Amended in Senate April 3, 2014

Senate Bill No. 1205

Introduced by Senator Monning

February 20, 2014

An act to amend Section begin delete 10104 end delete begin insert 1749.1 end insert of the Insurance Code, relating to insurance.

LEGISLATIVE COUNSEL’S DIGEST

SB 1205, as amended, Monning. Insurance.

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Existing law prohibits a person from soliciting, negotiating, or effecting contracts of insurance unless the person holds a valid license from the Insurance Commissioner to act in that capacity. Existing law requires all new applicants for license as one of specified insurance industry professionals, such as a property broker-agent, casualty broker-agent, or limited lines automobile insurance agent, to meet prelicensing education standards, as specified. Existing law requires the Insurance Commissioner to appoint a curriculum board consisting of representatives of insurance agents, brokers, insurance companies, consumer groups, and insurance adjusters, among other persons, to develop the prelicensing and continuing education curriculum. Existing law requires the curriculum board to develop or recommend courses of study covering all lines of insurance to be sold under each license, as specified.

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This bill would require the curriculum board to additionally develop or recommend courses of study on commercial earthquake risk management, as specified.

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Under existing law, policy of residential property insurance may not be issued in the state by an insurer unless the named insured is provided a copy of the California Residential Property Insurance disclosure statement. A policy insuring an individually owned condominium that provides dwelling structure coverage is required to include a copy of that disclosure statement.

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This bill would make a technical, nonsubstantive change to those provisions.

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Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

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begin insert Section 1749.1 of the end insert begin insert Insurance Code end insert begin insert is amended
to read: end insert

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 insurance adjusters to develop
the prelicensing 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. begin insert 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. end insert 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 prelicensing 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.
begin delete No end delete begin insert A end insert prelicensing or continuing education course shall begin insert not end insert 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 prelicensing 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 his or her 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.

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SECTION 1.  

Section 10104 of the Insurance Code is amended
to read:

10104.  

(a) As used in this chapter, “policy of residential
property insurance” shall have the same meaning as defined in
Section 10087, except that it shall not include a tenant’s policy, a
policy covering individually owned mobilehomes and their
contents, a renter’s policy, or a policy insuring individually owned
condominium units, when those policies do not provide dwelling
structure coverage. If a policy insuring an individually owned
condominium does provide dwelling structure coverage, an insurer
shall provide the disclosure required in this chapter.

(b) As used in this chapter, “insurer” shall have the same
meaning as defined in Section 10091.

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