BILL NUMBER: SB 488	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  JUNE 16, 2016
	AMENDED IN ASSEMBLY  MAY 17, 2016
	AMENDED IN SENATE  JANUARY 4, 2016

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  Section  
Sections  15009.1  and 15059.2  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.  Existing law
prescribes a schedule for various   public insurance
adjuster application, license, and license renewal fees. 
   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.  Because the bill would create new crimes, it would
impose a state-mandated local program.   The bill would
also change various public insurance adjuster application, license,
and renewal fees, as prescribed.  
   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.  
   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.  
   Because the bill would create new crimes, the bill 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.    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. 
   SECTION 1.   SEC. 2.   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.
   SEC. 2.   SEC. 3.   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.
   SEC. 3.   SEC. 4.   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.
   SEC. 4.   SEC. 5.   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. 
   (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. 
   (e) 
    (d)  A person who settles subrogation claims between
insurers.
   SEC. 5.   SEC. 6.   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. 6.   SEC. 7.   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.
   SEC. 7.   SEC. 8.   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 of good character and shall   Shall
 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  other qualifications as required by
the commissioner.   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.

   SEC. 8.   SEC. 9.   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.
   SEC. 9.   SEC. 10.   Section 15015 of
the Insurance Code is repealed.
   SEC. 10.   SEC. 11.   Section 15016 of
the Insurance Code is repealed.
   SEC. 11.   SEC. 12.   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   subdivisions (a) and (b) 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.  
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. 
   (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. 
   (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. 
   SEC. 12.   SEC. 13.   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.
   SEC. 13.   SEC. 14.   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. 14.   SEC. 15.   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.
   SEC. 15.   SEC. 16.   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. 16.   SEC. 17.   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. 17.   SEC. 18.   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)
  twenty-five dollars ($25)  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)   twenty-five
dollars ($25)  for that authorization.
   SEC. 18.   SEC. 19.   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. 19.   SEC. 20.   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.
   SEC. 20.   SEC. 21.   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. 22.    Section 15059.2 is added to the 
 Insurance Code   , to read:  
   15059.2.  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. 
   SEC. 21.   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   chapter is that
 in the following schedule:
   (a) The  application  fee for the qualifying
examination for an original license is  twenty-five dollars
($25).   sixty-two dollars ($62). 
   (b) The application fee for an original branch office certificate
is  fifteen dollars ($15).   thirty-five dollars
($35). 
   (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
  is two hundred forty dollars ($240). 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
  fees are  as follows:
   (1) For a license as a public insurance  adjuster, not
more than one hundred dollars ($100).   adjuster, two
hundred forty dollars ($240). 
   (2) For a branch office  certificate, not more than twenty
dollars ($20).   certificate, fifty dollars ($50).
 
   (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.  
   (e) The fee for replacing an identification card is twenty-five
dollars ($25). 
   (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).   twenty-five dollars ($25).
   SEC. 22.   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. 23.   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.