BILL NUMBER: SB 488 AMENDED
BILL TEXT
AMENDED IN SENATE JANUARY 4, 2016
INTRODUCED BY Senator Block
FEBRUARY 26, 2015
An act to amend Sections 1722, 1751.5, 14000, 14001,
14020, 14022, 14022.5, 14024, 14025, 14028, 14031, 14032, 14038,
14039, 14040, 14042, 14061, 14063, 14064, 14080, 14090.1, 14097,
14099, 15001, 15008, 15010, 15011, 15013, 15017, 15020,
15027, 15027.1, 15028, 15031, 15036, 15053, 15056, 15060,
and 15062 of, to add Sections 14025.1, 14079, and
Section 15009.1 to, to repeal Sections 14027,
14030, 14037, and Section 15015 of, and to
repeal and add Sections 14010, 14021, 14026, 14029, 14078,
15007, 15007 and 15016 of, the Insurance Code,
relating to insurance.
LEGISLATIVE COUNSEL'S DIGEST
SB 488, as amended, Block. Independent insurance
adjusters: public Public insurance adjusters.
(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.
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.
(2) Existing
Existing 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 the a 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. The bill
would make certain categories of persons who are exempt from the
exis ting act, subject to the act, thereby requiring those
persons to seek licensure in order to practice as a licensee under
the act. 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 photograph photographs submitted as
part of his or her application for a license. Because the bill would
create a new crime, new crimes, 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 1 (commencing with Section 14000) or
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
period, that period the 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 any
an examination or paying any
a 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 1 (commencing with Section 14000) and Chapter
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.
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.
SEC. 39. SEC. 3. Section 15001 of
the Insurance Code is amended to read:
15001. As used in this chapter the following terms have the
following meanings:
(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.
(b) "Business entity" means a corporation, association,
partnership, limited liability company, limited liability
partnership, or other legal entity.
(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.
(a)
(d) "Commissioner" means the Insurance Commissioner.
(b)
(e) "Department" means the Department of Insurance.
(c)
(f) "Fingerprints" means an impression of the lines on
the finger taken for the purposes of identification.
(d)
(g) "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."
(e)
(h) "Licensee" means a person licensed under this
chapter.
(f)
(i) "Person" includes any individual, firm, company,
association, organization, partnership, limited liability company,
and corporation.
SEC. 40. SEC. 4. Section 15007 of
the Insurance Code is repealed.
SEC. 41. SEC. 5. Section 15007 is
added to the Insurance Code, to read:
15007. (a) "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:
(a)
(1) 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.
(b)
(2) 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.
(c)
(3) 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.
(b) Paragraph (1) of subdivision (a) does not prohibit a public
insurance adjuster from handling third-party claims if liability is
not in dispute.
SEC. 42. SEC. 6. Section 15008 of
the Insurance Code is amended to read:
15008. This chapter does not apply to any of the following:
(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)
(a) An attorney at law in
admitted to practice in this state, when performing his or her
duties as an attorney at law.
(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)
(b) 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.
(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.
(i)
(c) A person who negotiates or settles claims arising
under a life or health insurance policy or an annuity contract.
(j)
(d) 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.
(k)
(e) A person who settles subrogation claims between
insurers.
SEC. 43. SEC. 7. 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.
SEC. 44. SEC. 8. 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.
(d) A statement as to the classifications under which the
applicant desires to be qualified.
(e)
(d) If the applicant is a person other than an
individual, the full name and resident address of each of its
partners, officers, and directors.
(f)
(e) Two recent photographs
photographs, not older than six months, 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.
(g)
(f) A verified statement of his or her experience
qualifications.
(h)
(g) Other information, evidence, statements, or
documents as may be required by the commissioner.
SEC. 45. SEC. 9. 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.
(b) Be a bona fide resident of the State of California.
(c)
(b) Be of good character and shall not have committed
acts or crimes constituting grounds for denial of licensure under
Section 1668 or 1669.
(d)
(c) Shall have had sufficient experience, or
special education or training, or both, at least two
years experience 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. 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.
(e)
(d) Maintain an office in the State of California with
public access during regular business hours.
(f)
(e) Pass an exam given by the commissioner in regard to
property loss adjusting.
(g)
(f) 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).
(h)
(g) 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.
(i)
(h) For an organization applicant, authorize only
licensed individual public insurance adjusters to exercise authority
under the organization's license.
(j)
(i) Comply with any other qualifications as required by
the commissioner.
SEC. 46. SEC. 10. 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
reexamination after a waiting period not to exceed six months.
reexamination.
(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.
SEC. 47. SEC. 11. Section 15015 of
the Insurance Code is repealed.
SEC. 48. SEC. 12. Section 15016 of
the Insurance Code is repealed.
SEC. 49. SEC. 13. 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 recent photographs
photographs, not older than six months, 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. 50. SEC. 14. 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
of this chapter as set forth in subdivisions (a),
(c), (d), (e), (f), (g), and (j) of 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.
SEC. 51. SEC. 15. Section 15020 of
the Insurance Code is amended to read:
15020. The form and content of the license shall be determined by
the commissioner.
SEC. 52. SEC. 16. 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.
(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."
(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.
(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 Producer
Licensing Call Center Hotline 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
rescind cancel the contract within
seven calendar three business days of signing
it. it and being provided the signed
contract.
(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 under when
any of the following conditions:
conditions exist at the property that is subject to solicitation
:
(1) Any of the circumstances that caused the loss are
present. present at the property where the
solicitation would otherwise take place.
(2) Emergency responders are present.
present at the property where the solicitation would otherwise take
place.
(3) An evacuation order is still in effect.
effect at the property where the solicitation would otherwise
take place.
(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 a.m. a.m., unless
requested by the policyholder.
(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 rescind
cancel 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
seventh calendar third business day
after the day on which the client signs a contract that complies with
this section. section and is provided a copy
of that signed contract. 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 seven calendar
three business days from the above date
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
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
seven calendar three business days after the
contract was initiated. signed by you and you
were provided a copy of the signed contract. 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 seventh calendar third business
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 seven
calendar three business 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 seven
calendar three business days from the date the
contract is signed. 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.
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 call contact them at
1-800-927-HELP (4357), (4357) or
www.insurance.ca.gov."
(w) No later than seven calendar three
business 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.
(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.
SEC. 53. SEC. 17. 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 that
are included in an area subject to a catastrophic disaster
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.
(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.
SEC. 18. Section 15028 of the Insurance
Code is amended to read:
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.
(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.
SEC. 54. SEC. 19. 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.
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.
SEC. 20. 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 14000 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.
SEC. 56. SEC. 21. Section 15053 of
the Insurance Code is amended to read:
15053. Any A 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. Any A
person who violates any of the other provisions of this chapter is
guilty of a misdemeanor punishable by a fine not to exceed
five hundred dollars ($500) or by imprisonment in the
a county jail not to exceed one year, or by both
that fine and imprisonment.
SEC. 57. SEC. 22. 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.
SEC. 58. SEC. 23. 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).
SEC. 59. SEC. 24. Section 15062 of
the Insurance Code is amended to read:
15062. Application or license fees shall not be refunded pursuant
to Section 1751.5.
SEC. 60. SEC. 25. 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.