BILL NUMBER: AB 2717	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JULY 15, 2010
	AMENDED IN SENATE  JUNE 3, 2010
	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.


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) 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.
   (B) Before or after approval, 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  it is established to the satisfaction of the
commissioner that  the agency is  clearly and
convincingly  qualified to accredit an organization or
designation involved with financial services provided to seniors.
   (3) The organization requires California candidates for the
designation to 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.  No part of the examinations, textbooks, or other study
materials may concern techniques on how to increase the amount of
insurance or financial products one sells, nor recommend the selling
of products offered by specific companies. 
   (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 by 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
governmental entity, or of an organization with a contract with that
governmental 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's 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.