Amended in Assembly June 16, 2016

Amended in Assembly May 17, 2016

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, 15001, 15008, 15010, 15011, 15013, 15017, 15020, 15027, 15027.1, 15028, 15031, 15036, 15053, 15056, 15060, and 15062 of, to add begin delete Section end delete begin insert Sections end insert 15009.1 begin insert and 15059.2 end insert to, to repeal Section 15015 of, and to repeal and add Section 15016 of, the Insurance Code, relating to insurance.

LEGISLATIVE COUNSEL’S DIGEST

SB 488, as amended, Block. Public insurance adjusters.

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. 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 a county jail not to exceed one year, or by both that fine and imprisonment. begin insert Existing law prescribes a schedule for various public insurance adjuster application, license, and license renewal fees. end insert

This bill would revise and recast the above provisions by, among other things, expanding 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 existing 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 photographs submitted as part of his or her application for a license. begin delete Because the bill would create new crimes, it would impose a state-mandated local program. end delete begin insert The bill would also change various public insurance adjuster application, license, and renewal fees, as prescribed. end insert

begin insert

Existing law requires an individual who holds a public insurance adjuster license and who is not exempt, as specified, to satisfactorily complete a minimum of 24 hours of continuing education courses pertinent to the duties and responsibilities of a public insurance adjuster license, to be reported to the Insurance Commissioner on a biennial basis in conjunction with his or her license renewal cycle.

end insert begin insert

This bill would require a person who fails to meet those continuing education and reporting requirements, and who has not been granted an extension of time by the commissioner within which to comply, to have his or her license placed on inactive status until he or she demonstrates to the satisfaction of the commissioner that he or she has complied with all of those requirements, as specified. The bill would also prohibit a licensee who is placed on inactive status from performing specified activities.

end insert begin insert

Because the bill would create new crimes, the bill would impose a state-mandated local program.

end insert

begin delete (3) end delete begin delete   end delete 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:

begin insert

begin insert SECTION 1. end insert   

end insert begin insert

The Legislature finds and declares that the
changes to the fee amounts in this act codify the current fees
charged by the Department of Insurance. The fees in the current
statutes, as noted in Sections 15031 and 15060 of the Insurance
Code, do not reflect the incremental increases approved by the
Insurance Commissioner pursuant to Section 12978 of the
Insurance Code since 1985.

end insert

begin delete SECTION 1. end delete

begin insert SEC. 2. end insert   

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), Chapter 7 (commencing with Section 1800), or Chapter 8
(commencing with Section 1831) of this part, Part 5 (commencing
with Section 12140) of Division 2, or Chapter 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 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 an
examination or paying a penalty.

begin delete SEC. 2. end delete

begin insert SEC. 3. end insert   

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 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. end delete

begin insert SEC. 4. 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:

(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.

(d) “Commissioner” means the Insurance Commissioner.

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

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

(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.”

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

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

begin delete SEC. 4. end delete

begin insert SEC. 5. end insert   

Section 15008 of the Insurance Code is amended to
read:

15008.  

This chapter does not apply to any of the following:

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

(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.

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

begin delete

(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.

end delete begin delete

(e)

end delete

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

begin delete SEC. 5. end delete

begin insert SEC. 6. 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. begin delete The applicant is
required to be a licensee in good standing in his or her home state. end delete

begin delete SEC. 6. end delete

begin insert SEC. 7. 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.

(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.

(e) Two 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.

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

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

begin delete SEC. 7. end delete

begin insert SEC. 8. 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.

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

(c) Shall have 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.

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

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

(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).

(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.

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

(i) Comply with any begin delete other qualifications as required by the
commissioner. end delete begin insert requirement to file supplementary documents,
affidavits, and statements as may be necessary to obtain a full
disclosure of the information that will aid the commissioner in
determining whether the prerequisites for the license have been
met. end insert

begin delete SEC. 8. end delete

begin insert SEC. 9. 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 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.

begin delete SEC. 9. end delete

begin insert SEC. 10. end insert   

Section 15015 of the Insurance Code is repealed.

begin delete SEC. 10. end delete

begin insert SEC. 11. end insert   

Section 15016 of the Insurance Code is repealed.

begin delete SEC. 11. end delete

begin insert SEC. 12. 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 begin delete the applicable
provisions of end delete begin insert subdivisions (a) and (b) of end insert 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 begin delete other
qualifications required by the commissioner. end delete begin insert requirement to file
supplementary documents, affidavits, and statements as may be
necessary to obtain a full disclosure of the information that will
aid the commissioner in determining whether the prerequisites for
the license have been met. end insert

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

(11) The applicant shall submit two 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.

begin insert

(12) The apprentice public insurance adjuster shall complete
the 20-hour prelicensing education course of study as defined in
Section 15009.1 during the license period.

end insert

begin delete SEC. 12. end delete

begin insert SEC. 13. 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 set
forth in 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. 13. end delete

begin insert SEC. 14. 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. 14. end delete

begin insert SEC. 15. 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.

(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
Licensing 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 cancel the
contract within three business days of signing 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 when any of the following conditions
exist at the property that is subject to solicitation:

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

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

(3) An evacuation order is still in 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., 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 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 third business day after the day
on which the client signs a contract that complies with this 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 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 three business days after the contract was
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 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 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 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 contact them at 1-800-927-HELP (4357) or
www.insurance.ca.gov.”

(w) No later than 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.

begin delete SEC. 15. end delete

begin insert SEC. 16. 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 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.

begin delete SEC. 16. end delete

begin insert SEC. 17. end insert   

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.

begin delete SEC. 17. end delete

begin insert SEC. 18. 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 begin delete ten dollars ($10) end delete begin insert twenty-five
dollars ($25) end insert 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 begin delete ten dollars ($10) end delete
begin insert twenty-five dollars ($25) end insert for that authorization.

begin delete SEC. 18. end delete

begin insert SEC. 19. end insert   

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.

begin delete SEC. 19. end delete

begin insert SEC. 20. end insert   

Section 15053 of the Insurance Code is amended to
read:

15053.  

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. 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 a county
jail not to exceed one year, or by both that fine and imprisonment.

begin delete SEC. 20. end delete

begin insert SEC. 21. 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 insert

begin insert SEC. 22. end insert   

end insert

begin insert Section 15059.2 is added to the end insert begin insert Insurance Code end insert begin insert , to
read: end insert

begin insert

begin insert 15059.2. end insert   

A person who fails to meet the requirements imposed
by Section 15059.1, and who has not been granted an extension
of time by the commissioner within which to comply, shall have
his or her license placed on inactive status until he or she
demonstrates to the satisfaction of the commissioner that he or
she has complied with all of the requirements of this article and
all other applicable law. A licensee placed on inactive status may
not perform the activities described in Section 1631. If a person
cannot perform the requirements of this article due to a disability
or inactivity due to special circumstances, the commissioner shall
provide a procedure for the person to place his or her license on
inactive status until the person demonstrates to the satisfaction of
the commissioner that he or she has complied with all of the
requirements of this article for the period of disability or inactivity.

end insert

begin delete SEC. 21. 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 begin delete chapter, unless
otherwise fixed, is that fixed end delete begin insert chapter is that end insert in the following
schedule:

(a) The begin delete application end delete fee for the qualifying examination for an
original license is begin delete twenty-five dollars ($25). end delete begin insert sixty-two dollars ($62). end insert

(b) The application fee for an original branch office certificate
is begin delete fifteen dollars ($15). end delete begin insert thirty-five dollars ($35). end insert

(c) The fee for an original license application begin delete 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 end delete begin insert is two
hundred forty dollars ($240). If end insert 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 begin delete fee shall be fixed by the commissioner end delete begin insert fees are end insert
as follows:

(1) For a license as a public insurance begin delete adjuster, not more than
one hundred dollars ($100). end delete begin insert adjuster, two hundred forty dollars
($240). end insert

(2) For a branch office begin delete certificate, not more than twenty dollars
($20). end delete begin insert certificate, fifty dollars ($50). end insert

begin delete

(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.

end delete begin insert

(e) The fee for replacing an identification card is twenty-five
dollars ($25).

end insert

(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 begin delete ten dollars ($10). end delete

begin insert twenty-five dollars ($25). end insert

begin delete SEC. 22. 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. 23. 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.