Ch. 83, Sec. 31. (AB 315) Effective July 15, 2011. Operative July 21, 2011, by Sec. 34 of Stats. 2011, Ch. 83.)
  174. 1780.57.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.1. Surplus Line Advisory Organization [1780.50 - 1780.67] ( Chapter 6.1 added by Stats. 1993, Ch. 1007, Sec. 1. )

    Verify source ↗

    If the commissioner delegates certain duties, the surplus line advisory organization may exercise related authority and carry out listed support activities.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.1. Surplus Line Advisory Organization [1780.50 - 1780.67] ( Chapter 6.1 added by Stats. 1993, Ch. 1007, Sec. 1. ) ## 1780.57. If the commissioner delegates to the surplus line advisory organization one or more of the duties set forth in Section 1780.56, the advisory organization also shall be authorized to exercise the authority, in connection with those duties and incidental thereto: (a) To facilitate and encourage compliance by its members with the laws of California and the rules and regulations of the commissioner relating to surplus line insurance. (b) To maintain files for all documents received under this chapter and any other files the commissioner reasonably may direct the advisory organization to maintain. (c) To provide comments on any proposed legislation or regulation. (d) To make contracts necessary or appropriate to effect the purposes of this chapter and to perform the duties delegated by the commissioner under this chapter and to exercise the authority incidental thereto. (e) To employ and retain whatever persons are necessary to perform the duties delegated by the commissioner under this chapter and to exercise the authority incidental thereto. (f) To perform any other acts necessary or appropriate to monitor the surplus line business and to effect the purposes of this chapter as well as the surplus line law and the regulations pertaining thereto, consistent with the duties delegated by the commissioner under this chapter. (Added by Stats. 1993, Ch. 1007, Sec. 1. Effective January 1, 1994.)
  175. 1780.58.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.1. Surplus Line Advisory Organization [1780.50 - 1780.67] ( Chapter 6.1 added by Stats. 1993, Ch. 1007, Sec. 1. )

    Verify source ↗

    The surplus line advisory organization is supervised by the commissioner and must report annually; the commissioner must examine it at least every three years and may hold a hearing after a report is issued.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.1. Surplus Line Advisory Organization [1780.50 - 1780.67] ( Chapter 6.1 added by Stats. 1993, Ch. 1007, Sec. 1. ) ## 1780.58. (a) The surplus line advisory organization shall be subject to the supervision of the commissioner, including, but not limited to, the powers of the commissioner pursuant to Article 6.5 (commencing with Section 790) of Chapter 1 of Part 2 of Division 1, and Article 1 (commencing with Section 12919) of Chapter 2 of Division 3. (b) The advisory organization shall prepare and submit an annual report on the performance of its duties under this chapter in the form and manner required by the commissioner and may advise the commissioner from time to time concerning any other matters relevant to its duties or the regulation of the surplus line market. (c) The commissioner shall, at least once every three years, make or cause to be made an examination of the advisory organization, including the reasonableness of its costs. The examination may be made by independent auditors retained for that purpose by the commissioner. The reasonable cost of the examination shall be paid to the commissioner or, if the commissioner retains independent auditors for that purpose, directly to the independent auditors, by the advisory organization upon presentation by the commissioner, or by the independent auditors, of a detailed account of the cost. The commissioner shall furnish two copies of the examination report to the advisory organization. (d) Within 20 days of receiving the commissioner’s examination report, the advisory organization may request a hearing on the report or on any facts or recommendations contained therein by mailing written notice to the commissioner specifying the matters to be considered at the hearing. The commissioner shall hold a hearing within 60 days on those aspects of the examination report and on any other aspects of the report that the commissioner designates for consideration. (Added by Stats. 1993, Ch. 1007, Sec. 1. Effective January 1, 1994.)
  176. 1780.59.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.1. Surplus Line Advisory Organization [1780.50 - 1780.67] ( Chapter 6.1 added by Stats. 1993, Ch. 1007, Sec. 1. )

    Verify source ↗

    If the commissioner has good cause to think the advisory organization is not complying, the commissioner must give written notice and allow at least 10 days to fix the problem.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.1. Surplus Line Advisory Organization [1780.50 - 1780.67] ( Chapter 6.1 added by Stats. 1993, Ch. 1007, Sec. 1. ) ## 1780.59. (a) If, as a result of the commissioner’s examination of the surplus line advisory organization or otherwise, there is good cause to believe that the advisory organization does not comply with any provision of this chapter or with any written request reasonably made by the commissioner pursuant to the provisions of this chapter, the commissioner shall give notice in writing to the advisory organization, stating in what manner and to what extent noncompliance is alleged to exist and specifying a reasonable time, not less than 10 days thereafter, in which the noncompliance may be corrected. Notices under this section shall be confidential as between the commissioner and the advisory organization unless a hearing is held under Section 1780.60. (b) For purposes of this chapter, noncompliance includes any material failure by the advisory organization to perform adequately the duties delegated by the commissioner under this chapter or exercise properly the authority incidental thereto. (Added by Stats. 1993, Ch. 1007, Sec. 1. Effective January 1, 1994.)
  177. 1780.60.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.1. Surplus Line Advisory Organization [1780.50 - 1780.67] ( Chapter 6.1 added by Stats. 1993, Ch. 1007, Sec. 1. )

    Verify source ↗

    The commissioner may hold a hearing and issue emergency orders against the surplus line advisory organization, but must give written notice, limit the hearing to noticed issues, and follow specific deadlines.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.1. Surplus Line Advisory Organization [1780.50 - 1780.67] ( Chapter 6.1 added by Stats. 1993, Ch. 1007, Sec. 1. ) ## 1780.60. (a) If there is good cause to believe that the surplus line advisory organization’s noncompliance with any provision of this chapter is willful, or if within the period prescribed by the commissioner in the notice required by subdivision (a) of Section 1780.59 the advisory organization does not make the changes necessary to correct the noncompliance specified by the commissioner or establish to the satisfaction of the commissioner that noncompliance does not exist, then the commissioner may hold a hearing in connection therewith, provided that within a reasonable period of time, which shall not be less than 30 days before the date of the hearing, the commissioner shall mail written notice specifying the matters to be considered at the hearing to the advisory organization. The notice shall conform to the requirements for an accusation as prescribed by Section 11503 of the Government Code. If no notice has been given as provided in subdivision (a) of Section 1780.59, notice shall be given as to the manner and extent of noncompliance that is alleged to exist. The hearing shall not include any subjects not specified in the notices required by subdivision (a) of Section 1780.59 or this section, except that if the hearing relates to or is based upon any aspect of the commissioner’s examination report on the advisory organization, the hearing shall also include any other aspect of the report that the advisory organization designates for consideration. (b) In the event the commissioner reasonably determines that the advisory organization is engaged in fraudulent activity or malfeasance in the performance of the duties delegated by the commissioner under this chapter or in the exercise of the authority incidental thereto or otherwise is in violation of or noncompliance with any provision of this chapter, and that conduct has resulted, or is likely to result, in a significant, adverse, and immediate effect on the public or the commissioner’s ability to regulate the surplus line business that, because of the emergency nature of the effect on the public or the commissioner’s ability to regulate the surplus line business, cannot reasonably be remedied under the other provisions of this chapter, the commissioner may issue an order, without prior hearing, directing the advisory organization to cease and desist from the conduct or suspending or revoking all or part of the advisory organization’s authorization to perform the duties delegated by the commissioner under this chapter, in addition to imposing any other penalty provided for in this code. An order under this subdivision may, if necessary, also direct the advisory organization to preserve documents and records and to grant immediate access by the commissioner’s authorized representatives to the advisory organization’s premises to examine and make copies of any and all unprivileged documents and records of the advisory organization maintained on behalf of the commissioner pursuant to this chapter. Within five days after issuing an order under this subdivision, the commissioner shall issue the notice and shall thereafter hold the hearing under subdivision (a) of this section, provided, however, that: (1) The notice shall include a statement of the factual bases for issuance of the order under this subdivision. (2) The notice shall be delivered to the advisory organization’s offices within one day of issuance. (3) The advisory organization shall be granted a hearing upon 10 days’ written request to the commissioner or upon the hearing date set by the commissioner, whichever is earlier. (4) Within 10 days following the hearing under this subdivision, the commissioner shall confirm, modify, or withdraw the summary order issued prior to hearing under this subdivision. (Added by Stats. 1993, Ch. 1007, Sec. 1. Effective January 1, 1994.)
  178. 1780.61.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.1. Surplus Line Advisory Organization [1780.50 - 1780.67] ( Chapter 6.1 added by Stats. 1993, Ch. 1007, Sec. 1. )

    Verify source ↗

    After a hearing, the commissioner may order an advisory organization to stop a violation, and may suspend or revoke its delegated authorization if it ignores a final order or willfully commits fraudulent or dishonest acts.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.1. Surplus Line Advisory Organization [1780.50 - 1780.67] ( Chapter 6.1 added by Stats. 1993, Ch. 1007, Sec. 1. ) ## 1780.61. If, after a hearing pursuant to subdivision (d) of Section 1780.58 or subdivision (a) of Section 1780.60, the commissioner finds: (a) That the advisory organization has violated or failed to comply with any provision of this chapter, the commissioner may issue an order to the advisory organization, specifying in what respect the violation or noncompliance exists and stating when, within a reasonable period of time, the violation or noncompliance shall cease. (b) That the advisory organization has failed to comply with a final order of the commissioner under subdivision (a) within the time prescribed by the commissioner’s order or by any extension thereof which the commissioner may grant, the commissioner may issue an order suspending or revoking all or part of the advisory organization’s authorization to perform the duties delegated by the commissioner under this chapter, in addition to imposing any other penalty provided for in this chapter. (c) That the advisory organization has willfully engaged in any fraudulent or dishonest act or practice, the commissioner may issue an order suspending or revoking all or part of the advisory organization’s authorization to perform the duties delegated by the commissioner under this chapter, in addition to imposing any other penalty provided for in this code. (Added by Stats. 1993, Ch. 1007, Sec. 1. Effective January 1, 1994.)
  179. 1780.62.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.1. Surplus Line Advisory Organization [1780.50 - 1780.67] ( Chapter 6.1 added by Stats. 1993, Ch. 1007, Sec. 1. )

    Verify source ↗

    Certain proceedings must follow Government Code Chapter 5 rules, and the commissioner has the powers granted there. Hearings must be conducted by administrative law judges chosen under Government Code Section 11502 or appointed by the commissioner.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.1. Surplus Line Advisory Organization [1780.50 - 1780.67] ( Chapter 6.1 added by Stats. 1993, Ch. 1007, Sec. 1. ) ## 1780.62. Except as otherwise provided in this chapter, the proceedings required or authorized by subdivision (d) of Section 1780.58 and by Sections 1780.60 and 1780.61 shall be conducted in accordance with the provisions of Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, and the commissioner shall have all the powers granted therein. Hearings shall be conducted by administrative law judges chosen under Section 11502 of the Government Code or appointed by the commissioner. (Added by Stats. 1993, Ch. 1007, Sec. 1. Effective January 1, 1994.)
  180. 1780.63.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.1. Surplus Line Advisory Organization [1780.50 - 1780.67] ( Chapter 6.1 added by Stats. 1993, Ch. 1007, Sec. 1. )

    Verify source ↗

    Commissioner decisions under this chapter can be reviewed by state courts, and the advisory organization may seek judicial review within 30 days and ask a court to stay or enjoin the decision for good cause.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.1. Surplus Line Advisory Organization [1780.50 - 1780.67] ( Chapter 6.1 added by Stats. 1993, Ch. 1007, Sec. 1. ) ## 1780.63. (a) Any finding, determination, rule, ruling, or order made by the commissioner under this chapter shall be subject to review by the courts of this state, and proceedings on review shall be conducted in accordance with the provisions of the Code of Civil Procedure. In proceedings on review, the court shall apply the substantial evidence standard set forth in subdivision (c) of Section 1094.5 of the Code of Civil Procedure. (b) Notwithstanding any other provision of law to the contrary, a petition for judicial review of any finding, determination, rule, ruling, or order of the commissioner may be filed within 30 days after the effective date thereof. Upon application by the advisory organization, a court may for good cause stay or enjoin the effect of any finding, determination, rule, ruling, or order of the commissioner issued pursuant to this chapter. (c) The advisory organization shall have legal standing to bring and defend actions, in the name of the advisory organization, in administrative and judicial proceedings, with all powers attendant thereto. (Added by Stats. 1993, Ch. 1007, Sec. 1. Effective January 1, 1994.)
  181. 1780.64.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.1. Surplus Line Advisory Organization [1780.50 - 1780.67] ( Chapter 6.1 added by Stats. 1993, Ch. 1007, Sec. 1. )

    Verify source ↗

    A willful failure to comply with a final commissioner order can trigger a larger state penalty, and willful violations of the chapter are misdemeanors.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.1. Surplus Line Advisory Organization [1780.50 - 1780.67] ( Chapter 6.1 added by Stats. 1993, Ch. 1007, Sec. 1. ) ## 1780.64. (a) If the surplus line advisory organization, or any of its officers, committee members, agents, or employees, fails to comply with a final order of the commissioner under this chapter, the advisory organization or the person shall be liable to the state in an amount not exceeding one hundred dollars ($100), but if the failure is willful, the advisory organization or the person shall be liable to the state in an amount not exceeding five thousand dollars ($5,000) for the failure. The commissioner shall collect the amount so payable and may bring an action in the name of the people of the State of California to enforce collection. These penalties may be in addition to any other penalties provided by law. (b) A willful violation of any provision of this chapter by any person is a misdemeanor. (Added by Stats. 1993, Ch. 1007, Sec. 1. Effective January 1, 1994.)
  182. 1780.65.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.1. Surplus Line Advisory Organization [1780.50 - 1780.67] ( Chapter 6.1 added by Stats. 1993, Ch. 1007, Sec. 1. )

    Verify source ↗

    The commissioner may review actions of the surplus line advisory organization if an adversely affected person petitions and available internal remedies have been exhausted.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.1. Surplus Line Advisory Organization [1780.50 - 1780.67] ( Chapter 6.1 added by Stats. 1993, Ch. 1007, Sec. 1. ) ## 1780.65. Any action by the surplus line advisory organization may be reviewed by the commissioner upon petition by any person adversely affected thereby, but only after all applicable remedies available under the advisory organization’s constitution, articles, and bylaws, if any, have been exhausted. (Added by Stats. 1993, Ch. 1007, Sec. 1. Effective January 1, 1994.)
  183. 1780.66.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.1. Surplus Line Advisory Organization [1780.50 - 1780.67] ( Chapter 6.1 added by Stats. 1993, Ch. 1007, Sec. 1. )

    Verify source ↗

    This section generally protects the surplus line advisory organization, its related people, and the Department of Insurance from liability for actions taken or omitted in performing duties or authority under this chapter, unless bad faith is shown.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.1. Surplus Line Advisory Organization [1780.50 - 1780.67] ( Chapter 6.1 added by Stats. 1993, Ch. 1007, Sec. 1. ) ## 1780.66. (a) There shall be no liability on the part of, and no cause of action of any nature shall arise against, the surplus line advisory organization, or its members, officers, committee members, agents, or employees, or the Department of Insurance, the commissioner, or employees or representatives of the Department of Insurance, for any action taken or omitted by any of them in the performance of their duties or the exercise of their authority under this chapter, unless it can be shown that any of the parties specified in this subdivision acted in bad faith. The performance of any duty to the advisory organization delegated by the commissioner under this chapter or the exercise of any authority incidental thereto is an official duty of the advisory organization. Nothing in this subdivision shall be deemed or construed to grant any immunity, or any defense to liability, to a surplus line broker for that broker’s failure to comply with the surplus line law or the regulations pertaining thereto. (b) The advisory organization’s communications with the commissioner and other appropriate authorities pursuant to its performance of the duties delegated by the commissioner under this chapter or its exercise of the authority incidental thereto shall be considered communications by an interested person to another interested person under the provisions of subdivision (c) of Section 47 of the Civil Code and shall be deemed confidential communications as defined in Section 12919. (c) The immunities and privileges afforded by this section shall not affect the availability of any other immunities or privileges afforded by law and shall not affect any of the rights of hearing and review under, or any other provisions of, this chapter. (Added by Stats. 1993, Ch. 1007, Sec. 1. Effective January 1, 1994.)
  184. 1780.67.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.1. Surplus Line Advisory Organization [1780.50 - 1780.67] ( Chapter 6.1 added by Stats. 1993, Ch. 1007, Sec. 1. )

    Verify source ↗

    The advisory organization must notify the commissioner 30 days before electing its governing body, submit certain executive candidate information for review, and follow commissioner objections or disapprovals; people disciplined for certain insurance-law violations in the past 10 years generally may not serve on the governing body unless the commissioner waives the rule.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.1. Surplus Line Advisory Organization [1780.50 - 1780.67] ( Chapter 6.1 added by Stats. 1993, Ch. 1007, Sec. 1. ) ## 1780.67. (a) No person shall serve on the governing body of the surplus line advisory organization if in the past 10 years that person has been disciplined for violating the insurance laws or regulations of this state. The commissioner may waive this provision if the prior violation is not material to the person’s fitness to serve. (b) At least 30 days prior to the election of its governing body, the advisory organization shall advise the commissioner of the names of the persons nominated for election to the governing body. If, prior to the election, the commissioner objects on reasonable grounds to the fitness to serve of any nominee or nominees, the nominee or nominees shall not qualify for that election. (c) The advisory organization shall select and determine the terms of employment of its employees. The name and qualifications of any candidate for the permanent full-time position of executive director, manager, or chief operating officer of the advisory organization shall be submitted for the commissioner’s review. If, within 30 days after the submission of the candidate’s name and qualifications to the commissioner, the commissioner disapproves on reasonable grounds that candidate’s fitness to serve, the candidate shall not serve as the executive director, manager, or chief operating officer of the advisory organization. (Added by Stats. 1993, Ch. 1007, Sec. 1. Effective January 1, 1994.)
  185. 1781.1.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.5. Reinsurance Intermediaries [1781.1 - 1781.14] ( Chapter 6.5 added by Stats. 1991, Ch. 1009, Sec. 1. )

    Verify source ↗

    This chapter may be cited as the Reinsurance Intermediary Act.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.5. Reinsurance Intermediaries [1781.1 - 1781.14] ( Chapter 6.5 added by Stats. 1991, Ch. 1009, Sec. 1. ) ## 1781.1. This chapter shall be known and may be cited as the Reinsurance Intermediary Act. (Added by Stats. 1991, Ch. 1009, Sec. 1.)
  186. 1781.10.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.5. Reinsurance Intermediaries [1781.1 - 1781.14] ( Chapter 6.5 added by Stats. 1991, Ch. 1009, Sec. 1. )

    Verify source ↗

    Reinsurance intermediaries are subject to commissioner examination, and the commissioner can inspect their books, bank accounts, and records.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.5. Reinsurance Intermediaries [1781.1 - 1781.14] ( Chapter 6.5 added by Stats. 1991, Ch. 1009, Sec. 1. ) ## 1781.10. (a) A reinsurance intermediary shall be subject to examination by the commissioner. The commissioner shall have access to all books, bank accounts, and records of each reinsurance intermediary in a form usable to the commissioner. (b) A reinsurance intermediary-manager may be examined as if it were the reinsurer. (c) All documents and information disclosed in connection with the examination of a reinsurance intermediary may be used by the commissioner and shall be given confidential treatment by the commissioner to the same extent as provided in Section 735.5 for documents and information disclosed in connection with the examination of an insurer. (d) An examination shall be at the expense of the reinsurance intermediary. The commissioner may revoke the license of the reinsurance intermediary for a refusal to promptly pay the examination expense when due. (Amended by Stats. 2006, Ch. 321, Sec. 4. Effective January 1, 2007.)
  187. 1781.11.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.5. Reinsurance Intermediaries [1781.1 - 1781.14] ( Chapter 6.5 added by Stats. 1991, Ch. 1009, Sec. 1. )

    Verify source ↗

    If a reinsurance intermediary, insurer, or reinsurer is found in violation of this chapter after a hearing, the commissioner may impose a penalty of up to $5,000 for each violation and may revoke or suspend the entity’s license or certificate of authority.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.5. Reinsurance Intermediaries [1781.1 - 1781.14] ( Chapter 6.5 added by Stats. 1991, Ch. 1009, Sec. 1. ) ## 1781.11. (a) A reinsurance intermediary, insurer, or reinsurer found by the commissioner to be in violation of this chapter, after a hearing conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code by an administrative law judge either chosen under Section 11502 of the Government Code or appointed by the commissioner, shall be subject to all of the following: (1) For each separate violation, a penalty in an amount not exceeding five thousand dollars ($5,000). (2) Be subject to revocation or suspension of its license or certificate of authority. (b) Nothing contained in this section shall affect the right of the commissioner to impose or issue any other penalties or orders authorized by law. (c) Nothing contained in this chapter shall in any manner limit or restrict the rights of policyholders, claimants, creditors, or other third parties or confer any rights upon those persons or otherwise limit any other authority required or authorized to be exercised under this code by the commissioner. (Added by Stats. 1991, Ch. 1009, Sec. 1.)
  188. 1781.12.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.5. Reinsurance Intermediaries [1781.1 - 1781.14] ( Chapter 6.5 added by Stats. 1991, Ch. 1009, Sec. 1. )

    Verify source ↗

    The commissioner may adopt reasonable rules and regulations to implement and administer this chapter.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.5. Reinsurance Intermediaries [1781.1 - 1781.14] ( Chapter 6.5 added by Stats. 1991, Ch. 1009, Sec. 1. ) ## 1781.12. The commissioner may adopt reasonable rules and regulations for the implementation and administration of this chapter. (Added by Stats. 1991, Ch. 1009, Sec. 1.)
  189. 1781.13.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.5. Reinsurance Intermediaries [1781.1 - 1781.14] ( Chapter 6.5 added by Stats. 1991, Ch. 1009, Sec. 1. )

    Verify source ↗

    An insurer or reinsurer may not keep using a reinsurance intermediary after January 1, 1992 unless that use complies with this chapter.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.5. Reinsurance Intermediaries [1781.1 - 1781.14] ( Chapter 6.5 added by Stats. 1991, Ch. 1009, Sec. 1. ) ## 1781.13. No insurer or reinsurer may continue to utilize the services of a reinsurance intermediary on and after January 1, 1992, unless utilization is in compliance with this chapter. (Added by Stats. 1991, Ch. 1009, Sec. 1.)
  190. 1781.14.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.5. Reinsurance Intermediaries [1781.1 - 1781.14] ( Chapter 6.5 added by Stats. 1991, Ch. 1009, Sec. 1. )

    Verify source ↗

    A reinsurance intermediary must comply with certain court or arbitration orders for documents or testimony, but may object to the scope or timing of compliance.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.5. Reinsurance Intermediaries [1781.1 - 1781.14] ( Chapter 6.5 added by Stats. 1991, Ch. 1009, Sec. 1. ) ## 1781.14. (a) A reinsurance intermediary shall comply with any order of a court of competent jurisdiction or a duly constituted arbitration panel requiring the production of nonprivileged documents by the reinsurance intermediary, or the testimony of an employee or other individual otherwise under control of the reinsurance intermediary with respect to any reinsurance transaction for which it acted as a reinsurance intermediary. (b) Compliance with subdivision (a) shall be subject to the right of the reinsurance intermediary and the parties to the transaction to object to the court or arbitration panel concerning the nature or scope of the documents or testimony or the time within which it must comply with the order. Failure to comply with the order shall be deemed to be a material noncompliance with this chapter. (Added by Stats. 2006, Ch. 321, Sec. 5. Effective January 1, 2007.)
  191. 1781.2.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.5. Reinsurance Intermediaries [1781.1 - 1781.14] ( Chapter 6.5 added by Stats. 1991, Ch. 1009, Sec. 1. )

    Verify source ↗

    This section defines key terms used in the reinsurance intermediaries chapter.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.5. Reinsurance Intermediaries [1781.1 - 1781.14] ( Chapter 6.5 added by Stats. 1991, Ch. 1009, Sec. 1. ) ## 1781.2. As used in this chapter: (a) “Actuary” means a person who is a member in good standing of the American Academy of Actuaries, the Casualty Actuarial Society, or the Society of Actuaries, and is qualified to sign statements of actuarial opinion on loss reserves. (b) “Controlling person” means any person, firm, association, or corporation who directly or indirectly has the power to direct or cause to be directed, the management, control, or activities of a reinsurance intermediary. (c) “Insurer” means any person, firm, association, or corporation admitted by the commissioner as an insurer in this state. (d) “Licensed producer” means a licensed insurance agent, broker, or reinsurance intermediary. (e) “Qualified United States financial institution” means an institution that meets all of the following criteria: (1) Is organized or (in the case of a domestic office of a foreign banking organization) licensed, under the laws of the United States or any state thereof. (2) Is regulated, supervised, and examined by federal or state authorities having regulatory authority over banks and trust companies. (3) Has been determined by either the commissioner or the Securities Valuation Office of the National Association of Insurance Commissioners, to meet standards of financial condition and standing as are considered necessary and appropriate to regulate the quality of financial institutions whose letters of credit will be acceptable to the commissioner. (f) “Reinsurance intermediary” means a reinsurance intermediary-broker or a reinsurance intermediary-manager. (g) “Reinsurance intermediary-broker” means any person, other than an officer or employee of the ceding insurer, firm, association, or corporation that solicits, negotiates, or places reinsurance cessions or retrocessions on behalf of a ceding insurer without the authority or power to bind reinsurance on behalf of that insurer. (h) “Reinsurance intermediary-manager” means any person, firm, association, or corporation that has authority to bind, or manages all or part of the assumed reinsurance business of, a reinsurer (including the management of a separate division, department, or underwriting office) and acts as an agent for the reinsurer whether known as a reinsurance intermediary-manager, manager, or other similar term. However, “reinsurance intermediary-manager” does not include any of the following: (1) An employee of the reinsurer. (2) A domestic manager of a United States branch of an alien reinsurer. (3) An underwriting manager that, pursuant to contract, manages all or any portion of the reinsurance operations of the reinsurer, that is under common control with the reinsurer, that is subject to Article 4.7 (commencing with Section 1215) of Chapter 2, and the compensation of which is not based on the volume of premiums written. (4) The manager of a group, association, pool, or organization of insurers which engage in joint underwriting or joint reinsurance and that are subject to examination by the insurance regulatory agency or official of the state in which the manager’s principal business office is located. (i) “Reinsurer” means any person, firm, association, or corporation admitted in this state as an insurer with the authority to assume reinsurance. (j) “Violation” means the failure of a reinsurance intermediary, or an insurer or reinsurer for whom the reinsurance intermediary was acting, to comply with any provision of this chapter. (Added by Stats. 1991, Ch. 1009, Sec. 1.)
  192. 1781.3.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.5. Reinsurance Intermediaries [1781.1 - 1781.14] ( Chapter 6.5 added by Stats. 1991, Ch. 1009, Sec. 1. )

    Verify source ↗

    People and businesses may not act as reinsurance intermediary-brokers or reinsurance intermediary-managers in this state unless they meet the licensing rules in this section; the commissioner can issue, refuse, and condition licenses.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.5. Reinsurance Intermediaries [1781.1 - 1781.14] ( Chapter 6.5 added by Stats. 1991, Ch. 1009, Sec. 1. ) ## 1781.3. (a) No person, firm, association, or corporation shall act as a reinsurance intermediary-broker in this state unless licensed as follows: (1) If the reinsurance intermediary-broker maintains an office, (either directly or as a member or employee of a firm or association, or an officer, director, or employee of a corporation) in this state, the reinsurance intermediary-broker shall be a licensed producer in this state. (2) If the reinsurance intermediary-broker does not maintain an office in this state, the reinsurance intermediary-broker shall be a licensed producer in this state or another state having a law substantially similar to this chapter or shall be licensed in this state as a nonresident reinsurance intermediary. (3) Unless denied licensure pursuant to subdivision (e), a nonresident person shall receive a reinsurance intermediary-broker license if all of the following requirements are met: (A) The person is currently licensed and in good standing in the state, territory of the United States, or province of Canada where he or she is licensed as a resident reinsurance intermediary-broker. (B) The person has submitted the proper request for licensure and has paid the fees required by paragraph (3) of subdivision (d). (C) The person has submitted or transmitted to the commissioner the application for licensure that the person submitted to the state, territory of the United States, or province of Canada where he or she is licensed as a resident, or submitted or transmitted to the commissioner a completed National Association of Insurance Commissioners Uniform Nonresident Application. (D) The state, territory of the United States, or province of Canada where the person holds a resident reinsurance intermediary-broker license awards nonresident reinsurance intermediary-broker licenses to residents of this state on the same basis. (b) A person, firm, association, or corporation shall not act as a reinsurance intermediary-manager: (1) For a reinsurer domiciled in this state, unless the reinsurance intermediary-manager is a licensed producer in this state. (2) In this state, if the reinsurance intermediary-manager maintains an office either directly or as a member or employee of a firm or association, or as an officer, director, or employee of a corporation in this state, unless the reinsurance intermediary-manager is a licensed producer in this state. (3) In another state for a nondomestic admitted insurer, unless the reinsurance intermediary-manager is a licensed producer in this state or in another state having a law substantially similar to this chapter or the person is licensed in this state as a nonresident reinsurance intermediary. (4) Unless denied licensure pursuant to subdivision (e), a nonresident person shall receive a reinsurance intermediary-manager license if all of the following requirements are met: (A) The person is currently licensed and in good standing in the state, territory of the United States, or province of Canada where he or she is licensed as a resident reinsurance intermediary-manager. (B) The person has submitted the proper request for licensure and has paid the fees required by paragraph (3) of subdivision (d). (C) The person has submitted or transmitted to the commissioner the application for licensure that the person submitted to the state, territory of the United States, or province of Canada where he or she is licensed as a resident, or submitted or transmitted to the commissioner a completed National Association of Insurance Commissioners Uniform Nonresident Application. (D) The state, territory of the United States, or province of Canada where the person holds a resident reinsurance intermediary-manager license awards nonresident reinsurance intermediary-manager licenses to residents of this state on the same basis. (c) The commissioner may require a reinsurance intermediary-manager subject to subdivision (b) to do both of the following: (1) File a fidelity bond issued by an admitted surety in an amount determined by the commissioner for the protection of the reinsurer. (2) Maintain an errors and omissions policy in an amount acceptable to the commissioner. (d) (1) The commissioner may issue a reinsurance intermediary license to any person, firm, association, or corporation that has complied with the applicable requirements of this chapter. This license, when issued to a firm or association, authorizes all the members of the firm or association and any designated employees to act as reinsurance intermediaries under the license, and all these persons shall be named in the application and any supplements thereto. This license, when issued to a corporation, authorizes all of the officers, and any designated employees and directors thereof to act as reinsurance intermediaries on behalf of the corporation, and all these persons shall be named in the application and any supplements thereto. (2) Any application for licensure as a reinsurance intermediary under this subdivision shall be made on a form prescribed by the commissioner and shall be accompanied by an application fee of three hundred seventy-four dollars ($374). (e) The commissioner may refuse to issue a reinsurance intermediary license if, in his or her judgment, the applicant, any person named on the application, or any member, principal, officer, or director of the applicant, is determined by the commissioner not to be trustworthy, or that any controlling person of the applicant is not trustworthy to act as a reinsurance intermediary, or that any of the foregoing has given cause for revocation or suspension of a reinsurance intermediary license, or has failed to comply with any prerequisite for the issuance of a license. Upon written request therefor, the commissioner shall furnish the applicant with a summary of the basis for refusal to issue a reinsurance intermediary license, which document shall not be subject to inspection as a public record. (f) Licensed attorneys at law when acting in their professional capacity as such shall be exempt from this section. (g) A reinsurance intermediary-manager, when acting in that capacity and in compliance with this chapter, shall not be required to separately comply with Article 5.4 (commencing with Section 769.80) of Chapter 1 (if added by Senate Bill 1039 of the 1991–92 Regular Session) in order to engage in conduct authorized by both this chapter and that article. (Amended by Stats. 2017, Ch. 534, Sec. 48. (AB 1699) Effective January 1, 2018.)
  193. 1781.4.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.5. Reinsurance Intermediaries [1781.1 - 1781.14] ( Chapter 6.5 added by Stats. 1991, Ch. 1009, Sec. 1. )

    Verify source ↗

    Reinsurance intermediary-broker transactions with the insurer it represents must be covered by a written authorization, and the broker must follow several account, fund-handling, disclosure, and compliance rules.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.5. Reinsurance Intermediaries [1781.1 - 1781.14] ( Chapter 6.5 added by Stats. 1991, Ch. 1009, Sec. 1. ) ## 1781.4. Transactions between a reinsurance intermediary-broker and the insurer it represents in that capacity shall only be entered into pursuant to a written authorization specifying the responsibilities of each party. The authorization shall, at a minimum, contain provisions specifying all of the following rights and obligations: (a) The insurer may terminate the reinsurance intermediary-broker’s authority at any time. (b) The reinsurance intermediary-broker shall render accounts to the insurer accurately detailing all material transactions, including information necessary to support all commissions, charges, and other fees received by, or owing to, the reinsurance intermediary-broker, and remit all funds due to the insurer within 30 days of receipt. (c) All funds collected for the insurer’s account will be held by the reinsurance intermediary-broker in a fiduciary capacity in a bank which is a qualified United States financial institution. (d) The reinsurance intermediary-broker will comply with Section 1781.5. (e) The reinsurance intermediary-broker will comply with written standards established by the insurer for the cession or retrocession of all insured risks. (f) The reinsurance intermediary-broker will disclose to the insurer any relationship with any reinsurer to which insured risk will be ceded or retroceded. (Added by Stats. 1991, Ch. 1009, Sec. 1.)
  194. 1781.5.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.5. Reinsurance Intermediaries [1781.1 - 1781.14] ( Chapter 6.5 added by Stats. 1991, Ch. 1009, Sec. 1. )

    Verify source ↗

    A reinsurance intermediary-broker must keep complete transaction records for at least 10 years after each reinsurance contract expires, and the insurer may access, copy, and audit the broker’s records related to its business.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.5. Reinsurance Intermediaries [1781.1 - 1781.14] ( Chapter 6.5 added by Stats. 1991, Ch. 1009, Sec. 1. ) ## 1781.5. (a) For at least 10 years after expiration of each contract of reinsurance transacted by a reinsurance intermediary-broker, the reinsurance intermediary-broker shall keep a complete record for each transaction, including all of the following: (1) The type of contract, limits, underwriting restriction, classes or risks, and territory. (2) The period of coverage, including effective and expiration dates, cancellation provisions, and the notice required for cancellation. (3) Reporting and settlement requirements for balances. (4) The rate used to compute the reinsurance premium. (5) The names and addresses of assuming reinsurers. (6) The rates of all reinsurance commissions, including the commissions on any retrocession, handled by the reinsurance intermediary-broker. (7) Related correspondence and memoranda. (8) Proof of placement. (9) Details regarding retrocession handled by the reinsurance intermediary-brokers, including the identity of retrocessionaires and the percentage of each contract assumed or ceded. (10) Financial records, including, but not limited to, premium and loss accounts. (11) If the reinsurance intermediary-broker procures a reinsurance contract on behalf of an admitted ceding insurer directly from the assuming reinsurer, the record of the transaction shall include written evidence that the assuming reinsurer has agreed to assume the risk. If the reinsurance intermediary-broker procures a reinsurance contract on behalf of an admitted ceding insurer that is placed through a representative of the assuming reinsurer, other than an employee thereof, the record of the transaction shall include written evidence that the reinsurer has delegated binding authority to the representative. (b) The insurer shall have access and the right to copy and audit all accounts and records maintained by the reinsurance intermediary-broker related to its business in a form usable by the insurer. (Added by Stats. 1991, Ch. 1009, Sec. 1.)
  195. 1781.6.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.5. Reinsurance Intermediaries [1781.1 - 1781.14] ( Chapter 6.5 added by Stats. 1991, Ch. 1009, Sec. 1. )

    Verify source ↗

    An insurer may only use a reinsurance intermediary-broker if the person is properly licensed, may not employ certain individuals connected to that broker unless the common-control exception applies, and must obtain annual financial-condition statements from each broker it uses.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.5. Reinsurance Intermediaries [1781.1 - 1781.14] ( Chapter 6.5 added by Stats. 1991, Ch. 1009, Sec. 1. ) ## 1781.6. (a) An insurer shall not engage the services of any person, firm, association, or corporation to act as a reinsurance intermediary-broker on its behalf unless the person is licensed as required by subdivision (a) of Section 1781.3. (b) An insurer may not employ an individual who is employed by a reinsurance intermediary-broker with which it transacts business unless the reinsurance intermediary-broker is under common control with the insurer and subject to Article 4.7 (commencing with Section 1215) of Chapter 2. (c) The insurer shall annually obtain a copy of statements of the financial condition of each reinsurance intermediary-broker with which it transacts business. (Added by Stats. 1991, Ch. 1009, Sec. 1.)
  196. 1781.7.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.5. Reinsurance Intermediaries [1781.1 - 1781.14] ( Chapter 6.5 added by Stats. 1991, Ch. 1009, Sec. 1. )

    Verify source ↗

    Reinsurance intermediary-managers and reinsurers must use an approved written contract, file it with the commissioner before business is placed, and follow detailed reporting, recordkeeping, fund-handling, and claim-handling rules.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.5. Reinsurance Intermediaries [1781.1 - 1781.14] ( Chapter 6.5 added by Stats. 1991, Ch. 1009, Sec. 1. ) ## 1781.7. Transactions between a reinsurance intermediary-manager and the reinsurer it represents in that capacity shall only be entered into pursuant to a written contract specifying the responsibilities of each party, which shall be approved by the reinsurers’s board of directors. Before a reinsurer assumes or cedes business through such a producer, a true copy of the approved contract shall be filed with the commissioner. The contract shall, at a minimum, contain provisions setting forth the following terms and conditions: (a) The reinsurer may terminate the contract for cause upon written notice to the reinsurance intermediary-manager. The reinsurer may suspend the authority of the reinsurance intermediary-manager to assume or cede business during the pendency of any dispute regarding the cause for termination. (b) The reinsurance intermediary-manager shall, not less than quarterly, render calendar-year-basis and underwriting-year-basis accounts to the reinsurer accurately detailing all material transactions, including information necessary to support all commissions, charges, and other fees received by, or owing to, the reinsurance intermediary-manager, and shall remit all funds due under the contract to the reinsurer on not less than a quarterly basis. (c) All funds collected for the reinsurer’s account shall be held by the reinsurance intermediary-manager in a fiduciary capacity in a bank the accounts of which are insured by an agency or instrumentality of the United States. The reinsurance intermediary-manager may retain no more than three months’ estimated claims payment and allocated loss adjustment expenses. Unless the funds held for each reinsurer by the reinsurance intermediary-manager in the fiduciary account are reasonably and readily ascertainable from its books of account and records, and the bank’s books of account and records, the reinsurance intermediary-manager shall maintain a separate bank account for each reinsurer that it represents. Notwithstanding the foregoing, the reinsurance intermediary-manager shall maintain a separate bank account for each reinsurer that it represents that is in receivership or liquidation or that the commissioner determines to be in an impaired financial condition. (d) For at least 10 years after expiration of each contract of reinsurance transacted by the reinsurance intermediary-manager, the reinsurance intermediary-manager shall keep a complete record for each transaction showing all of the following: (1) The type of contract, limits, underwriting restrictions, classes or risks, and territory. (2) The period of coverage, including effective and expiration dates, cancellation provisions and notice required for cancellation, and disposition of outstanding reserves on covered risks. (3) The reporting and settlement requirements with respect to balances. (4) The rate used to compute the reinsurance premium. (5) The names and addresses of reinsurers. (6) The rates of all reinsurance commissions, including the commissions on any retrocessions handled by the reinsurance intermediary-manager. (7) Related correspondence and memoranda. (8) Proof of placement. (9) Details regarding retrocessions handled by the reinsurance intermediary-manager, as permitted by subdivision (d) of Section 1781.9, including the identity of retrocessionaires and the percentage of each contract assumed or ceded. (10) Financial records, including, but not limited to, premium and loss accounts. (11) If the reinsurance intermediary-manager places a reinsurance contract on behalf of a ceding insurer directly from the assuming reinsurer, written evidence that the assuming reinsurer has agreed to assume the risk. If the reinsurance intermediary-manager procures a reinsurance contract on behalf of an admitted ceding insurer that is placed through a representative of the assuming insurer, other than an employee thereof, written evidence that the reinsurer has delegated binding authority to the representative. (e) The reinsurer shall have access and the right to copy all accounts and records maintained by the reinsurance intermediary-manager related to its business in a form usable by the reinsurer. (f) The contract cannot be assigned in whole or in part by the reinsurance intermediary-manager. (g) The reinsurance intermediary-manager shall comply with the written underwriting and rating standards established by the insurer for the acceptance, rejection, or cession of all risks. (h) The contract shall set forth the rates, terms, and purposes of commissions, charges, and other fees that the reinsurance intermediary-manager may levy against the reinsurer. (i) If the contract permits the reinsurance intermediary-manager to settle claims on behalf of the reinsurer, it shall contain all of the following provisions: (1) All claims shall be reported to the reinsurer in a timely manner. (2) A copy of the claim file shall be sent to the reinsurer at its request or as soon as it becomes known that any of the following applies to the claim: (A) The claim has the potential to exceed the lesser of an amount determined by the commissioner or the limit set by the reinsurer. (B) The claim involves a coverage dispute. (C) The claim may exceed the reinsurance intermediary-manager’s claims settlement authority. (D) The claim is open for more than six months, unless the reinsurer agrees in writing to waive this requirement, in which event the reinsurance intermediary-manager shall annually provide the reinsurer with an exhibit identifying and describing each open claim. (3) All claim files shall be joint property of the reinsurer and the reinsurer intermediary-manager. However, upon an order of liquidation of the reinsurer, these files shall become the sole property of the reinsurer or its estate, except when the reinsurance intermediary-manager is also managing the claim files for other reinsurers. In that event, the reinsurance intermediary-manager shall simultaneously and immediately provide the liquidator with copies of all the claim files. With respect to claim files pertaining solely to a reinsurer in liquidation, the reinsurance intermediary-manager shall have reasonable access to and the right to copy the files on a timely basis. (4) Any settlement authority granted to the reinsurance intermediary-manager may be terminated for cause upon the reinsurer’s written notice to the reinsurance intermediary-manager or upon the termination of the contract. The reinsurer may suspend the settlement authority during the pendency of the dispute regarding the cause of termination. (j) If the contract provides for a sharing of interim profits by the reinsurance intermediary-manager, interim profits shall not be paid until one year after the end of each underwriting period for property business and five years after the end of each underwriting period for casualty business, or a later period set by the commissioner for specified lines of insurance, and not until the adequacy of reserves on remaining claims has been verified pursuant to subdivision (c) of Section 1781.9. (k) The reinsurance intermediary-manager shall annually provide the reinsurer with a statement of its financial condition prepared by an independent certified accountant and annually shall provide the reinsurer with a certification from an independent certified public accountant that the reinsurance intermediary-manager’s allocations of premiums and losses to the reinsurer have been made on a timely and proper basis. (l) The reinsurer shall periodically and at least semiannually conduct an onsite review of the underwriting and claims processing operations of the reinsurance intermediary-manager. (m) The reinsurance intermediary-manager shall disclose to the reinsurer any relationship it has with any insurer prior to ceding or assuming any business with the insurer pursuant to the contract. (n) Within the scope of its actual or apparent authority, the acts of the reinsurance intermediary-manager shall be deemed to be the acts of the reinsurer on whose behalf it is acting. (Amended by Stats. 2006, Ch. 538, Sec. 458. Effective January 1, 2007.)
  197. 1781.8.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.5. Reinsurance Intermediaries [1781.1 - 1781.14] ( Chapter 6.5 added by Stats. 1991, Ch. 1009, Sec. 1. )

    Verify source ↗

    A reinsurance intermediary-manager is barred from several actions, including taking compensation for retrocessions, binding certain retrocessions, and committing the reinsurer without approval.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.5. Reinsurance Intermediaries [1781.1 - 1781.14] ( Chapter 6.5 added by Stats. 1991, Ch. 1009, Sec. 1. ) ## 1781.8. The reinsurance intermediary-manager shall not do any of the following: (a) Directly or indirectly receive any compensation for the placement of retrocessions on behalf of the reinsurer. (b) Bind any retrocession which would increase the contractual limit made available to the reinsurance intermediary-manager by the reinsurer. However, the reinsurance intermediary-manager may bind retrocessions which reduce or limit the commitments made on behalf of the reinsurer by the reinsurance intermediary-manager. The reinsurance intermediary-manager shall promptly inform the reinsurer of the terms, conditions, and retrocessionaires of such a retrocession arranged for its account. (c) Commit the reinsurer to participate in reinsurance syndicates. (d) Appoint any producer without assuring that the producer is lawfully licensed to transact the type of reinsurance for which he or she is appointed. (e) Without prior approval of the reinsurer, pay or commit the reinsurer to pay a claim, net of retrocessions, that exceeds the lesser of an amount specified by the reinsurer or 1 percent of the reinsurer’s policyholders’ surplus as of December 31 of the last complete calendar year. (f) Collect any payment from a retrocessionaire or commit the reinsurer to any claim settlement with a retrocessionaire, without prior approval of the reinsurer. If prior approval is given, a report must be promptly forwarded to the reinsurer. (g) Jointly employ an individual who is employed by the reinsurer, unless the reinsurance intermediary-manager is under common control with the reinsurer that is subject to Article 4.7 (commencing with Section 1215) of Chapter 2. (h) Appoint a subreinsurance intermediary-manager. (Added by Stats. 1991, Ch. 1009, Sec. 1.)
  198. 1781.9.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.5. Reinsurance Intermediaries [1781.1 - 1781.14] ( Chapter 6.5 added by Stats. 1991, Ch. 1009, Sec. 1. )

    Verify source ↗

    A reinsurer may only use a reinsurance intermediary-manager if the person is properly licensed, must get annual financial statements and (when reserves are set) an actuary’s opinion, must give the commissioner written notice of termination within 30 days, and may not appoint certain intermediary-manager insiders to its board.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 6.5. Reinsurance Intermediaries [1781.1 - 1781.14] ( Chapter 6.5 added by Stats. 1991, Ch. 1009, Sec. 1. ) ## 1781.9. (a) A reinsurer shall not engage the services of any person, firm, association, or corporation to act as a reinsurance intermediary-manager on its behalf, unless the person is licensed as required by subdivision (b) of Section 1781.3. (b) A reinsurer shall annually obtain a copy of statements of the financial condition of each reinsurance intermediary-manager which the reinsurer has engaged prepared by an independent certified accountant in a form acceptable to the commissioner. (c) If a reinsurance intermediary-manager establishes loss reserves, the reinsurer shall annually obtain the opinion of an actuary attesting to the adequacy of loss reserves or losses incurred on the business produced by the reinsurance intermediary manager. This opinion shall be in addition to any other required loss reserve certification. For purposes of this section, a reinsurance intermediary-manager shall not be considered as establishing loss reserves when the reinsurance intermediary-manager only utilizes loss reserves which are the reinsurer’s share of loss reserves established by the ceding insurer, provided that the ceding insurer has obtained the opinion of an actuary attesting to the adequacy of loss reserves established for losses incurred and outstanding on business produced by the reinsurance intermediary-manager. (d) Binding authority for participation in reinsurance syndicates shall rest with an officer of the reinsurer who shall not be affiliated with the reinsurance intermediary-manager. (e) Within 30 days of termination of a contract with a reinsurance intermediary-manager, the reinsurer shall provide written notification of the termination to the commissioner. (f) A reinsurer shall not appoint to its board of directors, any officer, director, employee, controlling shareholder, or subproducer of its reinsurance intermediary-manager. This subdivision shall not apply to relationships governed by Article 4.7 (commencing with Section 1215) of Chapter 2. (Added by Stats. 1991, Ch. 1009, Sec. 1.)
  199. 18.

    ## Insurance Code - INS ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1935, Ch. 145. )

    Verify source ↗

    “Signature” or “subscription” can include a mark if the person cannot write, and a mark can count for acknowledgment or a sworn statement only if two witnesses sign.

    ## Insurance Code - INS ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1935, Ch. 145. ) ## 18. “Signature” or “subscription” includes mark when the signer or subscriber can not write, such signer’s or subscriber’s name being written near the mark by a witness who writes his own name near the signer’s or subscriber’s name; but a signature or subscription by mark can be acknowledged or can serve as a signature or subscription to a sworn statement only when two witnesses so sign their own names thereto. (Enacted by Stats. 1935, Ch. 145.)
  200. 1800.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Bail Licenses [1800 - 1823] ( Chapter 7 added by Stats. 1937, Ch. 654. ) ## ARTICLE 1. Qualification and Licensing [1800 - 1823] ( Article 1 added by Stats. 1937, Ch. 654. )

    Verify source ↗

    This section restricts who may handle bail undertakings and bail fugitive recovery activities, requiring licensing and, in some cases, ensuring the hired person is licensed.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 7. Bail Licenses [1800 - 1823] ( Chapter 7 added by Stats. 1937, Ch. 654. ) ## ARTICLE 1. Qualification and Licensing [1800 - 1823] ( Article 1 added by Stats. 1937, Ch. 654. ) ## 1800. (a) An insurer shall not execute an undertaking of bail except by and through a person holding a bail license issued as provided in this chapter. A person shall not in this state solicit or negotiate in respect to execution or delivery of an undertaking of bail or bail bond by an insurer, or execute or deliver such an undertaking of bail or bail bond unless licensed as provided in this chapter, but if so licensed, such person may so solicit, negotiate, and effect such undertakings or bail bonds without holding or being named in any license specified in Chapter 5 of this part. (b) (1) A person shall not perform in this state the activities of a bail fugitive recovery agent, as defined in paragraph (4) of subdivision (a) of Section 1299.01 of the Penal Code, or solicit or negotiate to perform the activities of a bail fugitive recovery agent, as defined in paragraph 4 of subdivision (a) of Section 1299.01 of the Penal Code, unless licensed pursuant to this chapter. (2) Any person, persons, or entity, including licensed bail agents and surety insurers, that hire, contract, solicit, or appoint another person or persons to act as a bail fugitive recovery agent shall ensure that the hired person or persons are duly licensed by the department as a bail fugitive recovery agent under paragraph (4) of subdivision (a) of Section 1801. (c) For purposes of this section, “solicit” shall include any written or printed presentation or advertising made by mail or other publication, or any oral presentation or advertising by means of telephone, radio, or television which implies that an individual is licensed under this chapter, and any activity in arranging for bail which results in remuneration to the individual conducting that activity. (Amended by Stats. 2025, Ch. 558, Sec. 15. (AB 487) Effective January 1, 2026.)

Provision text is displayed from LexChat’s stored statute record. Use the official source links to verify amendments, commencement, and current legal force.

LexChat organizes source-backed legal information for research. Verify amendments, commencement, and current legal force with the official publisher before relying on it.