Amended in Senate January 4, 2016

Senate Bill No. 488

Introduced by Senator Block

February 26, 2015

An act to amend Sections 1722, 1751.5, begin delete 14000, 14001, 14020, 14022, 14022.5, 14024, 14025, 14028, 14031, 14032, 14038, 14039, 14040, 14042, 14061, 14063, 14064, 14080, 14090.1, 14097, 14099, end delete 15001, 15008, 15010, 15011, 15013, 15017, 15020, 15027, 15027.1, begin insert 15028, end insert 15031, 15036, 15053, 15056, 15060, and 15062 of, to add begin delete Sections 14025.1, 14079, and end delete begin insert Section end insert 15009.1 to, to repeal begin delete Sections 14027, 14030, 14037, and end delete begin insert Section end insert 15015 of, and to repeal and add Sections begin delete 14010, 14021, 14026, 14029, 14078, 15007, end delete begin insert 15007 end insert and 15016 of, the Insurance Code, relating to insurance.

LEGISLATIVE COUNSEL’S DIGEST

SB 488, as amended, Block. begin delete Independent insurance adjusters: public end delete begin insert Public end insert insurance adjusters.

begin delete

(1) Existing law, the Insurance Adjuster Act, sets forth various requirements with respect to operation as an insurance adjuster in this state, including, but not limited to, that the person be licensed, licensing qualifications and application requirements, codes of conduct, disciplinary actions, and nonresident and emergency licenses. The act defines the term, “insurance adjuster,” to include a person, other than a private investigator, who, for any consideration whatsoever, engages in business or accepts employment to furnish, or agrees to make, or makes, any investigation for the purpose of obtaining, information in the course of adjusting or otherwise participating in the disposal of, any claim under or in connection with a policy of insurance on behalf of an insurer or engages in soliciting insurance adjustment business. Any person who knowingly falsifies the fingerprints or photographs submitted as part of the application process is guilty of a felony, and any person who violates any other provision governing insurance adjusters is guilty of a misdemeanor punishable by a fine not to exceed $500, or by imprisonment in the county jail not to exceed one year, or by both that fine and imprisonment.

end delete begin delete

This bill would revise and recast the above provisions by, among other things, changing the name of the act to the Independent Insurance Adjuster Act and redefining an “independent insurance adjuster” to mean an individual, a business entity, an independent contractor, or an employee of a contractor, who contracts for compensation with insurers or self-insurers, a person whose tax treatment by the insurers or self-insurers is consistent with that of an independent contractor rather than as an employee, and a person that investigates, negotiates, or settles property, casualty, or workers’ compensation claims for insurers or for self-insurers. The bill would expand the categories of persons exempt from the act to include, among others, an individual who is employed to investigate suspected fraudulent insurance claims but who does not adjust losses or determine claims payments, and a person who solely performs executive, administrative, managerial, or clerical duties or any combination thereof, and who does not investigate, negotiate, or settle claims with policyholders, claimants, or their legal representative. The bill would impose additional information and educational requirements on applicants and would impose additional code of conduct requirements on licensees. The bill would revise the provisions relating to nonresident and emergency licenses with regards to qualifying for those licenses. The bill would also create an apprentice independent insurance adjuster license to facilitate the experience, education, and training necessary to ensure reasonable competency in the responsibilities and duties of an independent insurance adjuster and would set forth the various terms and conditions of the license, including an application fee to be fixed by the commissioner and reasonably related to the actual cost to the department in performing its duties. The bill would make an apprentice independent insurance adjuster subject to a felony conviction if he or she knowingly falsifies the fingerprints or photograph submitted as part of his or her application for a license. The bill would also make conforming changes. Because the bill would create a new crime, it would impose a state-mandated local program.

end delete begin delete

(2) Existing

end delete

begin insert Existing end insert law, the Public Insurance Adjusters Act, sets forth various requirements with respect to operation as a public insurance adjuster in this state, including, but not limited to, that the person be licensed and licensing qualifications and application requirements for public insurance adjusters, nonresident public insurance adjusters, and interim public insurance adjusters. The act defines the term “public insurance adjuster” to mean a person who, for compensation, acts on behalf of, or aids in any manner, an insured in negotiating for or effecting the settlement of a claim or claims for loss or damage under any policy of insurance covering real or personal property or any person who advertises, solicits business, or holds himself or herself out to the public as an adjuster of those claims and any person who, for compensation, investigates, settles, adjusts, advises, or assists an insured with reference to claims for those losses on behalf of any public insurance adjuster. Any person who knowingly falsifies the fingerprints or photographs submitted as part of the application process is guilty of a felony, and any person who violates any other provision governing public insurance adjusters is guilty of a misdemeanor punishable by a fine not to exceed $500 or by imprisonment in begin delete the end delete begin insert a end insert county jail not to exceed one year, or by both that fine and imprisonment.

This bill would revise and recast the above provisions by, among other things, redefining a “public insurance adjuster” to include any person who, for compensation or any other thing of value on behalf of an insured, acts or aids, solely in relation to first party claims arising under insurance contracts that insure the real or personal property of the insured, on behalf of an insured in negotiating for, or effecting the settlement of, a claim for loss or damage coverage by an insurance contract, or advertises for employment as a public adjuster of insurance claims or solicits business or represents himself or herself to the public as a public adjuster of first party insurance claims for losses or damages arising out of policies of insurance that insure real or personal property. The bill would expand the categories of persons exempt from the act to include, among others, a person who negotiates or settles claims arising under a life or health insurance policy or an annuity contract and a person who settles subrogation claims between insurers. begin insert The bill would make certain categories of persons who are exempt from the existing act, subject to the act, thereby requiring those persons to seek licensure in order to practice as a licensee under the act. end insert The bill would place additional eligibility requirements on applicants for a nonresident license. The bill would also repeal the provisions relating to an interim license, and would instead create an apprentice public insurance adjuster license to facilitate the training necessary to ensure reasonable competency in the responsibilities and duties of a public insurance adjuster, and would set forth the various terms and conditions of the license. The bill would make an apprentice public insurance adjuster subject to a felony conviction if he or she knowingly falsifies the fingerprints or begin delete photograph end delete begin insert photographs end insert submitted as part of his or her application for a license. Because the bill would create begin delete a new crime, end delete begin insert new crimes, end insert it would impose a state-mandated local program.

(3) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

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

SECTION 1.  

Section 1722 of the Insurance Code is amended
to read:

1722.  

If a natural person while licensed pursuant to the
provisions of this chapter or Chapter 6 (commencing with Section
1760), 7 (commencing with Section 1800), or 8 (commencing with
Section 1831) of this part, Part 5 (commencing with Section 12140)
of Division 2, or Chapter begin delete 1 (commencing with Section 14000) or end delete
2 (commencing with Section 15000) of Division 5 enters the
military service of the United States and is in that service at a time
prescribed for the filing of a renewal application, the filing of that
application is waived, and the license held by that licensee at the
time of his or her entry into military service shall remain in force
during the period of that military service and until the end of the
license year in which he or she is released from that service but
not for less than six months after that release. During that begin delete period,
that end delete begin insert period the end insert person may secure a license of the type held by
him or her on his or her entry into military service upon the filing
of an application and paying the fee therefor without the necessity
of taking begin delete any end delete begin insert an end insert examination or paying begin delete any end delete begin insert a end insert penalty.

SEC. 2.  

Section 1751.5 of the Insurance Code is amended to
read:

1751.5.  

The fees required by this chapter and by Chapter 6
(commencing with Section 1760), Chapter 7 (commencing with
Section 1800), and Chapter 8 (commencing with Section 1831) of
this part and by Chapter begin delete 1 (commencing with Section 14000) and
Chapter end delete 2 (commencing with Section 15000) of Division 5 are
filing fees, no portion of which shall be refunded whether or not
the application is acted upon or the examination is taken.

begin delete

SEC. 3.  

Section 14000 of the Insurance Code is amended to
read:

14000.  

This chapter may be cited as the Independent Insurance
Adjuster Act.

SEC. 4.  

Section 14001 of the Insurance Code is amended to
read:

14001.  

As used in this chapter, the following terms have the
following meanings:

(a) “Catastrophe” means an event that results in a large number
of deaths or injuries, causes extensive damage or destruction of
facilities that provide and sustain human needs, produces an
overwhelming demand on state and local response resources and
mechanisms, causes a severe long-term effect on general economic
activity, or severely affects state, local, and private sector
capabilities to begin and sustain response activities.

(b) “Commissioner” means the Insurance Commissioner.

(c) “Department” means the Department of Insurance.

(d) “Fingerprints” means an impression of the lines on the finger
taken for the purposes of identification.

(e) “Home state” means the District of Columbia and any state
or territory of the United States in which an independent insurance
adjuster maintains his, her, or its principal place of residence or
business and is licensed to act as a resident independent insurance
adjuster. If the resident state does not license independent insurance
adjusters, the independent insurance adjuster may designate
California as his, her, or its home state, provided that the
independent insurance adjuster is licensed and in good standing.

(f) “Individual” means a natural person.

(g) “Licensee” means a person licensed under this chapter.

(h) “Manager” means the individual under whose direction,
control, charge, or management the business of a licensee is
operated.

(i) “Nonresident” means a person who is not a resident of
California at the time of the performance of the act referred to in
Section 14071.

(j) “Person” includes any individual, firm, company, association,
organization, partnership, limited liability company, and
corporation.

SEC. 5.  

Section 14010 of the Insurance Code is repealed.

SEC. 6.  

Section 14010 is added to the Insurance Code, to read:

14010.  

The commissioner shall administer and enforce the
provisions of this chapter.

SEC. 7.  

Section 14020 of the Insurance Code is amended to
read:

14020.  

(a) A person shall not engage in a business regulated
by this chapter, or act or assume to act as, or represent himself or
herself to be, a licensee unless he or she is licensed as an
independent insurance adjuster in accordance with this chapter.

(b) A person shall not falsely represent that he or she is
employed by a licensee.

SEC. 8.  

Section 14021 of the Insurance Code is repealed.

SEC. 9.  

Section 14021 is added to the Insurance Code, to read:

14021.  

An independent insurance adjuster, for purposes of this
chapter, is all of the following:

(a) An individual, a business entity, an independent contractor,
or an employee of a contractor, who contracts for compensation
with insurers or self-insurers.

(b) A person whose tax treatment by the insurers or self-insurers
is consistent with that of an independent contractor rather than an
employee, as defined in Section 3121 of Title 26 of the United
States Code.

(c) A person who investigates, negotiates, or settles property,
casualty, or workers’ compensation claims for insurers or for
self-insurers.

SEC. 10.  

Section 14022 of the Insurance Code is amended to
read:

14022.  

This chapter does not apply to any of the following:

(a) An officer or employee of the United States of America, or
of this state or a political subdivision thereof, while that officer or
employee is engaged in the performance of his or her official
duties.

(b) A person engaged exclusively in the business of obtaining
and furnishing information as to the financial rating of persons.

(c) A charitable philanthropic society or association duly
incorporated under the laws of this state, which is organized and
maintained for the public good and not for private profit.

(d) An attorney at law admitted to practice in California, when
acting in his or her professional capacity as an attorney.

(e) A licensed collection agency or an employee thereof while
acting within the scope of his or her employment, while making
an investigation incidental to the business of the agency, including
an investigation of the location of a debtor or his or her property
where the contract with an assignor creditor is for the collection
of claims owed or due or asserted to be owed or due or the
equivalent thereof.

(f) An officer, director, manager, or employee of an authorized
insurer, surplus line insurer, a risk retention group, or an
attorney-in-fact of a reciprocal insurer.

(g) A licensed insurance agent or broker, attorney-in-fact of a
reciprocal insurer, or managing general agent of the insurer to
whom claim authority has been granted by the insurer.

(h) The legal owner of personal property that has been sold
under a conditional sales agreement or a mortgagee under the terms
of a chattel mortgage.

(i) Any bank subject to the jurisdiction of the Commissioner of
Business Oversight under Division 1 (commencing with Section
99) of the Financial Code or the Comptroller of the Currency of
the United States.

(j) A person employed solely to obtain facts surrounding a claim
or to furnish technical assistance to a licensed independent
insurance adjuster.

(k) Any building contractor, engineer, technical expert, or other
person who is engaged by an insurer or licensed independent
insurance adjuster to provide an expert or professional evaluation
of the extent, cause, or origin of damage to the insured property,
but who does not otherwise participate in the process of adjusting
claims.

(l) An individual who is employed to investigate suspected
fraudulent insurance claims but who does not adjust losses or
determine claims payments.

(m) A person who solely performs executive, administrative,
managerial, or clerical duties or any combination thereof and who
does not investigate, negotiate, or settle claims with policyholders,
claimants, or their legal representative.

(n) A licensed health care provider or its employee who provides
managed care if the services do not include the determination of
compensability.

(o) A managed care organization or any of its employees who
provide managed care services if the services do not include the
determination of compensability.

(p) A person who settles only reinsurance or subrogation claims.

(q) A United States manager of the United States branch of an
alien insurer.

(r) A person who investigates, negotiates, or settles life, accident
and health, annuity, or disability insurance claims.

(s) An individual employee, under a self-insured arrangement,
who adjusts claims on behalf of his or her employer.

  

SEC. 11.  

Section 14022.5 of the Insurance Code is amended
to read:

14022.5.  

(a) In the event of an emergency situation as declared
by the commissioner, claims arising out of the emergency,
catastrophe, disaster, or other similar occurrence may be adjusted
by a nonlicensed independent insurance adjuster upon registration
with the commissioner if all of the following requirements are met:

(1) The work performed by the nonlicensed independent
insurance adjuster is under the active direction, control, charge,
or management of a licensed independent insurance adjuster or an
insurer authorized to do business in this state.

(2) Registration with the commissioner is accomplished within
five working days from the date on which the nonlicensed
independent insurance adjuster commences the claims adjusting
activity in connection with the emergency situation.

(b) “Registration,” within the meaning of this section, means a
written letter to the commissioner, submitted by the supervising
licensed independent insurance adjuster or admitted insurer, naming
the nonlicensed independent insurance adjusters, identifying their
independent insurance adjuster licenses held in other jurisdictions,
and stating when their claims adjusting activity commenced.

(c) Registration under this section is valid for a period of 90
days from the date of the registration letter. Before the lapse of
that period, the commissioner may grant further 90-day extensions
as he or she deems appropriate upon written request from the
supervising licensed independent insurance adjuster or the admitted
insurer.

SEC. 12.  

Section 14024 of the Insurance Code is amended to
read:

14024.  

(a) An individual application shall be verified and shall
include all of the following:

(1) The full legal name and business, resident, and mailing
addresses of the applicant.

(2) The name under which the applicant intends to do business.

(3) The applicant’s birth date and social security number.

(4) The application fees set forth in Section 14097.

(5) A statement as to the general nature of the business in which
the applicant intends to engage.

(6) A statement as to the classifications under which the
applicant desires to be qualified.

(7) Two recent photographs of the applicant, of a type prescribed
by the commissioner, and one classifiable set of his or her
fingerprints, to be sent to a live scan fingerprint provider as directed
by the department, if fingerprints are not submitted in person with
a live scan fingerprinting service provider certified by the
Department of Justice.

(8) A verified statement of his or her experience qualifications,
unless applying for an apprentice independent insurance adjuster
license.

(9) Other information, evidence, statements, or documents as
may be required by the commissioner.

(b) A business entity application shall be verified and shall
include all of the following:

(1) The full legal name and residence address of each of its
partners, officers, and directors, and its manager.

(2) The name under which the applicant intends to do business.

(3) The name of a licensed independent insurance adjuster who
is responsible for the business entities compliance with this chapter.

(4) That the applicant paid the fees set forth in Section 14097.

(5) A statement as to the general nature of the business in which
the applicant intends to engage.

(6) A statement as to the classifications under which the
applicant desires to be qualified.

(7) Other information, evidence, statements, or documents as
may be required by the commissioner.

SEC. 13.  

Section 14025 of the Insurance Code is amended to
read:

14025.  

Before a license is granted, the applicant shall meet all
of the following requirements:

(a) Be at least 18 years of age.

(b) Not have committed acts or crimes constituting grounds for
denial of licensure under Sections 1668 and 1669.

(c) Shall have had at least two years of experience in adjusting
insurance claims or the equivalent thereof as determined by the
commissioner, unless applying for an apprentice independent
insurance adjuster license.

(d) If the applicant resides in a state that does not license
independent insurance adjusters, he or she is required to be licensed
in good standing to designate California as his or her home state.

(e) (1) Completed a 20-hour prelicensing education course of
study.

(2) A nonresident applicant currently licensed as a home state
independent insurance adjuster in another state who has met that
state’s prelicensing education requirements is exempt from
completing the prelicensing education requirement.

(f) Successfully passed the examination for the independent
insurance adjuster license, unless he or she qualifies for an
exemption in Section 14026.

(g) Comply with those other qualifications that the commissioner
may require by regulation.

SEC. 14.  

Section 14025.1 is added to the Insurance Code, to
read:

14025.1.  

(a) The apprentice independent insurance adjuster
license is a license to facilitate the experience, education, and
training necessary to ensure reasonable competency in the
responsibilities and duties of an independent insurance adjuster.

(b) An individual applying for an apprentice independent
insurance adjuster license shall submit an application in a format
prescribed by the commissioner and shall declare under penalty
of suspension, revocation, or refusal of the license that the
statements made in the application are true, correct, and complete
to the best of the individual’s knowledge and belief. Before
approving the application, the commissioner shall determine that
the individual meets all of the following:

(1) Is at least 18 years of age.

(2) Is a resident of California and has designated California as
his or her home state.

(3) Has a business or mailing address in California for the
acceptance of service of process.

(4) Has not committed any act that is a ground for suspension,
revocation, or denial of licensure as set forth in Sections 1668,
1668.1, and 1669.

(5) Is trustworthy, reliable, and of good reputation, evidence of
which may be determined by the commissioner.

(6) Has paid the fees set forth in subdivision (h) of Section
14097.

(c) The apprentice independent insurance adjuster license shall
be subject to the following terms and conditions:

(1) The applicant shall submit, with the apprentice independent
insurance adjuster application, an attestation from a licensed
independent insurance adjuster certifying that the apprentice will
be subject to training, direction, and control by the licensed
independent insurance adjuster and further certifying that the
licensed independent insurance adjuster assumes responsibility
for the actions of the apprentice in the apprentice’s capacity as an
independent insurance adjuster.

(2) The apprentice independent insurance adjuster is only
authorized to adjust claims in California.

(3) The apprentice independent insurance adjuster is restricted
to participation in the investigation, settlement, and negotiation of
claims subject to the review and final determination of the claim
by a supervising licensed independent insurance adjuster.

(4) Compensation of an apprentice independent insurance
adjuster shall only be on a salaried or hourly basis.

(5) The apprentice independent insurance adjuster shall not be
required to take and successfully complete the independent
insurance adjuster examination to adjust claims as an apprentice
independent insurance adjuster. At any time during the
apprenticeship, the apprentice independent insurance adjuster may
choose to take the examination. If the individual takes and
successfully completes the independent insurance adjuster exam,
the apprentice independent insurance adjuster license shall
automatically terminate and an independent insurance adjuster
license shall be issued to that individual in its place.

(6) The apprentice independent insurance adjuster license is
valid for a period not to exceed 12 months and is nonrenewable.

(7) The licensee shall be subject to suspension, revocation, or
denial pursuant to Sections 1668, 1668.1, and 1669.

(8) The applicant shall submit two recent photographs of the
applicant, of a type prescribed by the commissioner, and one
classifiable set of his or her fingerprints, to be sent to a live scan
fingerprint provider as directed by the department, if fingerprints
are not submitted in person with a live scan fingerprinting service
provider certified by the Department of Justice.

SEC. 15.  

Section 14026 of the Insurance Code is repealed.

SEC. 16.  

Section 14026 is added to the Insurance Code, to
read:

14026.  

(a) An applicant for an independent insurance adjuster
license, unless applying for an apprentice independent insurance
adjuster license or crop insurance adjuster license, shall pass a
written examination.

(1) The examination shall test the knowledge of the applicant
concerning the duties and responsibilities of an independent
insurance adjuster and this code.

(2) An applicant applying for an examination shall remit a
nonrefundable fee as prescribed by the commissioner in Section
14097.

(b) An individual who applies for an independent insurance
adjuster license in California who holds a home state license in
another state as an independent insurance adjuster shall not be
required to complete the examination if he or she successfully
passed an examination as a condition of receiving an independent
insurance adjuster license in his or her home state. This exemption
applies to individuals who are currently licensed in their home
state or if the home state license expired and the application is
received by the commissioner within 90 days of expiration.

(c) An individual who applies for an apprentice independent
insurance adjuster license pursuant to Section 14025.1, and who
adjusts claims in that capacity, shall not be required to take and
successfully complete the independent insurance adjuster
examination.

SEC. 17.  

Section 14027 of the Insurance Code is repealed.

SEC. 18.  

Section 14028 of the Insurance Code is amended to
read:

14028.  

After a hearing, the commissioner may deny a license
unless the application makes a showing satisfactory to the
commissioner that the applicant, if an individual, has not, or if the
applicant is a person other than an individual, that its manager and
each of its officers and partners have not done any of the following:

(a) Been refused a license under this chapter or had a license
revoked.

(b) Been an officer, partner, or manager of any person who has
been refused a license under this chapter or whose license has been
revoked.

(c) While unlicensed committed, or aided and abetted the
commission of, any act for which a license is required by this
chapter.

(d) Committed any act or crime constituting grounds for denial
of licensure under Section 1668.

SEC. 19.  

Section 14029 of the Insurance Code is repealed.

SEC. 20.  

Section 14029 is added to the Insurance Code, to
read:

14029.  

Each organization licensed under this chapter shall
designate an individual also licensed as an independent insurance
adjuster to be responsible for the organization’s compliance with
state law.

SEC. 21.  

Section 14030 of the Insurance Code is repealed.

SEC. 22.  

Section 14031 of the Insurance Code is amended to
read:

14031.  

A hearing held under this chapter to determine whether
an application for a license should be granted shall be conducted
in accordance with Chapter 5 (commencing with Section 11501)
of Part 1 of Division 3 of Title 2 of the Government Code, and the
commissioner shall have all of the powers granted therein.

SEC. 23.  

Section 14032 of the Insurance Code is amended to
read:

14032.  

The form and content of the license shall be determined
by the commissioner.

SEC. 24.  

Section 14037 of the Insurance Code is repealed.

SEC. 25.  

Section 14038 of the Insurance Code is amended to
read:

14038.  

(a) Any licensee or officer, director, or partner of a
licensee may divulge to any law enforcement officer or district
attorney, or to his or her representative, any information he or she
may acquire as to any criminal offense, but he or she shall not
divulge to any other person, except as he or she may be required
by law to do so, any information acquired by him or her except at
the direction of the employer or client for whom the information
was obtained.

(b) A licensee or officer, director, or partner of a licensee shall
not knowingly make any false report to his or her employer or
client for whom information was being obtained.

(c) A written report shall not be submitted to a client except by
the licensee who shall exercise diligence in ascertaining whether
or not the facts and information in that report are true and correct.

(d) A licensee or officer, director, or partner of a licensee shall
not use a badge in connection with the official activities of the
licensee’s business.

(e) A licensee or officer, director, or partner of a licensee shall
not use a title, wear a uniform, use an insignia, use an identification
card, or make any statement with the intent to give an impression
that he or she is connected in any way with the federal government,
a state government, or any political subdivision of a state
government.

(f) A licensee or officer, director, or partner of a licensee, shall
not enter any private building or portion thereof without the consent
of the owner or of the person in legal possession thereof.

(g) A licensee shall not appear as an assignee party in any
proceeding involving claim and delivery, replevin, or other
possessory action, action to foreclose a chattel mortgage,
mechanic’s lien, materialman’s lien, or any other lien.

(h) A licensee shall not permit an agent in his or her own name
to advertise, engage clients, furnish reports, or present bills to
clients, or in any manner whatever to conduct business for which
a license is required under this chapter. All business of the licensee
shall be conducted in the name of and under the control of the
licensee.

(i) A licensee acting as an independent automobile damage
appraiser or adjuster or as an automobile insurance claims adjuster,
appraiser, or representative shall not receive any financial benefit
from an automobile repair facility. “Financial benefit” means the
receiving of any commission or gratuity, discount on repair costs,
free repairs, employment by a repair facility, or possession of more
than 3 percent direct ownership in an automobile repair facility
located in this state.

SEC. 26.  

Section 14039 of the Insurance Code is amended to
read:

14039.  

A person licensed as an independent insurance adjuster
shall not do any of the following:

(a) Fail to disclose his or her full financial interest in a contract
or agreement executed by him or her for the adjustment of a claim
prior to the execution thereof.

(b) Use any misrepresentation to solicit a contract or agreement
to adjust a claim.

(c) Solicit or accept remuneration from, or have a financial
interest exceeding 3 percent in, any salvage, repair, or other firm
that obtains business in connection with any claim that he or she
has a contract or agreement to adjust.

SEC. 27.  

Section 14040 of the Insurance Code is amended to
read:

14040.  

Any badge or cap insignia worn by a person who is a
licensee, officer, director, or partner of a licensee shall be of a
design approved by the commissioner, and shall bear on its face
a distinctive word indicating the name of the licensee.

SEC. 28.  

Section 14042 of the Insurance Code is amended to
read:

14042.  

(a) A licensee shall not conduct a business under a
fictitious or other business name unless and until he or she has
obtained the written authorization of the commissioner to do so.

(b) The commissioner shall not authorize the use of a fictitious
or other business name that is so similar to that of a public officer
or agency or of that used by another licensee that the public may
be confused or misled thereby.

(c) The authorization shall require, as a condition precedent to
the use of any fictitious name, that the licensee comply with Section
1724.5.

(d) A licensee desiring to conduct his or her business under
more than one fictitious business name shall obtain the
authorization of the commissioner in the manner prescribed in this
section for the use of that name.

(e) The licensee shall pay a fee of ten dollars ($10) for each
authorization to use an additional fictitious business name and for
each change in the use of a fictitious business name. If the original
license is issued in a nonfictitious name and authorization is
requested to have the license reissued in a fictitious business name,
the licensee shall pay a fee of twelve dollars ($12) for that
authorization.

  

SEC. 29.  

Section 14061 of the Insurance Code is amended to
read:

14061.  

The commissioner may suspend or revoke a license
issued under this chapter or may issue a restricted license in
accordance with Section 14026.5 if he or she determines that the
licensee or if the licensee is a person other than an individual, that
any of its officers, directors, partners, or its designated responsible
person has done any of the following:

(a) Made any false statement or given any false information in
connection with an application for a license or a renewal or
reinstatement of a license.

(b) Violated any provisions of this chapter.

(c) Violated any rule of the commissioner adopted pursuant to
the authority contained in this chapter.

(d) Been convicted of any crime substantially related to the
qualifications, functions, and duties of the holder of the registration
or license in question.

(e) Impersonated, or permitted or aided and abetted an employee
to impersonate, a law enforcement officer or employee of the
United States of America, or of any state or political subdivision
thereof.

(f) Committed or permitted any employee to commit any act,
while the license was expired that would be cause for the
suspension or revocation of a license, or grounds for the denial of
an application for a license.

(g) Willfully failed or refused to render to a client services or
a report as agreed between the parties and for which compensation
has been paid or tendered in accordance with the agreement of the
parties.

(h) Committed assault, battery, or kidnapping, or used force or
violence on any person, without proper justification.

(i) Knowingly violated or advised, encouraged, or assisted the
violation of any court order or injunction in the course of business
as a licensee.

(j) Acted as a runner or capper for any attorney.

(k) Committed any act that is a ground for denial of an
application for license under this chapter.

(l) Purchased, possessed, or transported any tear gas weapon
except as authorized by law. A violation of this subdivision may
be punished by the suspension of a license for a period to be
determined by the commissioner.

SEC. 30.  

Section 14063 of the Insurance Code is amended to
read:

14063.  

The commissioner may suspend or revoke a license
issued under this chapter or may issue a restricted license in
accordance with Section 14026.5 if the commissioner determines
that the licensee, if an individual, or if the licensee is a person other
than an individual, that any of its officers, directors, partners, or
its designated responsible person has done any of the following:

(a) Used any letterhead, advertisement, or other printed matter,
or in any matter whatever represented that he or she is an
instrumentality of the federal government, or of a state or any
political subdivision thereof.

(b) Used a name different from that under which he or she is
currently licensed in any advertisement, solicitation, or contract
for business.

SEC. 31.  

Section 14064 of the Insurance Code is amended to
read:

14064.  

(a) The commissioner may suspend or revoke a license
issued under this chapter or may issue a restricted license in
accordance with Section 14026.5 if the commissioner determines
that the licensee, if an individual, or if the licensee is a person other
than an individual, that any of its officers, directors, partners, or
its designated responsible person has committed any act in the
course of the licensee’s business constituting dishonesty or fraud.

(b) “Dishonesty or fraud” as used in this section includes, in
addition to other acts not specifically enumerated herein, all of the
following:

(1) Knowingly making a false statement relating to evidence or
information obtained in the course of employment, or knowingly
publishing a slander or a libel in the course of business.

(2) Using illegal means in the collection or attempted collection
of a debt or obligation.

(3) Manufacture of evidence.

(4) Acceptance of employment adverse to a client or former
client relating to a matter with respect to which the licensee has
obtained confidential information by reason of or in the course of
his or her employment by that client or former client.

(5) Impersonating, or permitting or aiding and abetting an
employee to impersonate, a law enforcement officer or employee
of the United States of America, or of any state or political
subdivision thereof.

SEC. 32.  

Section 14078 of the Insurance Code is repealed.

SEC. 33.  

Section 14078 is added to the Insurance Code, to
read:

14078.  

(a) Unless refused licensure pursuant to Sections 14060
to 14065, inclusive, a nonresident person shall receive a
nonresident independent insurance adjuster license if all of the
following apply:

(1) The applicant is currently licensed in good standing as an
independent insurance adjuster in his, her, or its resident or home
state.

(2) The applicant paid the fees required by Section 14097.

(3) The applicant submitted to the commissioner the completed
application for licensure.

(4) The applicant’s home state awards nonresident independent
insurance adjuster licenses to residents of California on the same
basis.

(b) The commissioner may verify the independent insurance
adjuster’s licensing status through any appropriate database,
including the Producer Database maintained by the National
Association of Insurance Commissioners, its affiliates or
subsidiaries, or may request certification of good standing.

(c) As a condition to the continuation of a nonresident
independent insurance adjuster license, the licensee shall maintain
a resident independent insurance adjuster license in his, her, or its
home state.

(1) The nonresident independent insurance adjuster license
issued under this chapter shall terminate and be surrendered
immediately to the commissioner if the resident independent
insurance adjuster license terminates for any reason, unless the
termination is due to the independent insurance adjuster being
issued a new resident independent insurance adjuster license in
his, her, or its new home state.

(2) The nonresident independent insurance adjuster license shall
terminate if the person’s home state does not award nonresident
independent insurance adjuster licenses to residents of California
on the same basis.

(3) (A) The licensee is required to give notice of resident
independent insurance adjuster license termination to any state
that issued a nonresident independent insurance adjuster license.

(B) The notice is required to be given within 30 days of the
termination date. If the resident independent insurance adjuster
license was terminated for change in resident home state, then the
notice is required to include both the previous and current address.

(4) Maintaining a resident independent insurance adjuster license
is required for the nonresident independent insurance adjuster
license to remain valid.

SEC. 34.  

Section 14079 is added to the Insurance Code, to
read:

14079.  

(a) An independent insurance adjuster shall be honest
and fair in all communications with the insured, the insurer, and
the public.

(b) An independent insurance adjuster shall provide
policyholders and claimants with prompt and knowledgeable
service and courteous, fair, and objective treatment at all times.

(c) An independent insurance adjuster shall not give legal advice
and shall not deal directly with any policyholder or claimant who
is represented by legal counsel without the consent of the legal
counsel involved.

(d) An independent insurance adjuster shall comply with all
local, state, and federal privacy and information security laws.

(e) An independent insurance adjuster shall identify himself or
herself as an independent insurance adjuster and, if applicable,
shall identify his or her employer when dealing with any
policyholder or claimant.

(f) An independent insurance adjuster shall not have any
financial interest in any adjustment or shall not acquire for himself,
herself, or any person any interest or title in salvage, without first
receiving written authority from the principal.

SEC. 35.  

Section 14080 of the Insurance Code is amended to
read:

14080.  

Any person who knowingly falsifies the fingerprints
or photographs submitted under paragraph (7) of subdivision (a)
of Section 14024 or paragraph (8) of subdivision (c) of Section
14025.1 is guilty of a felony. Any person who violates any of the
other provisions of this chapter is guilty of a misdemeanor
punishable by fine not to exceed five hundred dollars ($500), or
by imprisonment in the county jail not to exceed one year, or by
both the fine and imprisonment.

SEC. 36.  

Section 14090.1 of the Insurance Code is amended
to read:

14090.1.  

(a) An individual who holds an independent insurance
adjuster license and who is not exempt under subdivision (b) shall
satisfactorily complete a minimum of 24 hours, of which three
hours are to be in ethics, of continuing education courses pertinent
to the duties and responsibilities of an independent insurance
adjuster license and shall report the completion of this coursework
to the insurance commissioner on a biennial basis in conjunction
with his or her license renewal cycle.

(b) This section does not apply to any 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 independent insurance
adjuster license who has met the continuing education requirements
of his or her designated home state.

(3) An individual licensed as an independent insurance adjuster
and as a property or casualty broker-agent, pursuant to Section
1625, who has met the continuing education requirements specified
in Section 1749.3.

(4) An individual licensed as an apprentice independent
insurance adjuster pursuant to Section 14025.1.

SEC. 37.  

Section 14097 of the Insurance Code is amended to
read:

14097.  

The amount of fees prescribed by this chapter, unless
otherwise fixed, is that fixed in the following schedule:

(a) The application fee for the qualifying examination for an
original license is twenty-nine dollars ($29).

(b) The application fee for an original branch office certificate
is eighteen dollars ($18).

(c) The fee for an original license application is an amount equal
to the renewal fee in effect on the last regular renewal date before
the date on which the license is issued, except that, if the license
will expire less than one year after its issuance, then the fee is an
amount equal to 50 percent of the renewal fee in effect on the last
regular renewal date before the date on which the license is issued.
The commissioner may, by appropriate regulation, provide for the
waiver or refund of the initial license fee where the license is issued
less than 45 days before the date on which it will expire.

(d) The renewal fee shall be fixed by the commissioner as
follows:

(1) For a license as an independent insurance adjuster, not more
than one hundred eighteen dollars ($118).

(2) For a branch office certificate, not more than twenty-four
dollars ($24).

(e) The application and license fee for classifications prescribed
by the commissioner, in addition to those provided for in this
chapter, and the application and license fees for a change in the
type of business organization of a licensee, shall be in the amount
prescribed by rule and regulation of the commissioner.

(f) The delinquency fee shall be 50 percent of the renewal fee
in effect on the date of expiration.

(g) The fee for reexamination of an applicant is twelve dollars
($12).

(h) The application fee for an apprentice independent insurance
adjuster license shall be fixed by the commissioner by regulation
and shall be reasonably related to the actual cost to the department
in performing its duties under this chapter.

SEC. 38.  

Section 14099 of the Insurance Code is amended to
read:

14099.  

Application or license fees shall not be refunded
pursuant to Section 1751.5.

end delete

begin delete SEC. 39. end delete
begin insert SEC. 3. end insert   

Section 15001 of the Insurance Code is amended to
read:

15001.  

As used in this chapter the following terms have the
following meanings:

begin insert

(a) “Apprentice public insurance adjuster” means a person
who is qualified in all respects as a public adjuster, except as to
experience, education, or training.

end insert begin insert

(b) “Business entity” means a corporation, association,
partnership, limited liability company, limited liability partnership,
or other legal entity.

end insert begin insert

(c) “Catastrophic disaster” means an event that results in large
numbers of deaths and injuries; causes extensive damage or
destruction of facilities that provide and sustain human needs;
produces an overwhelming demand on state and local response
resources and mechanisms; causes a severe long-term effect on
general economic activity; and severely affects state, local, and
private sector capabilities to begin and sustain response activities.
A catastrophic disaster shall be declared by the President of the
United States or the Governor of the state or district in which the
disaster occurred.

end insert begin delete

(a)

end delete

begin insert (d) end insert  “Commissioner” means the Insurance Commissioner.

begin delete

(b)

end delete

begin insert (e) end insert  “Department” means the Department of Insurance.

begin delete

(c)

end delete

begin insert (f) end insert  “Fingerprints” means an impression of the lines on the finger
taken for the purposes of identification.

begin delete

(d)

end delete

begin insert (g) end insert  “Home state” means the District of Columbia and any state
or territory of the United States in which the public insurance
adjuster’s principal place of residence or principal place of business
is located. If neither the state in which the public insurance adjuster
maintains the principal place of residence nor the state in which
the public insurance adjuster maintains the principal place of
business has a substantially similar law governing public insurance
adjusters, the public insurance adjuster may declare another state
in which it becomes licensed and acts as a public insurance adjuster
to be the “home state.”

begin delete

(e)

end delete

begin insert (h) end insert  “Licensee” means a person licensed under this chapter.

begin delete

(f)

end delete

begin insert (i) end insert  “Person” includes any individual, firm, company, association,
organization, partnership, limited liability company, and
corporation.

begin delete SEC. 40. end delete
begin insert SEC. 4. end insert   

Section 15007 of the Insurance Code is repealed.

begin delete SEC. 41. end delete
begin insert SEC. 5. end insert   

Section 15007 is added to the Insurance Code, to read:

15007.  

begin insert (a) end insert begin insert   end insert “Public insurance adjuster,” for purposes of this
chapter, means any person who, for compensation or any other
thing of value on behalf of an insured, does any of the following:

begin delete

(a)

end delete

begin insert (1) end insert  Acts or aids, solely in relation to first party claims arising
under insurance contracts that insure the real or personal property
of the insured, on behalf of an insured in negotiating for, or
effecting the settlement of, a claim for loss or damage coverage
by an insurance contract.

begin delete

(b)

end delete

begin insert (2) end insert  Advertises for employment as a public adjuster of insurance
claims or solicits business or represents himself or herself to the
public as a public insurance adjuster of first party insurance claims
for losses or damages arising out of policies of insurance that insure
real or personal property.

begin delete

(c)

end delete

begin insert (3) end insert  Directly or indirectly solicits business, investigates, or adjusts
losses, or advises an insured about first party claims for losses or
damages arising out of policies of insurance that insure real or
personal property for another person engaged in the business of
adjusting losses or damages covered by an insurance policy, for
the insured.

begin insert

(b) Paragraph (1) of subdivision (a) does not prohibit a public
insurance adjuster from handling third-party claims if liability is
not in dispute.

end insert

begin delete SEC. 42. end delete
begin insert SEC. 6. end insert   

Section 15008 of the Insurance Code is amended to
read:

15008.  

This chapter does not apply to any of the following:

begin delete

(a) An officer or employee of the United States of America, or
of the state or of a political subdivision thereof while the officer
or employee is engaged in the performance of his or her official
duties.

(b) A charitable philanthropic society duly incorporated under
the laws of this state that is organized and maintained for the public
good and not for private profit.

(c)

end delete

begin insert (a) end insert  An attorney at law begin delete in end delete begin insert admitted to practice in this state, when end insert
performing his or her duties as an attorney at law.

begin delete

(d) Admitted insurers, agents, and insurance brokers licensed
by the state performing duties in connection with insurance
transactions by them.

(e) The legal owner of personal property that has been sold
under a conditional sales agreement or a mortgagee under the terms
of a chattel mortgage.

(f) Any salaried office employee who performs exclusively
clerical and administrative duties attendant to the disposition of
the business regulated by this chapter.

(g)

end delete

begin insert (b) end insert  Photographers, estimators, appraisers, engineers, and
arbitrators, who are employed exclusively by a public insurance
adjuster for the purpose of furnishing technical assistance to a
licensed public insurance adjuster.

begin delete

(h) A private investigator licensed pursuant to Chapter 11.3
(commencing with Section 7512) of Division 3 of the Business
and Professions Code while acting within the scope of that license.

end delete begin delete

(i)

end delete

begin insert (c) end insert  A person who negotiates or settles claims arising under a
life or health insurance policy or an annuity contract.

begin delete

(j)

end delete

begin insert (d) end insert  A licensed health care provider, or employee of a licensed
health care provider, who prepares or files a health claim form on
behalf of a patient.

begin delete

(k)

end delete

begin insert (e) end insert  A person who settles subrogation claims between insurers.

begin delete SEC. 43. end delete
begin insert SEC. 7. end insert   

Section 15009.1 is added to the Insurance Code, to
read:

15009.1.  

(a) The applicant shall complete a 20-hour
prelicensing course of study for the lines of authority for a public
insurance adjuster license.

(b) An applicant who resides in another state that does not
license public insurance adjusters is eligible to designate California
as his or her home state. He or she is required to complete the
prelicensing education, pass the public insurance adjuster
examination, and meet the license application requirements before
a license can be issued.

(c) An applicant licensed as a public insurance adjuster in
another state is exempt from completing a prelicensing education
course to apply for a California public insurance adjuster license
if, at the time of application, the applicant’s out-of-state license is
current or was canceled within 90 calendar days. The applicant is
required to be a licensee in good standing in his or her home state.

begin delete SEC. 44. end delete
begin insert SEC. 8. end insert   

Section 15010 of the Insurance Code is amended to
read:

15010.  

An application shall be verified and shall include all
of the following:

(a) The full name and business address of the applicant.

(b) The name under which the applicant intends to do business.

(c) A statement as to the general nature of the business in which
the applicant intends to engage.

begin delete

(d) A statement as to the classifications under which the
applicant desires to be qualified.

end delete begin delete

(e)

end delete

begin insert (d) end insert  If the applicant is a person other than an individual, the full
name and resident address of each of its partners, officers, and
directors.

begin delete

(f)

end delete

begin insert (e) end insert  Two begin delete recent photographs end delete begin insert photographs, not older than six
months, end insert of the applicant, of a type prescribed by the commissioner,
and one classifiable set of his or her fingerprints, to be sent to a
live scan fingerprint provider as directed by the department, if
fingerprints are not submitted in person with a live scan
fingerprinting service provider certified by the Department of
Justice.

begin delete

(g)

end delete

begin insert (f) end insert  A verified statement of his or her experience qualifications.

begin delete

(h)

end delete

begin insert (g) end insert  Other information, evidence, statements, or documents as
may be required by the commissioner.

begin delete SEC. 45. end delete
begin insert SEC. 9. end insert   

Section 15011 of the Insurance Code is amended to
read:

15011.  

Before an application for a license is granted, the
applicant shall meet all of the following requirements:

(a) Be at least 18 years of age.

begin delete

(b) Be a bona fide resident of the State of California.

end delete begin delete

(c)

end delete

begin insert (b) end insert  Be of good character and shall not have committed acts or
crimes constituting grounds for denial of licensure under Section
1668 or 1669.

begin delete

(d)

end delete

begin insert (c) end insert  Shall have begin delete had sufficient experience, or special education
or training, or both, end delete begin insert at least two years experience end insert in the handling
of loss claims under insurance contracts as determined by
regulations adopted by the commissioner, and be competent to
transact business and discharge the responsibilities of a public
insurance adjuster in a manner as to safeguard the interests of the
public. begin insert A person who has been licensed as an apprentice public
insurance adjuster, as set forth in Section 15016, for 12 full months,
shall be considered to have met the two-year experience
requirement. end insert

begin delete

(e)

end delete

begin insert (d) end insert  Maintain an office in the State of California with public
access during regular business hours.

begin delete

(f)

end delete

begin insert (e) end insert  Pass an exam given by the commissioner in regard to
property loss adjusting.

begin delete

(g)

end delete

begin insert (f) end insert  Post a surety bond executed by a surety company authorized
to do business in this state in the sum of twenty thousand dollars
($20,000).

begin delete

(h)

end delete

begin insert (g) end insert  For an organization applicant, designate a licensed individual
public insurance adjuster to be responsible for the organization’s
compliance with the insurance laws, rules, and regulations of this
state.

begin delete

(i)

end delete

begin insert (h) end insert  For an organization applicant, authorize only licensed
individual public insurance adjusters to exercise authority under
the organization’s license.

begin delete

(j)

end delete

begin insert (i) end insert  Comply with any other qualifications as required by the
commissioner.

begin delete SEC. 46. end delete
begin insert SEC. 10. end insert   

Section 15013 of the Insurance Code is amended to
read:

15013.  

Each applicant for a license as a public insurance
adjuster shall, prior to issuance of the license, personally take and
pass, to the satisfaction of the commissioner, an examination given
by the department as follows:

(a) The examination shall be prescribed by the commissioner
and shall be of sufficient scope to reasonably test the applicant’s
knowledge, among other things, of basic insurance theory, essential
elements of contracts, technical competence in the handling of the
various lines for which the applicant is being tested, claims ethics
and knowledge of the Unfair Practices Act, and the duties and
responsibilities of public insurance adjusters under the law.

(b) The examination shall be given to applicants under the
supervision of the department or the department’s examination
contractor and shall be in written form.

(c) The commissioner shall, within a reasonable period of time,
not to exceed 30 days, transmit the results of the examination and
action taken on the application to the applicant.

(d) In the event an applicant who is otherwise qualified fails the
examination, the commissioner may administer a begin delete reexamination
after a waiting period not to exceed six months. end delete begin insert reexamination. end insert

(e) The examination shall be given at those times and places
within the state as the commissioner deems reasonably necessary
to serve the convenience of the department and applicants.

begin delete SEC. 47. end delete
begin insert SEC. 11. end insert   

Section 15015 of the Insurance Code is repealed.

begin delete SEC. 48. end delete
begin insert SEC. 12. end insert   

Section 15016 of the Insurance Code is repealed.

begin delete SEC. 49. end delete
begin insert SEC. 13. end insert   

Section 15016 is added to the Insurance Code, to
read:

15016.  

(a) The apprentice public insurance adjuster license is
a license to facilitate the training necessary to ensure reasonable
competency to fulfill the responsibilities of a public insurance
adjuster as defined in Section 15007.

(b) The apprentice public insurance adjuster license is subject
to the following terms and conditions:

(1) The applicant shall submit, with an application for an initial
apprentice public insurance adjuster license, an attestation or
certification from a licensed public insurance adjuster assuming
responsibility for all actions of that applicant.

(2) The apprentice public insurance adjuster is authorized to
adjust claims only in California.

(3) The applicant is required to qualify under the applicable
provisions of Section 15011.

(4) The applicant is required to pay a license fee of one hundred
dollars ($100).

(5) The applicant is required to comply with any other
qualifications required by the commissioner.

(6) The apprentice public insurance adjuster shall not be required
to take and successfully complete the prescribed public insurance
adjuster examination.

(7) The licensee shall at all times be an employee of a public
insurance adjuster and be subject to training, direction, and control
by a licensed public insurance adjuster.

(8) The apprentice public insurance adjuster license is for a
period not to exceed 12 months, and the license shall not be
renewed.

(9) The licensee is restricted to participation in factual
investigation, tentative closing, and solicitation of losses subject
to the review and final determination of a licensed public insurance
adjuster.

(10) Compensation of an apprentice public insurance adjuster
shall only be on a salaried or hourly basis.

(11) The licensee shall be subject to suspension, revocation, or
conditions in accordance with Section 1668.

(12) The applicant shall submit two begin delete recent photographs end delete
begin insert photographs, not older than six months, end insert of the applicant, of a type
prescribed by the commissioner, and one classifiable set of his or
her fingerprints, to be sent to a live scan fingerprint provider as
directed by the department, if fingerprints are not submitted in
person with a live scan fingerprinting service provider certified
by the Department of Justice.

begin delete SEC. 50. end delete
begin insert SEC. 14. end insert   

Section 15017 of the Insurance Code is amended to
read:

15017.  

(a) A nonresident license shall be issued by the
commissioner to qualified persons who meet the requirements begin delete of
this chapter as end delete set forth in begin delete subdivisions (a), (c), (d), (e), (f), (g),
and (j) of end delete Section 15011, and who have appointed the
commissioner as an agent for service of process in this state.

(b) Unless denied licensure pursuant to Sections 15018, 15018.5,
and 15019, a nonresident person shall receive a nonresident public
insurance adjuster license if all of the following apply:

(1) The person is currently licensed in good standing as a public
insurance adjuster in his or her home state.

(2) The person has paid the fees required by Section 15060.

(3) The person has provided proof of financial responsibility as
required by Section 15033.

(4) The individual has submitted to the commissioner the
completed application for licensure.

(5) The person’s home state awards nonresident public insurance
adjuster licenses to residents of California on the same basis.

begin delete SEC. 51. end delete
begin insert SEC. 15. end insert   

Section 15020 of the Insurance Code is amended to
read:

15020.  

The form and content of the license shall be determined
by the commissioner.

begin delete SEC. 52. end delete
begin insert SEC. 16. end insert   

Section 15027 of the Insurance Code is amended to
read:

15027.  

(a) A licensee shall not, directly or indirectly, act within
this state as a public insurance adjuster without having first entered
into a contract, in writing, on a form approved by the insurance
commissioner and executed in duplicate by the public adjuster and
the insured or a duly authorized representative. One original
contract shall be kept on file by the licensee, available at all times
for inspection, without notice, by the commissioner or his or her
duly authorized representative, and one original contract shall be
given to the insured.

(b) The written contract between the licensee and the insured
shall contain each of the following:

(1) Title of “Public Adjuster Contract.”

(2) The name, business name, license number, telephone
number, and address of the licensee.

(3) The name and address of the insured.

(4) A description of the loss and its location, if applicable.

(5) The name of the insurer and the policy number, if known.

(6) The full salary, fee, commission, or other consideration the
licensee is to receive for services under the contract.

begin delete

(7) The following statement: “No public adjuster shall charge
a fee, commission, or other valuable consideration based, in whole
or in part, on any amount paid to the insured by the insurer prior
to the date of the written contract between the insured and the
public adjuster.”

end delete begin insert

(7) A public adjuster’s fee, commission, or other valuable
consideration shall not cause the insured to receive less than any
amount paid to the insured by the insurer prior to the date of the
written contract between the insured and the public adjuster.

end insert

(8) A description of the services to be provided to the insured.

(9) Signatures of the licensee and the insured.

(10) The date the contract was signed by the licensee and the
date the contract was signed by the insured.

(11) The following statement: “As a public adjuster, I am
required by the California Insurance Code to post a surety bond
in the sum of $20,000 to cover certain kinds of claims made by
you, the insured. If you have any questions concerning the surety
bond, you may contact the California Department of Insurance
begin delete Producer end delete Licensing begin delete Call Center end delete begin insert Hotline end insert at 1-800-967-9331 or
www.insurance.ca.gov.”

(12) A statement of the compensation to the licensee, including
the percentage and base to which the percentage applies.

(13) A statement that the insured has the right to begin delete rescind end delete begin insert cancel end insert
the contract within begin delete seven calendar end delete begin insert three business end insert days of signing
begin delete it. end delete begin insert it and being provided the signed contract. end insert

(c) A contract covered by this section shall not contain a contract
term that does any of the following:

(1) Allows the licensee’s fee to be collected when money is due
from an insurer, but not paid, or allows a licensee to collect the
entire fee from the first payment issued by an insurer, rather than
as a percentage of each payment issued by an insurer.

(2) Requires the insured to authorize an insurer to issue a
payment only in the name of the licensee.

(3) Imposes late fees or collection costs on the insured.

(d) A licensee shall not solicit or attempt to solicit a client for
employment during a loss-producing occurrence. A loss-producing
occurrence continues to exist begin delete under end delete begin insert when end insert any of the following
begin delete conditions: end delete begin insert conditions exist at the property that is subject to
solicitation end insert begin insert : end insert

(1) Any of the circumstances that caused the loss are begin delete present. end delete
begin insert present at the property where the solicitation would otherwise take
place. end insert

(2) Emergency responders are begin delete present. end delete begin insert present at the property
where the solicitation would otherwise take place. end insert

(3) An evacuation order is still in begin delete effect. end delete begin insert effect at the property
where the solicitation would otherwise take place. end insert

(e) A licensee or any other person or entity offering, for a fee,
service regulated by this chapter shall not solicit a policyholder
for employment or initiate any contact with a policyholder between
the hours of 6 p.m. and 8 begin delete a.m. end delete begin insert a.m., unless requested by the
policyholder. end insert

(f) A licensee shall not use any form of contract other than that
approved by the commissioner and that contains each of the
following:

(1) A provision allowing the client to begin delete rescind end delete begin insert cancel end insert the contract
by written notice sent or delivered by certified mail, return receipt
requested, or other form of mailing that provides proof of mailing,
to the licensee by midnight of the begin delete seventh calendar end delete begin insert third business end insert
day after the day on which the client signs a contract that complies
with this begin delete section. end delete begin insert section and is provided a copy of that signed
contract. end insert Each copy of the contract shall contain a completed form,
captioned “Notice of Cancellation,” that shall be placed at the end
of the contract and be separated from the remainder of the contract
by a printed line. Nothing shall be printed on the reverse side of
the notice form. The notice form shall be completed by the licensee,
and shall contain in type of at least 10-point the following statement
written in the same language, e.g., Spanish, as used in the contract:

Notice of Cancellation

 

	(Date of Contract)

 

You may cancel this contract within begin delete seven calendar end delete begin insert three
business end insert days from the above date begin insert that you signed the contract
and you were provided with a copy of that signed contract, except
that, as it pertains to a disaster as defined in Section 15001, your
right to cancel is five calendar days end insert without any penalty or
obligation to pay your public adjuster, other than for reimbursement
of moneys paid by your public adjuster for out-of-pocket
emergency expenses for you or on your behalf. If your public
adjuster seeks reimbursement from you for out-of-pocket
emergency expenses, your public adjuster shall provide you with
an itemized statement of those emergency expenses advanced to
you or on your behalf if the cancellation is made within the first
begin delete seven calendar end delete begin insert three business end insert days after the contract was begin delete initiated. end delete
begin insert signed by you and you were provided a copy of the signed contract. end insert
Nothing in this contract permits your public adjuster to recover
any costs, except for out-of-pocket emergency expenses advanced
to you.

If you cancel, any money or other consideration paid by you will
be returned within five business days following the receipt of your
cancellation notice, and any security interest arising out of the
transaction will be canceled.

To cancel this contract, mail or deliver by certified mail, return
receipt requested, or other form of mailing that provides proof of
mailing, a signed and dated copy of this cancellation notice, or
any other written notice, or send a telegram to:

 

(name of public adjuster)
at
(address of public adjuster’s place of business)
not later than midnight of
	(Date)
I hereby cancel this contract
	(Date)
(Client’s signature)

 

(2) The statement “WE REPRESENT THE INSURED ONLY”
prominently displayed in at least 10-point type.

(3) A provision disclosing the percentage of the insured’s claim,
or other fee, that the licensee will charge for his or her services.
The licensee shall obtain the initials of the insured next to this
provision.

(4) A conspicuous statement in at least 10-point type in
immediate proximity to the space reserved for the client’s signature,
as follows: “You may cancel this contract at any time before
midnight of the begin delete seventh calendar end delete begin insert third business end insert day after the date
of this contract. See the notice of cancellation form at the end of
this contract for an explanation of this right.”

(g) A licensee shall not knowingly make any false report to his
or her employer or divulge to any other person, except as he or
she may be required by law to do so, any information acquired by
him or her except at the direction of the employer or a client for
whom the information is obtained.

(h) A licensee shall not use a badge in connection with the
official activities of the licensee’s business.

(i) A licensee shall not permit an employee or agent in his or
her own name to advertise, engage clients, furnish reports, or
present bills to clients, or in any manner whatever to conduct
business for which a license is required under this chapter.

(j) Pursuant to subdivisions (a) and (c) of Section 15006, the
commissioner shall have the authority to enforce the provisions
of this chapter and prosecute violations thereunder committed by
unlicensed persons or entities that hold themselves out or act as
public insurance adjusters.

(k) For purposes of this section, “business day” shall have the
same meaning given to that term in subdivision (e) of Section
1689.5 of the Civil Code, as in effect on the operative date of this
statute.

(l) The contract and the notice of cancellation set forth in
paragraph (1) of subdivision (f) shall be written in the same
language, e.g., Spanish, as principally used in the negotiation of
the contract.

(m) Within five business days after a contract has been canceled,
the licensee shall tender to the client any payments made by the
client and any note or other evidence of indebtedness, including
an itemized statement of all amounts tendered to the client.

(n) The licensee is not entitled to compensation for services
performed prior to cancellation, other than for reimbursement of
moneys paid by the licensee for out-of-pocket emergency expenses
for the client or on behalf of the client. If the licensee seeks
reimbursement from the client for out-of-pocket emergency
expenses, and if the cancellation is made within the first begin delete seven
calendar end delete begin insert three business end insert days after the contract was initiated, the
licensee shall provide the client with an itemized statement of those
emergency expenses advanced to the client or on behalf of the
client by the licensee. Nothing in this subdivision shall permit the
licensee to recover any costs, except for out-of-pocket emergency
expenses advanced to the client. Any security interest shall be
canceled upon cancellation of the contract.

(o) Notice of cancellation given by the client need not take the
particular form specified in paragraph (1) of subdivision (f). Notice
of cancellation, however expressed, is effective if it indicates the
intention of the client not to be bound by the contract.

(p) Cancellation occurs when the client gives written notice of
cancellation by certified mail, return receipt requested, or other
form of mailing that provides proof of mailing, to the licensee at
the address specified in the contract.

(q) Notice of cancellation, if given by mail, is effective when
sent by certified mail, return receipt requested, or other form of
mailing that provides proof of mailing, properly addressed with
postage prepaid.

(r) Until the licensee has complied with this section, the client
may cancel the contract.

(s) The contracts shall be executed in duplicate. The licensee
shall retain one original contract, and shall provide the insured
with an original contract.

(t) The licensee shall provide the client with an original contract
and notice of cancellation at the time the client signs the contract.

(u) Any confession of judgment or waiver of the provisions of
this chapter shall be deemed contrary to public policy and shall be
void and unenforceable.

(v) Prior to the signing of the contract, the licensee shall provide
the insured with a separate printed disclosure document in the
following form that bears the name and license number of the
licensee:

“DISCLOSURE

There are three types of insurance adjusters that could be
involved in the processing of your insurance claim. The definitions
of the three types are as follows:

(1) Public adjusters means the insurance adjusters who do not
work for your insurance company. They work for you, the insured,
to assist in the preparation, presentation, and settlement of your
claim. You hire them by signing a contract and agreeing to pay
them a fee or commission based on a percentage of the settlement,
or other method of compensation. Public adjusters are required to
be licensed, bonded, and tested by the State of California to
represent your interest only.

(2) Company adjusters means the insurance adjusters who are
employees of your insurance company. They represent your
insurance company and are paid by your insurance company. They
will not charge you a fee and are not individually licensed or tested
by the State of California.

(3) Independent adjusters means the insurance adjusters who
are hired on a contract basis by your insurance company to
represent the company in the settlement of the claim. They are
paid by your insurance company. They will not charge you a fee.

You have the right, but are not required, to use the services of
a public adjuster in the preparation and handling of your insurance
claim.

Public adjusters cannot solicit your business while the loss is
underway, or between the hours of 6 p.m. and 8 a.m.

Your “Public Adjuster Contract,” with a public adjuster
representing you, should clearly indicate the amount of the fee you
will be paying to your public adjuster. Your contract, with this fee
percentage, should be acknowledged by your initials on the “Public
Adjuster Contract.” The salary, fee, commission, or other
consideration is to be paid by you (the insured), not the insurance
company (insurer).

You have the right to cancel the contract with your public
adjuster, without any penalty or obligation, within begin delete seven calendar end delete
begin insert three business end insert days from the date the contract is signed. begin insert If the
contract was established from a catastrophic disaster as defined
in subdivision (c) of Section 15001, the insured has the right to
cancel within five calendar days. end insert

If you cancel the contract with your public adjuster, any money
or other consideration paid by you will be returned within five
business days following the receipt of your cancellation notice,
and any security interest arising out of the transaction will be
canceled.

To cancel the contract with your public adjuster, mail or deliver
by certified mail, return receipt requested, or other form of mailing
that provides proof of mailing, a signed and dated copy of the
cancellation notice, or any other written notice, or send a telegram
to the public adjuster at the address in the contract.

You have the right to, and may, communicate with your
insurance company at any time if you feel the need during the
claims process.

If you have any concerns or questions, the officers at the
California Department of Insurance Consumer Hotline are there
to help you. Please begin delete call end delete begin insert contact end insert them at 1-800-927-HELP begin delete (4357), end delete
begin insert (4357) end insert or www.insurance.ca.gov.”

(w) No later than begin delete seven calendar end delete begin insert three business end insert days after the
cancellation has expired, the public adjuster shall notify the insurer,
its adjuster, or its attorney, that he or she has entered into a written
contract with the insured.

(x) If the licensee misrepresents or conceals a material fact from
the insured prior to execution of the contract, the insured is entitled
to rescind the contract without time limit.

begin insert

(y) Notwithstanding any other provision of this section, if a
property loss is included in an area that is subject to a catastrophic
disaster, as defined in Section 15001, the insured shall have the
right to cancel a contract with a public adjuster within five
calendar days of signing it and being provided a copy of the signed
contract.

end insert

begin delete SEC. 53. end delete
begin insert SEC. 17. end insert   

Section 15027.1 of the Insurance Code is amended
to read:

15027.1.  

(a) In addition to the restrictions in subdivision (e)
of Section 15027, a licensee shall not solicit a contract of
engagement for residential properties under this chapter begin insert that are
included in an area subject to a catastrophic disaster end insert until seven
calendar days have elapsed from the conclusion of a loss-producing
occurrence as defined in subdivision (d) of Section 15027.

(b) Subdivision (a) shall not apply if the licensee is contacted
directly by the insured or the insured’s representative.

begin insert

(c) Nothing in subdivision (a) shall prohibit a licensee from
providing a policyholder, without making personal contact with
the policyholder, with accurate written materials explaining
services provided by public insurance adjusters.

end insert

begin insert

begin insert SEC. 18. end insert   

end insert

begin insert Section 15028 of the end insert begin insert Insurance Code end insert begin insert is amended to
read: end insert

15028.  

No person licensed as a public insurance adjuster shall
do any of the following:

(a) Use any misrepresentation to solicit a contract or agreement
to adjust a claim.

(b) Solicit or accept remuneration from, or have a financial
interest in, any salvage, repair or other firm which obtains business
in connection with any claim he or she has a contract or agreement
to adjust.

(c) Advance moneys to any potential client or insured in order
to obtain business.

(d) Offer to pay a fee, commission, or other valuable
consideration, exceeding one hundred dollars ($100), to a person
for referring a loss unless he or she employs that person to so act
for him or her and that person is licensed to act as an adjuster under
the provisions of this chapter.

begin insert

(e) Permit an employee or agent, in his or her own name, to
advertise, engage clients, furnish reports, present bills to clients,
or in any manner conduct business for which a license is required
pursuant to this chapter.

end insert

begin delete SEC. 54. end delete
begin insert SEC. 19. end insert   

Section 15031 of the Insurance Code is amended to
read:

15031.  

(a) A licensee shall not conduct a business under a
fictitious or other business name unless and until he or she has
obtained the written authorization of the commissioner to do so.

(b) The commissioner shall not authorize the use of a fictitious
or other business name that is so similar to that of a public officer
or agency or that is used by another licensee that the public may
be confused or misled thereby.

(c) The authorization shall require, as a condition precedent to
the use of a fictitious name, that the licensee comply with Section
1724.5.

(d) A licensee desiring to conduct his or her business under
more than one fictitious name shall obtain the authorization of the
commissioner in a manner prescribed in this section for the use of
additional fictitious names.

(e) The licensee shall pay a fee of ten dollars ($10) for each
authorization to use an additional fictitious name and for each
change in the use of a fictitious business name. If the original
license is issued in a nonfictitious name and authorization is
requested to have the license reissued in a fictitious business name,
the licensee shall pay a fee of ten dollars ($10) for that
authorization.

begin delete

SEC. 55.  

Section 15036 of the Insurance Code is amended to
read:

15036.  

In lieu of the surety bond required by this chapter there
may be deposited with the State of California the sum of twenty
thousand dollars ($20,000) in cash, or evidence of deposit of the
sum of twenty thousand dollars ($20,000) in banks authorized to
do business in this state and insured by the Federal Deposit
Insurance Corporation, or investment certificates or share accounts
in the amount of twenty thousand dollars ($20,000) issued by a
savings association doing business in this state and insured by the
Federal Deposit Insurance Corporation, or evidence of a certificate
of funds or share account of the sum of twenty thousand dollars
($20,000) in a credit union as defined in Section 14002 of the
Financial Code whose share deposits are guaranteed by the
National Credit Union Administration or guaranteed by any other
agency approved by the Department of Business Oversight.

end delete

begin insert

begin insert SEC. 20. end insert   

end insert

begin insert Section 15036 of the end insert begin insert Insurance Code end insert begin insert is amended to
read: end insert

15036.  

In lieu of the surety bond required by this chapter there
may be deposited with the State of California the sum of twenty
thousand dollars ($20,000) in cash, or evidence of deposit of the
sum of twenty thousand dollars ($20,000) in banks authorized to
do business in this state and insured by the Federal Deposit
Insurance Corporation, or investment certificates or share accounts
in the amount of twenty thousand dollars ($20,000) issued by a
savings association doing business in this state and insured by the
Federal Deposit Insurance Corporation, or evidence of a certificate
of funds or share account of the sum of twenty thousand dollars
($20,000) in a credit union as defined in Section begin delete 14000 end delete begin insert 14002 end insert of
the Financial Code whose share deposits are guaranteed by the
National Credit Union Administration or guaranteed by any other
agency approved by the Department of Business Oversight.

begin delete SEC. 56. end delete
begin insert SEC. 21. end insert   

Section 15053 of the Insurance Code is amended to
read:

15053.  

begin delete Any end delete begin insert A end insert person who knowingly falsifies the fingerprints
or photographs submitted under subdivision (f) of Section 15010
or paragraph (12) of subdivision (b) of Section 15016 is guilty of
a felony. begin delete Any end delete begin insert A end insert person who violates any of the other provisions
of this chapter is guilty of a misdemeanor punishable by begin insert a end insert fine not
to exceed five hundred dollars ($500) or by imprisonment in begin delete the end delete
begin insert a end insert county jail not to exceed one year, or by both that fine and
imprisonment.

begin delete SEC. 57. end delete
begin insert SEC. 22. end insert   

Section 15056 of the Insurance Code is amended to
read:

15056.  

(a) Except as otherwise provided in this article, an
expired license or branch office certificate may be renewed at any
time within one year after its expiration on the filing of an
application for renewal on a form prescribed by the commissioner,
and the payment of a renewal fee in effect on the actual renewal
date. If the license or certificate is renewed after its expiration, the
licensee, as a condition precedent to renewal, shall also pay the
delinquency fee prescribed by this chapter. Renewal under this
section shall be effective on the date on which the application is
filed, on the date on which the renewal fee is paid, or on the date
on which the delinquency fee, if any, is paid, whichever occurs
last. If so renewed, the license or certificate shall continue in effect
through the date provided in Section 15054 that next occurs after
the effective date of the renewal, when it shall expire if it is not
again renewed.

(b) Renewal of a license or certificate does not prohibit the
bringing of disciplinary proceedings for an act committed before
the effective date of the renewal.

begin delete SEC. 58. end delete
begin insert SEC. 23. end insert   

Section 15060 of the Insurance Code is amended to
read:

15060.  

The amount of fees prescribed by this chapter, unless
otherwise fixed, is that fixed in the following schedule:

(a) The application fee for the qualifying examination for an
original license is twenty-five dollars ($25).

(b) The application fee for an original branch office certificate
is fifteen dollars ($15).

(c) The fee for an original license application in the amount
equal to the renewal fee in effect on the last regular renewal date
before the date on which the license is issued, except that, if the
license will expire less than one year after its issuance, then the
fee is an amount equal to 50 percent of the renewal fee in effect
on the last regular renewal date before the date on which the license
is issued.

(d) The renewal fee shall be fixed by the commissioner as
follows:

(1) For a license as a public insurance adjuster, not more than
one hundred dollars ($100).

(2) For a branch office certificate, not more than twenty dollars
($20).

(e) The application and license fee for applications prescribed
by the commissioner, in addition to those in this chapter, and the
application and license fee for a change in the type of business
organization of the licensee, shall be in the amount prescribed by
rule and regulation of the commissioner.

(f) The delinquency fee shall be 50 percent of the renewal fee
in effect on the date of expiration.

(g) The fee for reexamination of an applicant is ten dollars ($10).

begin delete SEC. 59. end delete
begin insert SEC. 24. end insert   

Section 15062 of the Insurance Code is amended to
read:

15062.  

Application or license fees shall not be refunded
pursuant to Section 1751.5.

begin delete SEC. 60. end delete
begin insert SEC. 25. end insert   

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.