BILL NUMBER: AB 2782	INTRODUCED
	BILL TEXT


INTRODUCED BY   Committee on Insurance (Solorio (Chair), Bradford,
Carter, Feuer, Hayashi, Nava, and Torres)

                        MARCH 3, 2010

   An act to amend Sections 31, 33, 34, 1621, 1623, 1625, 1637, 1639,
1749, 1749.3, 1758.96, 1758.992, 1802.1, 1807.5, 1807.7, 1808,
1810.7, 1811, 14090, 14090.1, 15054, and 15059.1 of, to add Sections
1742.3, 1807.8, and 1807.9 to, and to repeal Section 1673 of, the
Insurance Code, relating to insurance.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2782, as introduced, Committee on Insurance. Insurance omnibus.

   (1) Existing law prohibits insurance agents, insurance brokers,
and insurance solicitors from transacting in life insurance.
   This bill would also prohibit insurance agents, insurance brokers,
and insurance solicitors from transacting in disability insurance,
health insurance, and 24-hour care coverage.
   (2) Existing law provides that a fire and casualty licensee is a
person authorized to act as an insurance agent, broker, or solicitor,
and a fire and casualty broker-agent license is a license to make
those insurance transactions. A fire and casualty licensee is
authorized to transact 24-hour care coverage and any coverage that a
personal lines licensee is authorized to transact.
   This bill would delete the authorization of a fire and casualty
licensee to transact 24-hour care coverage and any coverage that a
personal lines licensee is authorized to transact. This bill would
divide the fire and casualty broker-agent license into 2 insurance
license types: property broker-agent licenses, for insurance coverage
on the direct or consequential loss or damage to property of every
kind, and casualty broker-agent licenses, for insurance coverage
against legal liability, including for death, injury, disability, or
damage to real or personal property.
   (3) Existing law requires a minimum of 40 hours of prelicensing
study as a prerequisite to qualification for a fire and casualty
broker-agent license.
   This bill would require a minimum of 20 hours of prelicensing
study as a prerequisite to qualification for a property broker-agent
license, and a minimum of 20 hours of prelicensing study as a
prerequisite to qualification for a casualty broker-agent license.
   (4) Existing law requires a fire and casualty broker agent to
complete an annual minimum of 25 hours of continuing education for
the first 4 years of his or her licensing, and after 4 years the
licensee is required to complete a minimum of 24 hours of continuing
education prior to license renewal, every 2 years.
   This bill would instead require the property or casualty
broker-agent to complete 24 hours of continuing education prior to
license renewal.
   (5) Existing law authorizes a person licensed as a fire and
casualty broker-agent or a life licensee to transact disability
insurance on behalf of an insurer which is authorized to transact
disability insurance by filing a notice of appointment for that
purpose.
   This bill would delete that provision.
   (6) Existing law authorizes the Insurance Commissioner, where a
licensee has been found by the commissioner to have violated any
provision of the code that would justify the suspension or revocation
of a license held, or where a person is applying for a license and
there exists grounds for the denial of the application by the
commissioner, to after a hearing, revoke the license held or deny the
application for an unrestricted license, and in lieu of an
unrestricted license issue a restricted license.
   This bill would authorize the commissioner, without a hearing, to
issue an order denying an application by a business entity for an
unrestricted license and granting instead a restricted license. The
bill would also authorize this action by the commissioner where a
controlling person of the business entity, as defined, holds a
restricted license. The bill would provide for a means by which the
business entity would be authorized to request reconsideration of the
commissioner's decision. The bill would require that if the
commissioner determines that the business entity should have been
granted an unrestricted license, the unrestricted license would be
required to be granted retroactively.
   (7) Existing law authorizes licensed insurance agents, insurance
brokers, and credit insurance agents to act as credit insurance
agents for an authorized insurer with respect to certain kinds of
insurance sold in connection with and incidental to a loan or other
extension of credit, as specified.
   This bill would include in the definition of credit insurance
guaranteed automobile protection insurance, as defined, and any other
form of insurance declared by the commissioner to be credit
insurance.
   (8) Existing law requires an insurer not to execute an undertaking
of bail except by and through a person holding a bail license issued
by the commissioner. Bail licenses are renewable annually by way of
a notice of intention to keep licenses in force or applications for
renewal of licenses filed on or before June 30th of each year.
   This bill would, commencing January 1, 2011, delete the notice of
intention to keep licenses in force as a renewal method, and make
bail licenses renewable every 2 years, as prescribed.
   (9) Existing law requires that insurance adjusters and public
insurance adjusters be licensed by the commissioner. Adjuster
licenses expire on May 31 of each even-numbered year. Licensees are
required, if not exempt, to complete a minimum of 24 hours of
continuing education, including ethics.
   This bill would change the expiration of those licenses to the day
2 years after the last calendar day of the month in which the
initial license was issued. The bill would require licenses issued
prior to January 1, 2011, to expire on May 31 of each even-numbered
year. The bill also would require that 3 hours of the continuing
education requirement consist of ethics.
   (10) This bill would make conforming and related 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 31 of the Insurance Code is amended to read:
   31.  "Insurance agent" means a person authorized, by and on behalf
of an insurer, to transact all classes of insurance other than life
 , disability, or health  insurance  , on behalf of an
admitted insurance company  . 
   An insurance agent is also authorized to transact 24-hour care
coverage, as defined in Section 1749.02. 
  SEC. 2.  Section 33 of the Insurance Code is amended to read:
   33.  "Insurance broker" means a person who, for compensation and
on behalf of another person, transacts insurance other than life 
, disability, or health  with, but not on behalf of, an
insurer.
  SEC. 3.  Section 34 of the Insurance Code is amended to read:
   34.  "Insurance solicitor" means a natural person employed to aid
a  fire   property  and casualty
broker-agent acting as an insurance agent or insurance broker in
transacting insurance other than life  , disability, or health
 .
  SEC. 4.  Section 1621 of the Insurance Code is amended to read:
   1621.  An insurance agent is a person who transacts insurance,
 including 24-hour care coverage as defined in Section
1749.02,  other than life, disability, or health insurance,
on behalf of an admitted insurance company. The term "insurance agent"
as used in this chapter does not include a life agent as defined in
this article.
  SEC. 5.  Section 1623 of the Insurance Code is amended to read:
   1623.  (a) An insurance broker is a person who, for compensation
and on behalf of another person, transacts insurance other than life
 , disability, or health  insurance with, but not on behalf
of, an admitted insurer. It shall be presumed that the person is
acting as an insurance broker if the person is licensed to act as an
insurance broker, maintains the bond required by this chapter, and
discloses, in a written agreement signed by the consumer, all of the
following:
   (1) That the person is transacting insurance on behalf of the
consumer.
   (2) A description of the basic services the person will perform as
a broker.
   (3) The amount of all broker fees being charged by the person.
   (4) If applicable, the fact that the person may be entitled to
receive compensation from the insurer, directly or indirectly, for
the consumer's purchase of insurance as a consequence of the
transaction.
   (b) If a transaction involves both a retail broker and a wholesale
intermediary broker, the wholesale intermediary broker shall be
deemed to have satisfied its disclosure obligations under this
section if it provides written disclosure to the retail broker of the
criteria set forth in paragraphs (2), (3), and (4) of subdivision
(a).
   (c) The presumption of broker status is rebutted as to any
transaction in the admitted market in which any of the following is
present:
   (1) The licensee is appointed, pursuant to Section 1704, as an
agent of the insurer for the particular class or type of insurance
being transacted.
   (2) The licensee has a written agreement with an insurer
containing express terms that authorize the licensee to obligate the
insurer without first obtaining notification from the insurer that
the insurer has accepted, conditionally or unconditionally, the
submitted risk.
   (3) The licensee is authorized, pursuant to a written agreement
with an insurer, to appoint other licensees as agents of the insurer,
pursuant to Section 1704.
   (4) The licensee is authorized, pursuant to a written agreement
with an insurer, to pay claims on behalf of the insurer.
   (d) In all other cases, the presumption of broker status is
rebutted based on the totality of the circumstances indicating that
the broker-agent is acting on behalf of the insurer.
   (e) For purposes of this section, "totality of the circumstances"
means evidence indicating whether a broker-agent was acting on behalf
of the insurer or was acting on behalf of a third person. In
determining the totality of circumstances, all relevant facts and
circumstances shall be reviewed and the review is not limited to any
particular fact or factors and this section does not require that any
particular circumstance receive greater or lesser weight.
  SEC. 6.  Section 1625 of the Insurance Code is amended to read:
   1625.  (a)    A fire and casualty licensee is a
person authorized to act as an insurance agent, broker, or solicitor,
and a fire and casualty broker-agent license is a license so to act.

   A fire and casualty licensee is also authorized to transact
24-hour care coverage, as defined in Section 1749.02, and any
coverage that a personal lines licensee is authorized to transact
pursuant to Section 1625.5.  
   (b) Licenses to act as a fire and casualty broker-agent under this
chapter shall be of the following types:  
   (1) Property, which shall entitle the licensee to transact
insurance coverage on the direct or consequential loss or damage to
property of every kind.  
   (2) Casualty, which shall entitle the licensee to transact
insurance coverage against legal liability, including that for death,
injury, disability, or damage to real or personal property. 
  SEC. 7.  Section 1637 of the Insurance Code is amended to read:
   1637.  An organization may hold any license or licenses necessary
to act in the following capacities under this chapter and no others:
   (a) A license to act as a life-only agent.
   (b) A license to act as an accident and health agent.
   (c) A license to act as a  fire and casualty 
 property  broker-agent. 
   (d) A license to act as a casualty broker-agent.  
   (d) 
    (e)  A license to act as a cargo shipper's agent.

   (e) 
    (f)  A license to act as a personal lines licensee.

   (f) 
    (g)  A license to act as a credit insurance agent.

   (g) 
    (h)  A license to act as a rental car agent. 
   (h) 
    (i)  A nonresident license to act as a limited lines
licensee pursuant to subdivision (i) of Section 1639. 
   (i) 
    (j)  A license to act as a self-service storage agent.

   (j) 
    (k)  A license to act as a limited lines automobile
insurance agent.
  SEC. 8.  Section 1639 of the Insurance Code is amended to read:
   1639.  The following types of licenses under this chapter may be
issued to nonresidents:
   (a)  A fire and casualty broker-agent if the nonresident
is duly licensed to transact more than one class of insurance, other
than life insurance, disability insurance, title insurance, or life
and disability insurance, under the laws of the state, territory of
the United States, or province of Canada where he or she maintains a
resident license to transact insurance.  A property
broker-agent or a casualty broker-agent if the nonresident is duly
licensed to transact those lines of insurance described in 
Section 1625, under the laws of the state, territory of the United
States, or province of Canada where the resident license is
maintained. 
   (b) A personal lines broker-agent if the nonresident is duly
licensed to transact those lines of insurance described in Section
1625.5, under the laws of the state, territory of the United States,
or province of Canada where the resident license is maintained.
   (c) A life-only agent or an accident and health agent if the
nonresident possesses a resident license in another state, territory
of the United States, or province of Canada to transact life
insurance or disability insurance.
   (d) A nonresident life-only agent may be granted authority to
transact variable contracts if he or she has been granted that
authority by the state where the resident license is maintained.
   (e) A surplus line broker and a special lines surplus broker if
the nonresident holds that type of license in the state or territory
of the United States where the resident license is maintained.
   (f) A credit insurance agent if the nonresident holds that type of
license in the state, territory of the United States, or province of
Canada where the resident license is maintained.
   (g) A rental car agent if the nonresident holds that type of
license in the state, territory of the United States, or province of
Canada where the resident license is maintained.
   (h) A cargo shipper's agent if the nonresident holds that type of
license in the state, territory of the United States, or province of
Canada where the resident license is maintained.
   (i) A limited lines license if the nonresident holds that type of
license in the state, territory of the United States, or province of
Canada where the resident license is maintained. As used in this
section, "limited lines license" means any authority granted by the
resident state that restricts the authority of the license to less
than the total authority granted by any of the types of licenses
identified in this section.
   (j) A self-service storage agent if the nonresident holds that
type of license in the state, territory of the United States, or
Province of Canada where the resident license is maintained.
  SEC. 9.  Section 1673 of the Insurance Code is repealed. 
   1673.  A person licensed as a fire and casualty broker-agent or a
life licensee may be authorized to transact disability insurance on
behalf of any insurer which is authorized to transact disability
insurance by the filing of a notice of appointment for that purpose.
The authority to transact disability insurance given by an insurer to
a person acting as an agent by appointment shall be effective as of
the date the notice of appointment is signed by the insurer. That
authority to transact shall apply to transactions occurring after
that date and for the purpose of determining the insurer's liability
for acts of appointed agents. The commissioner shall prescribe the
forms of the notice of appointment. 
  SEC. 10.  Section 1742.3 is added to the Insurance Code, to read:
   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
commissioner grants 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.
  SEC. 11.  Section 1749 of the Insurance Code is amended to read:
   1749.  The department shall require all new applicants for license
as a  fire and casualty broker-agent   property
broker-agent, casualty broker-agent  , limited lines automobile
insurance agent, personal lines broker-agent, life-only agent, or
accident and health agent to meet prelicensing education standards as
follows:
   (a) Require a minimum of  40   20  hours
of prelicensing study as a prerequisite to qualification for a
 fire and casualty   property  broker-agent
license. The curriculum for satisfying this requirement shall be
approved by the curriculum board and submitted to the commissioner
for final approval. Any additions to the minimum requirements
provided by this section shall be approved by the curriculum board
pursuant to Section 1749.1 and certified by the department. 
   (b) Require a minimum of 20 hours of prelicensing study as a
prerequisite to qualification for a casualty broker-agent license.
The curriculum for satisfying this requirement shall be approved by
the curriculum board and submitted to the commissioner for final
approval. Any additions to the minimum requirements provided by this
section shall be approved by the curriculum board pursuant to Section
1749.1 and certified by the department.  
   (b) 
    (c)  Require a minimum of 20 hours of prelicensing study
as a prerequisite for qualification for a personal lines
broker-agent license. The curriculum for satisfying this requirement
shall be approved by the curriculum board and submitted to the
commissioner for final approval. Any additions to the minimum
requirements provided by this section shall be approved by the
curriculum board pursuant to Section 1749.1 and certified by the
department. 
   (c) 
    (d)  Require a minimum of 20 hours of prelicensing study
as a prerequisite for qualification for a life-only agent license.
The curriculum for satisfying this requirement shall be approved by
the curriculum board and submitted to the commissioner for final
approval. Any additions to the minimum requirements provided by this
section shall be approved by the curriculum board pursuant to Section
1749.1 and certified by the department. 
   (d) 
    (e)  Require a minimum of 20 hours of prelicensing study
as a prerequisite for qualification for a limited lines automobile
insurance agent license. The curriculum for satisfying this
requirement shall be approved by the curriculum board and submitted
to the commissioner for final approval. Any additions to the minimum
requirements under this section shall be approved by the curriculum
board pursuant to Section 1749.1 and certified by the department.

   (e) 
    (f)  Require a minimum of 20 hours of prelicensing study
as a prerequisite for qualification for an accident and health
insurance agent license. The curriculum for satisfying this
requirement shall be approved by the curriculum board and submitted
to the commissioner for final approval. Any additions to the minimum
requirements under this section shall be approved by the curriculum
board pursuant to Section 1749.1 and certified by the department.
This curriculum shall also include instruction in workers'
compensation and general principles of employers' liability. 

   (f) 
    (g)  In addition to the  40 hours of
prelicensing education required to qualify for a license as a fire
and casualty broker-agent, the  20 hours of prelicensing
education required to qualify for a license as a  property
broker-agent,   casualty broker-agent,  personal lines
broker-agent, a life-only agent, or an accident and health agent, or
the 20 hours of prelicensing education required to qualify for a
license as a limited lines automobile insurance agent, the department
shall require 12 hours of study on ethics and this code. Where an
applicant seeks a license for more than one of the following license
types: a fire and casualty broker-agent license, a personal lines
broker-agent license, a life-only license, or an accident and health
license, the applicant shall only be required to complete one 12-hour
course on ethics and this code. The curriculum for satisfying this
requirement shall be approved by the curriculum board and submitted
to the commissioner for final approval. 
   (g) 
    (h)  An applicant for a life-only agent license, an
accident and health license, a personal lines broker-agent license,
or a limited lines automobile insurance agent license, who is
currently licensed as a nonresident in this state shall be required
to complete only the course of study on ethics and  the
Insurance Code   this code  , as required by
 Section 1749   this section  .
Additionally, any applicant for  such a   that
 license holding one or more of the designations specified in
subdivisions (a) to (p), inclusive, of Section 1749.4 shall be
exempted from any requirement for courses in general insurance that
would otherwise be a condition of issuance of the license. 
   (h) 
    (i)  An applicant for a  fire and  
property broker-agent or  casualty broker-agent license who is
currently licensed as a nonresident in this state shall be required
to complete only the course of study on ethics and this code, as
required by subdivision  (f)   (g)  .
Additionally, any applicant for  such  a license
holding one or more of the designations specified in subdivisions (a)
to (p), inclusive, of Section 1749.4, shall be exempted from any
requirement for courses in general insurance that would otherwise be
a condition of issuance of a license. 
   (i) 
    (j)  An applicant for a  fire and  
property broker-agent or  casualty broker-agent license  or
both  who is licensed as a personal lines agent shall complete
a minimum of 20 hours of prelicensing study as a prerequisite 
for each of these licenses  . The curriculum for satisfying this
requirement shall be approved by the curriculum board and submitted
to the commissioner for final approval. The applicant shall not be
required to repeat any prelicensing requirements completed as a
prerequisite to being licensed as a personal lines agent. 
   (j) 
    (k) Review and approval of prelicensing courses not
conducted in a classroom, as referenced in subdivisions (a) to
 (i)   (j)  , inclusive, 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 students' 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. 
   (k) 
    (l)  Prelicensing certificates of completion expire
three years from the completion date of the course, whether or not a
license is issued.
  SEC. 12.  Section 1749.3 of the Insurance Code is amended to read:
   1749.3.   (a)    An individual
licensed as a life-only agent or an accident and health agent and
also licensed as a  fire and casualty   property
or casualty  broker-agent, or an individual only licensed as a
 fire and casualty   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: 
   (b) During each of the first four 12-month periods following the
date of the original license issuance, a minimum of 25 hours.
 
   (c) 
    (a)  Any licensee  who has complied with
subdivision (b) in the first four years, shall thereafter 
 , as specified in subdivision (a), shall  satisfactorily
complete 24 hours of instruction prior to renewal of the license.
These hours of instruction may be completed at any time prior to
renewal of the license. 
   (d) 
    (b)  An individual licensed as a  fire and
  property broker-agent or  casualty broker-agent
and as a life-only agent or an accident and health 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 subdivision (a).

   (e) 
    (c)  A licensee shall not be required to comply with the
requirements of this article if the licensee submits proof
satisfactory to the commissioner that he or she has been a licensee
in good standing for 30 continuous years in this state and is 70
years of age or older. This exemption shall not apply to those
individuals licensed for the first time on or after January 1, 2010.
  SEC. 13.  Section 1758.96 of the Insurance Code is amended to read:

   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 automobile 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. 
  SEC. 14.  Section 1758.992 of the Insurance Code is amended to
read:
   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) "Credit insurance" includes credit life insurance, credit
disability insurance, credit involuntary unemployment insurance,
credit loss-of-income insurance,  or  credit
property insurance  , or guaranteed automobile protection (GAP)
insurance  . 
   (e) "Credit life insurance" and "credit disability insurance" have
the same meanings, and include only those forms of insurance, as
defined in Sections 779.2 and 779.3.  
   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.  
   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 automobile protection" (GAP) insurance means
insurance in which a person agrees to indemnify a vehicle purchaser
or lessee for any of the difference between the actual cash value of
the insured'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
loan, lease agreement, or installment sales contract used to purchase
or lease the vehicle. 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 difference between
the actual cash value and the outstanding debt, 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 promise contained in a conditional sales contract for the
sale of a vehicle by a licensed motor vehicle dealer or a promise
contained in a lease agreement for the lease of a vehicle by a
licensed motor vehicle dealer or leasing company to waive all or a
portion of the difference between the actual cash value of the
insured'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 loan,
lease agreement, or installment sales contract used to purchase or
lease the vehicle. 
   (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 all or a
portion of the difference between the actual cash value of the
insured'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 loan,
lease agreement, or installment sales contract used to purchase or
lease the vehicle.  
   (C) Coverage under subparagraphs (A) and (B) may not include a
promise to pay money to a vehicle purchaser or lessee in addition to
waiving the difference between the actual cash value and the amount
owed. 
  SEC. 15.  Section 1802.1 of the Insurance Code is amended to read:
   1802.1.  Every applicant for a license to act as  a  bail
agent  must   shall  file with the
commissioner a notice of appointment executed by a surety insurer or
its authorized representative authorizing  such 
that  applicant to execute undertakings of bail and to solicit
and negotiate such   those  undertakings on
its behalf. Additional notices of appointment may be filed by other
surety insurers, upon the payment for each additional notice of the
fees specified in subdivision (a) of Section 1811, before 
such   the  license is issued and thereafter, as
long as  such   the  license remains in
force. Each appointment shall, by its terms, continue in force until
 any of the following occur  :
   (a) Termination of the bail agent's license  ; 
 . 
   (b) The end of the license  year   term 
, if the fee provided in subdivision  (d)   (e)
 of Section 1811 for filing  an annual notice of
intention to keep the license in force or  a renewal
application is not paid  ; or  . 
   (c) The filing of a notice of termination by the insurer, its
representative, or by  such   the  bail
agent.
  SEC. 16.  Section 1807.5 of the Insurance Code is amended to read:
   1807.5.   The   Except as provided in
Sections 1669 and 1738, the  commissioner shall not suspend or
revoke any license, issued under this article, without first granting
a hearing, upon reasonable notice to the applicant, except that he
may temporarily suspend  any such   a 
license for a period not exceeding 15 days pending  such
  the  hearing. Where a hearing is held under this
section the proceedings 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, and the commissioner shall have
all the powers granted  therein   pursuant to
that chapter  .
  SEC. 17.  Section 1807.7 of the Insurance Code is amended to read:
   1807.7.  Commencing  with July 1, 1946, all licenses
issued under this article shall be for license periods the length of
which shall be fixed by the commissioner, said length never to exceed
four years. Such licenses may be issued for all of the said periods,
or upon application made during any period for the balance thereof.
If any such license period is fixed at a term in excess of one year,
licenses may be kept in force from year to year until expiration by
the filing, in the form prescribed and provided by the commissioner,
of annual notices of intention to keep licenses in force pursuant to
Section 1808 and by the payment of the fees referred to therein
  on January 1, 2011, all licenses issued pursuant to
this article shall be for a license term of two years  .
  SEC. 18.  Section 1807.8 is added to the Insurance Code, to read:
   1807.8.   "License term" as used in this chapter means all of that
two-year period beginning as described in subdivision (a) or (b) of
Section 1807.9, as applicable, and ending on the day two years after
the last calendar day of the month in which the initial license was
issued. Licenses issued prior to January 1, 2011, shall expire on
June 30th of each odd numbered year.
  SEC. 19.  Section 1807.9 is added to the Insurance Code, to read:
   1807.9.  "License year" as used in this chapter shall be
determined for each individual and entity as follows:
   (a) Upon initial licensing, the license year starts on the date
the license is issued.
   (b) Subsequently, each license year starts the first day of the
month following the month in which the initial license was issued.
   (c) A license year ends the following calendar year on the last
calendar day of the month in which the initial license was issued.
   (d) A license year for licenses issued prior to January 1, 2011,
starts on July 1st and ends on June 30th.
  SEC. 20.  Section 1808 of the Insurance Code is amended to read:
   1808.  (a)  Annual notices of intention to keep licenses
in force or applications for renewal of licenses, as the case may be,
may be filed on or before June 30th of each year  
Applicati   ons for renewal of licenses may be filed on or
before the expiration date  upon payment of the fees for filing
specified in Section 1811.
   (b) Upon failure to file  such notice or  
the  application as provided in subdivision (a), the license
shall expire on  July 1st   the first day of the
next month  , but the holder may file an application for a new
license. Until  June 30th next succeeding  that
same month and day of the next succeeding year  the fee shall be
twice that specified in Section 1811 for  such 
 the  filing.
   (c) No  notice or  application shall be deemed
filed within the meaning of this section unless the document itself
has been actually delivered to, and the proper fee for its filing has
been paid at, the office of the commissioner during office hours, or
unless both  such   the  document and 
the  fee have been filed and remitted pursuant to Sections
11002 and 11003 of the Government Code.
  SEC. 21.  Section 1810.7 of the Insurance Code is amended to read:
   1810.7.  (a) In order to be eligible to take the examination
required to be licensed under this chapter, the applicant shall have
completed not less than 12 hours of classroom education in subjects
pertinent to the duties and responsibilities of a bail licensee,
including, but not limited to, all  related  laws and
regulations  related thereto  , rights of the
accused, ethics, and apprehension of bail fugitives. Additionally, a
licensee shall complete  annually not less than six 
 in each two-year license term not less than 12  hours of
continuing education in these subjects prior to renewal of his or her
license.
   (b) The commissioner shall approve or disapprove an applicant to
provide education for licensure as required by this section within 90
days of receipt of the applicant's full and complete application.
However, this 90-day period shall be tolled during the pendency of
any investigation of the applicant by the commissioner for an alleged
violation that would, if proven, result in the suspension,
revocation, or denial of the provider's approval to provide
continuing education to bail agents as prescribed in Section 1813.
Failure to disapprove an applicant within this period shall result in
the automatic approval of the application. Approval shall be valid
for two years. The commissioner may, at any time, disapprove any
provider who is not qualified or whose course outlines are not
approved, who is not of good business reputation, or who is lacking
in integrity, honesty, or competency. A provider shall not provide
education for licensure following the expiration of the two-year
approval period unless the commissioner has renewed the provider's
approval. The commissioner shall, at the time of renewal, approve or
disapprove the course outlines and schedule of classes to be
provided.
   (c) Providers responsible for providing education for licensure
under this chapter shall consult with the California State Sheriffs'
Association, the California District Attorneys Association, and the
County Counsels Association of California prior to submission of the
course outlines for approval by the commissioner, and these entities
may respond within 30 days of receipt of a request for consultation
from a provider. Providers shall maintain records of their requests
for consultation and any responses from these entities, and make
these records available to the department for review as requested.
The bail license fee shall be increased, the amount of which shall be
determined by the commissioner, which shall be deposited in the
Insurance Fund for the purposes of recovering the administrative
costs for meeting the conditions and purposes of this section.
Providers of education or continuing education shall offer courses to
all applicants at the same course fees.
   (d) Any person who falsely represents to the commissioner that
compliance with this section has been met shall be subject, after
notice and hearing, to the penalties and fines set out in Section
1814.
   (e) A licensee shall not be required to comply with the continuing
education requirements of this section if the licensee submits proof
satisfactory to the commissioner that he or she has been a licensee
in good standing for 30 continuous years in this state and is 70
years of age or older.
   (f) The commissioner may make reasonable rules and regulations
necessary, advisable, and convenient for the administration and
enforcement of this chapter. The rules and regulations may include a
schedule establishing fees to be paid by an applicant seeking
approval to act as a provider and to deliver courses under this
section. Those fees shall be in an amount no greater than fees paid
by applicants providing similar courses to other insurance agents
licensed by the department, as specified in Section 1751.1.
   (g) Nothing in this chapter shall preclude completion of the bail
agent continuing education requirements of this section through a
course of instruction offered via the Internet or correspondence.
However, this subdivision shall not be construed to allow completion
of the prelicensing education requirements of this section through
 such  a course of instruction.
   (h) Successful completion of the continuing education requirements
by means of an Internet or correspondence course shall require
obtaining a passing grade of at least 70 percent on a written final
examination. The final examination shall be open book and shall be
graded by the approved provider. The provider shall issue
certificates of completion only to those students who have passed the
final examination. 
   (i) No Internet or correspondence continuing education course
shall be provided pursuant to this section prior to April 1, 2006.
However, this subdivision shall not prohibit an approved provider
from advertising or promoting a course prior to that date. 
  SEC. 22.  Section 1811 of the Insurance Code is amended to read:
   1811.  For his services in connection with the filing of any
application or request for any license under this chapter, the
commissioner shall charge and collect the following fees:
   (a) For filing an application or request for bail agent's license,
one hundred eighteen dollars ($118)  per year  .
   (b) For filing an application or request for bail solicitor's
license, one hundred eighteen dollars ($118)  per year  .
   (c) For filing an application or request for bail permittee's
license, two hundred thirty-six dollars ($236).
   (d) For filing an application for examination, or reexamination
 ,  twenty-four dollars ($24).
   (e) For  filing each annual notice of intention to keep a
bail agent's license in force or  a renewal application, a
fee of thirty-five dollars ($35)  per year  . In the case of
a bail agent with more than one valid notice of appointment on file,
the fee to be charged pursuant to this  subsection 
 subdivi   sion  shall be the fee provided herein
multiplied by the number of insurers whose valid appointments are on
file at the date such   the  document is
filed unless  such   the  bail agent in
 such   that  document advises the
commissioner of his intent to terminate the appointment of one or
more  such   of those  insurers, in which
event the fee shall be based upon the number for insurers remaining.
   (f) For  filing each renewal notice of intention to keep
 a bail solicitor's  license in force or a 
renewal application, a fee of thirty-five dollars ($35)  per
year  .
   (g) For  filing each renewal notice of intention to keep
 a bail permittee's  license in force or a 
renewal application, a fee of one hundred forty-eight dollars ($148)
 per year  .
   (h) At the time of filing an application for a license, if a
qualifying examination is required for issue or in connection with
 such   the  license, the fee for filing
the first application to take the qualifying examination shall be
paid at the time of filing application for the license.
   (i) For filing application or request for approval of a true or
fictitious name pursuant to Section 1724.5, twelve dollars ($12),
except that there shall be no fee when  such  
the  name is contained in an original application.
   (j) For filing a bond required by this chapter, except when
 such   the  bond constitutes part of an
original application, ten dollars ($10).
   (k) For filing a first amendment to an application, six dollars
($6).
   (  l ) For filing a second and each subsequent amendment
to an application, twelve dollars ($12).
  SEC. 23.  Section 14090 of the Insurance Code is amended to read:
   14090.  Every license, branch office certificate, and pocket card
issued  under   pursuant to  this chapter
shall expire on  May 31 of each even-numbered year 
 the day two years after the last calendar day of the month in
which the initial license was issued. Licenses issued prior to
January 1, 2011, shall expire on May 31 of each even-numbered year
 . To renew an unexpired license or certificate, the licensee
shall, on or before the date on which it would otherwise expire,
apply for renewal on a form prescribed by the commissioner, and pay
the renewal fee prescribed by this chapter. On renewal,  such
  the  evidence of renewal of the license or
certificate as the commissioner may prescribe, and renewal pocket
cards for the persons mentioned in Section 14034, shall be issued to
the licensee.
  SEC. 24.  Section 14090.1 of the Insurance Code is amended to read:

   14090.1.  (a) An individual who holds an insurance adjuster
license and who is not exempt under subdivision (b) of this section
shall satisfactorily complete a minimum of 24 hours, 
including   of which three hours are to be in 
ethics, of continuing education courses pertinent to the duties and
responsibilities of an insurance adjuster license reported to the
insurance commissioner on a biennial basis in conjunction with his or
her license renewal cycle.
   (b) This section does not apply to either of the following:
   (1) A licensee not licensed for one full year prior to the end of
the applicable continuing education biennium.
   (2) A licensee holding a nonresident insurance adjuster license
who has met the continuing education requirements of his or her
designated resident state.
  SEC. 25.  Section 15054 of the Insurance Code is amended to read:
   15054.  Every license, branch office certificate, and pocket card
issued  under   pursuant to  this chapter
shall expire  on May 31 of each even-numbered year 
 on the day two years after the last calendar day of the month in
which the initial license was issued. Licenses issued prior to
January 1, 2011, shall expire on May 31 of each even-numbered year
 . To renew an unexpired license or certificate, the licensee
shall, on or before the date on which it would otherwise expire,
apply for renewal on a form prescribed by the commissioner, and pay
the renewal fee prescribed by this chapter. On renewal,  such
  the  evidence of renewal of the license or
certificate as the commissioner may prescribe, and renewal pocket
cards for the persons mentioned in Section 15022 shall be issued to
the licensee.
  SEC. 26.  Section 15059.1 of the Insurance Code is amended to read:

   15059.1.  (a) An individual who holds a public insurance adjuster
license and who is not exempt under subdivision (b) shall
satisfactorily complete a minimum of 24 hours,  including
  of which three hours are to be in  ethics, of
continuing education courses pertinent to the duties and
responsibilities of a public insurance adjuster license, to be
reported to the insurance commissioner on a biennial basis in
conjunction with his or her license renewal cycle.
   (b) This section shall not apply to:
   (1) A licensee not licensed for one full year prior to the end of
the applicable continuing education biennium.
   (2) A licensee holding a nonresident public insurance adjuster
license who has met the continuing education requirements of his or
her designated state or residence.