BILL NUMBER: AB 2717 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 26, 2010
AMENDED IN ASSEMBLY APRIL 7, 2010
INTRODUCED BY Assembly Member Skinner
FEBRUARY 19, 2010
An act to amend Section 787.1 of the Insurance Code, relating to
insurance.
LEGISLATIVE COUNSEL'S DIGEST
AB 2717, as amended, Skinner. Insurance: agents and brokers:
senior designation: use.
Existing law provides that a broker or agent may not use a senior
designation unless he or she has met certain conditions, including,
but not limited to, that the broker or agent has been granted the
right and is currently authorized to use the senior designation by
the organization that issues the designation, and the senior
designation has been approved by the Insurance Commissioner for use
by brokers and agents in the sale of insurance to seniors, as
provided.
This bill would require that the commissioner approve a senior
designation only if the organization that issues the designation
satisfies specified requirements, including, but not limited to,
accreditation standards, education and examination requirements, and
having minimum standards and procedures regarding disciplining the
organization's designees for improper or unethical conduct.
The bill would authorize the commissioner to rescind approval of a
designation, under specified circumstances, after notice and a
hearing conducted by an administrative law judge, pursuant to the
administrative adjudication formal hearing provisions of the
Administrative Procedure Act.
This bill would also make conforming changes and delete obsolete
provisions.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
AB 2717, as amended, Skinner. Insurance: agents and brokers:
senior designation: use.
Existing law provides that a broker or agent may not use a senior
designation unless he or she has met certain conditions, including,
but not limited to, that the broker or agent has been granted the
right and is currently authorized to use the senior designation by
the organization that issues the designation, and the senior
designation has been approved by the Insurance Commissioner for use
by brokers and agents in the sale of insurance to seniors, as
provided.
This bill would require that the commissioner approve a senior
designation only if the organization that issues the designation
satisfies specified requirements, including, but not limited to,
accreditation standards, education and examination requirements, and
having minimum standards and procedures regarding disciplining the
organization's designees for improper or unethical conduct.
The bill would authorize the commissioner to rescind approval of a
designation, under specified circumstances, after notice and a
hearing conducted by an administrative law judge, pursuant to the
administrative adjudication formal hearing provisions of the
Administrative Procedure Act.
This bill would also make conforming changes and delete obsolete
provisions.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 787.1 of the Insurance Code is amended to read:
787.1. (a) The following definitions apply to this section:
(1) "Senior designation" means any degree, title, credential,
certificate, certification, accreditation, or approval, that
expresses or implies that a broker or agent possesses expertise,
training, competence, honesty, or reliability with regard to advising
seniors in particular on finance, insurance, or risk management.
(2) "Use" means utilizing a word, phrase, acronym, or logo, in any
oral or written communication from which a sale of insurance to a
senior may directly or indirectly result, that states or suggests,
alone or in context, that a broker or agent holds a senior
designation.
(b) (1) A broker or agent may not use a senior designation unless
all of the following conditions have been met:
(A) The broker or agent has been granted the right to use the
senior designation by the organization that issues the senior
designation, and the broker or agent is currently authorized by the
organization to use the designation.
(B) The senior designation has been approved by the commissioner
for use by brokers and agents in the sale of insurance to seniors.
(C) The broker or agent has been licensed for at least four years
in any state or United States territory to sell the types of
insurance with which the designation is used.
(2) A broker or agent may not use a senior designation in a manner
that misleads a person as to the significance of the senior
designation. Each time a broker or agent uses a senior designation in
a writing, the writing shall also contain the words "California" or
"CA" next to "Insurance Agent" or "Insurance Broker Agent" and
"License," and these words shall be located immediately prior to the
broker's license number or the agent's license number, in type that
is in the same font and at least the same size as the type used for
the senior designation. The requirements set forth in this
subdivision are in addition to the requirements of Section 1725.5 and
shall apply regardless of whether the broker or agent is an
insurance agent, as defined in Section 1621. For purposes of this
paragraph, "writing" means business cards, written price quotations,
and print advertisements distributed exclusively in this state.
(c) The commissioner shall approve a senior designation only if
the organization that issues the designation satisfies all of the
following requirements with respect to the designation:
(1) The organization has applied for approval on a form prescribed
by the commissioner.
(A) A designation shall not be approved if an incomplete
application form is submitted to the department. The incomplete
application shall remain on file for one year unless withdrawn by the
applicant. After one year, a new application is required. The
department shall notify the applicant when the application and all
required supporting documents have been received; however,
notification that an application is complete does not mean approval
has been or will be granted. The department shall decide whether to
approve a designation within 90 days of receiving a completed
application and all required supporting documents and additional
information. If the department initiates an investigation of an
applicant on suspicion that grounds exist to deny the application,
the 90-day period shall be tolled until the completion of the
investigation. If, after the completion of the investigation, the
applicant is referred to the department's legal division, the
department shall have an additional 45 days from the date of the
referral to issue a statement of issues pursuant to Section 11504 of
the Government Code, or to issue the approval.
(B) The department may require the filing of any supplementary
documents and declarations it deems necessary to determine whether
the prerequisites for approval have been met.
(C) An organization shall notify the department in writing within
45 days following any material change in information recorded on the
application form or in declarations or documents submitted along with
it or in response to a department request.
(2) The designation is accredited by the National Commission for
Certifying Agencies, or the organization or the designation is
accredited by an agency that is on the United States Department of
Education's list entitled "Accrediting Agencies Recognized for Title
IV Purposes" and the agency is clearly and convincingly qualified to
accredit an organization or designation involved with financial
services provided to seniors.
(3) (A) The organization requires California candidates for the
designation to pass demonstrate superior expertise in advising
seniors in particular in finance, insurance, or risk management by
passing examinations that are based on applicants with no prior
insurance education or experience completing at least 75 hours of
study covering at least the following topics: aspects of aging,
health care coverage, long-term care insurance, financial planning
for retirement, investments, estate planning, and ethics. Textbooks
or other study materials may use chapter and subchapter titles that
differ from those general topics as long as the essential content is
the same.
(B) A designation may be approved without the organization that
issues it establishing compliance with subparagraph (A) if, in the
opinion of the commissioner, the organization has proven clearly and
convincingly both of the following:
(i) Its examinations ensure that its designees generally possess
superior expertise in advising seniors in particular in finance,
insurance, or risk management comparable to a designee who has
completed a course of study pursuant to subparagraph (A).
(ii) Study material typically used to prepare for the examinations
cover most of the topics recited in subparagraph (A).
(d) (1) In determining whether to approve a senior designation for
use in the sale of insurance to seniors, the commissioner shall also
ensure that the organization that issues the senior designation
fulfills the following:
(A) Is exclusively an educational or certification organization,
and is not directly or indirectly, through an affiliate or partner,
involved in selling insurance, nor receives any compensation directly
or indirectly from any sale of insurance , other than the
receipt of charitable gifts to a nonprofit institution .
(B) Maintains standards and procedures for disciplining its
designees for improper or unethical conduct, as established by proven
complaints or by disciplinary action by a government licensing
agency or a quasi-governmental licensing and regulatory organization.
The standards and procedures shall include, at a minimum:
(i) A written procedure to receive, log, and conduct a preliminary
review of complaints alleging improper, illegal, or unethical
conduct.
(ii) Written standards for determining when a complaint warrants
further investigation into the merits of the allegations contained
therein.
(iii) Written standards and procedures to ensure that, once a
complaint is determined to warrant further investigation, the
investigation is diligently conducted.
(iv) Written standards for determining when to file disciplinary
charges based on the results of an investigation.
(v) Written standards and procedures to ensure due process in the
adjudication of disciplinary charges by adjudicators who are fair,
knowledgeable, and otherwise qualified.
(vi) Written standards and procedures for the imposition of
appropriate sanctions, including, when warranted, revocation of the
designation.
(C) Maintains a code of ethics for its California designees
consistent with that of one of the designations recited in Section
1749.4.
(e) (1) A word, phrase, acronym, or logo shall be deemed a senior
designation if it contains the word "senior," "Medicare," "Medi-Cal,"
"retire," "mature," "gerontology," or "elder," or any
variation or synonym of one of these words within several words of
the word "certified," "chartered," "registered," "adviser,"
"specialist," "consultant," "agent," "broker," "insurance," "planner,"
"professional," "enrolled," "accredited," "analyst," or "fellow," or
any variation or synonym of one of these words. A word, phrase,
acronym, or logo may constitute a senior designation if it meets the
definition in paragraph (1) of subdivision (a) regardless of whether
it contains one of the words recited in this subdivision.
(2) A word, phrase, acronym, or logo shall not constitute a senior
designation if it is a job title or description of an employee of a
government entity, or of an organization with a contract with that
government entity to provide free counseling to seniors.
(3) No exemption exists under this section for use of a senior
designation that constitutes a job title or description or part of a
job title or description, except as provided in paragraph (2).
(4) An advanced academic degree, such as a Ph.D., M.B.A., or M.S.,
may be used without compliance with subdivision (d), if the degree
was awarded by an institution of higher education that has been
accredited by an organization that is on the United States Department
of Education's list entitled "Accrediting Agencies Recognized for
Title IV Purposes."
(f) A violation of subdivision (b) by a broker or agent shall be
grounds for suspension or revocation of the broker or agent's license
pursuant to Sections 1668 and 1738. Such a violation also shall be
grounds for a cease and desist order and monetary penalty pursuant to
Section 12921.8, as if the broker or agent had acted in a capacity
for which a license was required but not possessed.
(g) Any person who grants to a California resident the right to
use a senior designation that has not been approved by the
commissioner, without reasonably attempting to determine whether
California is one of the designee's residences, shall be subject to a
cease and desist order and monetary penalty pursuant to Section
12921.8, as if the person had acted in a capacity for which a license
was required but not possessed.
(h) The disciplinary and remedial authority recited in this
subdivision shall be in addition to any other disciplinary and
remedial authority included in this code.
(i) Notwithstanding any other provision of this code, the criteria
in Sections 1668 and 1668.5 apply to an organization that issues a
senior designation, and the commissioner may deny or rescind approval
of an organization issuing a senior designation based on that
criteria.
(j) The commissioner shall maintain a list of senior designations
approved pursuant to subdivisions (c), (d), and (e) and shall publish
the current list on the Internet Web site of the Department of
Insurance.
(k) This section shall apply to all types of insurance, including
those listed in paragraphs (1) and (2) of subdivision (c) of Section
785, except those listed in paragraphs (3) to (7), inclusive, and
paragraph (9) of subdivision (c) of Section 785 and subdivision (d)
of Section 785.
(l) The commissioner may, upon receipt of a petition from an
organization, issue written confirmation that a designation issued by
that organization is exempt from the requirement of approval
pursuant to this section. The commissioner may issue confirmation if
the designation, according to its title or curriculum, or in its
actual use, concerns almost exclusively subject matters other than
insurance or financial services sold to seniors in particular.
(m) (1) The commissioner may rescind approval of a designation
whenever there has been a material change in the management or
operation of the organization that issues the designation, or in the
procedures or criteria for issuance of the designation, such that if
the organization were to apply for approval of the designation
subsequent to the change, approval would be denied.
(2) Any rescission of the approval of a designation shall be after
notice and 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, as if the approval were a license, and the
commissioner shall have all of the powers granted therein.
SECTION 1. Section 787.1 of the Insurance Code is amended to read:
787.1. (a) The following definitions apply to this section:
(1) "Senior designation" means any degree, title, credential,
certificate, certification, accreditation, or approval, that
expresses or implies that a broker or agent possesses expertise,
training, competence, honesty, or reliability with regard to advising
seniors in particular on finance, insurance, or risk management.
(2) "Use" means utilizing a word, phrase, acronym, or logo, in any
oral or written communication from which a sale of insurance to a
senior may directly or indirectly result, that states or suggests,
alone or in context, that a broker or agent holds a senior
designation.
(b) (1) A broker or agent may not use a senior designation unless
all of the following conditions have been met:
(A) The broker or agent has been granted the right to use the
senior designation by the organization that issues the senior
designation, and the broker or agent is currently authorized by the
organization to use the designation.
(B) The senior designation has been approved by the commissioner
for use by brokers and agents in the sale of insurance to seniors.
(C) The broker or agent has been licensed for at least four years
in any state or United States territory to sell the types of
insurance with which the designation is used.
(2) A broker or agent may not use a senior designation in a manner
that misleads a person as to the significance of the senior
designation. Each time a broker or agent uses a senior designation in
a writing, the writing shall also contain the words "California" or
"CA" next to "Insurance Agent" or "Insurance Broker Agent" and
"License," and these words shall be located immediately prior to the
broker's license number or the agent's license number, in type that
is in the same font and at least the same size as the type used for
the senior designation. The requirements set forth in this
subdivision are in addition to the requirements of Section 1725.5 and
shall apply regardless of whether the broker or agent is an
insurance agent, as defined in Section 1621. For purposes of this
paragraph, "writing" means business cards, written price quotations,
and print advertisements distributed exclusively in this state.
(c) The commissioner shall approve a senior designation only if
the organization that issues the designation satisfies all of the
following requirements with respect to the designation:
(1) The organization has applied for approval on a form prescribed
by the commissioner.
(A) A designation shall not be approved if an incomplete
application form is submitted to the department. The incomplete
application shall remain on file for one year unless withdrawn by the
applicant. After one year, a new application is required. The
department shall notify the applicant when the application and all
required supporting documents have been received; however,
notification that an application is complete does not mean approval
has been or will be granted. The department shall decide whether to
approve a designation within 90 days of receiving a completed
application and all required supporting documents and additional
information. If the department initiates an investigation of an
applicant on suspicion that grounds exist to deny the application,
the 90-day period shall be tolled until the completion of the
investigation. If, after the completion of the investigation, the
applicant is referred to the department's legal division, the
department shall have an additional 45 days from the date of the
referral to issue a statement of issues pursuant to Section 11504 of
the Government Code, or to issue the approval.
(B) The department may require the filing of any supplementary
documents and declarations it deems necessary to determine whether
the prerequisites for approval have been met.
(C) An organization shall notify the department in writing within
45 days following any material change in information recorded on the
application form or in declarations or documents submitted along with
it or in response to a department request.
(2) The designation is accredited by the National Commission for
Certifying Agencies, or the organization or the designation is
accredited by an agency that is on the United States Department of
Education's list entitled "Accrediting Agencies Recognized for Title
IV Purposes" and the agency is clearly and convincingly qualified to
accredit an organization or designation involved with financial
services provided to seniors.
(3) (A) The organization requires California candidates for the
designation to pass demonstr ate
superior expertise in advising seniors in particular in finance,
insurance, or risk management by passing examinations that are
based on applicants with no prior insurance education or experience
completing at least 75 hours of study covering at least the following
topics: aspects of aging, health care coverage, long-term care
insurance, financial planning for retirement, investments, estate
planning, and ethics. Textbooks or other study materials may use
chapter and subchapter titles that differ from those general topics
as long as the essential content is the same.
(B) A designation may be approved without the organization that
issues it establishing compliance with subparagraph (A) if, in the
opinion of the commissioner, the organization has proven clearly and
convincingly both of the following:
(i) Its examinations ensure that its designees generally possess
superior expertise in advising seniors in particular in finance,
insurance, or risk management comparable to a designee who has
completed a course of study pursuant to subparagraph (A).
(ii) Study material typically used to prepare for the examinations
cover most of the topics recited in subparagraph (A).
(d) (1) In determining whether to approve a senior designation for
use in the sale of insurance to seniors, the commissioner shall also
ensure that the organization that issues the senior designation
fulfills the following:
(A) Is exclusively an educational or certification organization,
and is not directly or indirectly, through an affiliate or partner,
involved in selling insurance, nor receives any compensation directly
or indirectly from any sale of insurance , other than the
receipt of charitable gifts to a nonprofit institution .
(B) Maintains standards and procedures for disciplining its
designees for improper or unethical conduct, as established by proven
complaints or by disciplinary action by a government licensing
agency or a quasi-governmental licensing and regulatory organization.
The standards and procedures shall include, at a minimum:
(i) A written procedure to receive, log, and conduct a preliminary
review of complaints alleging improper, illegal, or unethical
conduct.
(ii) Written standards for determining when a complaint warrants
further investigation into the merits of the allegations contained
therein.
(iii) Written standards and procedures to ensure that, once a
complaint is determined to warrant further investigation, the
investigation is diligently conducted.
(iv) Written standards for determining when to file disciplinary
charges based on the results of an investigation.
(v) Written standards and procedures to ensure due process in the
adjudication of disciplinary charges by adjudicators who are fair,
knowledgeable, and otherwise qualified.
(vi) Written standards and procedures for the imposition of
appropriate sanctions, including, when warranted, revocation of the
designation.
(C) Maintains a code of ethics for its California designees
consistent with that of one of the designations recited in Section
1749.4.
(e) (1) A word, phrase, acronym, or logo shall be deemed a senior
designation if it contains the word "senior," "Medicare," "Medi-Cal,"
"retire," "mature," "gerontology," or "elder," or any
variation or synonym of one of these words within several words of
the word "certified," "chartered," "registered," "adviser,"
"specialist," "consultant," "agent," "broker," "insurance," "planner,"
"professional," "enrolled," "accredited," "analyst," or "fellow," or
any variation or synonym of one of these words. A word, phrase,
acronym, or logo may constitute a senior designation if it meets the
definition in paragraph (1) of subdivision (a) regardless of whether
it contains one of the words recited in this subdivision.
(2) A word, phrase, acronym, or logo shall not constitute a senior
designation if it is a job title or description of an employee of a
government entity, or of an organization with a contract with that
government entity to provide free counseling to seniors.
(3) No exemption exists under this section for use of a senior
designation that constitutes a job title or description or part of a
job title or description, except as provided in paragraph (2).
(4) An advanced academic degree, such as a Ph.D., M.B.A., or M.S.,
may be used without compliance with subdivision (d), if the degree
was awarded by an institution of higher education that has been
accredited by an organization that is on the United States Department
of Education's list entitled "Accrediting Agencies Recognized for
Title IV Purposes."
(f) A violation of subdivision (b) by a broker or agent shall be
grounds for suspension or revocation of the broker or agent's license
pursuant to Sections 1668 and 1738. Such a violation also shall be
grounds for a cease and desist order and monetary penalty pursuant to
Section 12921.8, as if the broker or agent had acted in a capacity
for which a license was required but not possessed.
(g) Any person who grants to a California resident the right to
use a senior designation that has not been approved by the
commissioner, without reasonably attempting to determine whether
California is one of the designee's residences, shall be subject to a
cease and desist order and monetary penalty pursuant to Section
12921.8, as if the person had acted in a capacity for which a license
was required but not possessed.
(h) The disciplinary and remedial authority recited in this
subdivision shall be in addition to any other disciplinary and
remedial authority included in this code.
(i) Notwithstanding any other provision of this code, the criteria
in Sections 1668 and 1668.5 apply to an organization that issues a
senior designation, and the commissioner may deny or rescind approval
of an organization issuing a senior designation based on that
criteria.
(j) The commissioner shall maintain a list of senior designations
approved pursuant to subdivisions (c), (d), and (e) and shall publish
the current list on the Internet Web site of the Department of
Insurance.
(k) This section shall apply to all types of insurance, including
those listed in paragraphs (1) and (2) of subdivision (c) of Section
785, except those listed in paragraphs (3) to (7), inclusive, and
paragraph (9) of subdivision (c) of Section 785 and subdivision (d)
of Section 785.
(l) The commissioner may, upon receipt of a petition from an
organization, issue written confirmation that a designation issued by
that organization is exempt from the requirement of approval
pursuant to this section. The commissioner may issue confirmation if
the designation, according to its title or curriculum, or in its
actual use, concerns almost exclusively subject matters other than
insurance or financial services sold to seniors in particular.
(m) (1) The commissioner may rescind approval of a designation
whenever there has been a material change in the management or
operation of the organization that issues the designation, or in the
procedures or criteria for issuance of the designation, such that if
the organization were to apply for approval of the designation
subsequent to the change, approval would be denied.
(2) Any rescission of the approval of a designation shall be after
notice and 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, as if the approval were a license, and the
commissioner shall have all of the powers granted therein.
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