Agent Licensing (Lesson 28.2-3)
Agent Internet Advertisements
His or her name as it appears on his or her insurance license, and any fictitious name approved by the commissioner The state of his or her domicile and principal place of business His or her license number
the general terms 'insurance agent,' 'insurance broker,' and 'insurance solicitor' to include the following licensing designations:
Property broker-agents Casualty broker-agents Personal lines broker-agents Limited lines automobile insurance agents
you are transacting in CA if you:
Provide an insurance premium quote to a California resident Accept an application for coverage from a California resident Communicate with a California resident regarding one or more terms of an agreement to provide insurance or an insurance policy
Administrator (RA)
any person who collects any charge or premium from, or who adjusts or settles claims on, residents of California in connection with life or health insurance coverage or annuities.
Charging Fees
A person licensed pursuant to the CIC shall not charge a fee for any service which is customarily associated with the solicitation of insurance sales or the servicing of insurance contracts written by the licensee or contracts for which the licensee is receiving compensation from the insurer. A licensee shall not receive any fee unless that fee is based upon a written agreement signed by the party to be charged.
Insurance Broker
a person who, for compensation and on behalf of another person, transacts insurance other than life, disability or health with, but not on behalf of, an insurer.
Reporting of Administrative Actions and Criminal Convictions
An applicant or licensee shall notify the commissioner when any of the background information set forth in this section changes after the application has been submitted or the license has been issued. If the licensee is listed as an endorsee on any business entity license, the licensee shall also provide this notice to any officer, director, or partner listed on that business entity license "Background information" means any of the following: a misdemeanor or felony conviction; a filing of felony criminal charges in state or federal court; an administrative action regarding a professional or occupational license; any licensee's discharge or attempt to discharge, in a personal or organizational bankruptcy proceeding, an obligation regarding any insurance premiums or fiduciary funds owed to any company, including a premium finance company, or managing general agent; and any admission, or judicial finding or determination, of fraud, misappropriation or conversion of funds, misrepresentation, or breach of fiduciary duty Notification to the commissioner shall be in writing and shall be sent within 30 days of the date the applicant or licensee learns of the change in background information
Agent vs. Analyst
An employee or officer of any insurer is not eligible for license as a life and disability insurance analyst A life insurer shall not pay a life and disability insurance analyst any commission directly or indirectly, on any life or disability insurance transacted by and in the capacity as a life and disability insurance analyst.
Agent Licensing Requirements
18 or older 20 credit hours of general insurance pre-licensing education (PRE) and 12 credit hours of ethics and California Insurance Code (CIC) pre-licensing education (32 hours total) is required to attain either a Life-Only Agent or an Accident and Health Agent license 40 credit hours of general insurance pre-licensing education (PRE) and 12 credit hours of ethics and California Insurance Code (CIC) pre-licensing education (52 hours total) is required to attain a Full Life Agent license (combined Life, Accident and Health Agent license) Passing a pre-licensing course final exam and receiving a course certificate of completion is required to sit for the California insurance exam Have not committed an act that is a ground for denial, suspension, or revocation of an insurance license Have not been convicted of a felony involving dishonesty or a breach of trust from conducting the business of insurance unless they have first obtained the written consent of the Insurance Commissioner Fingerprint impressions are required for unlicensed applicants and can be submitted at any time prior to taking the license examination, even before submitting the license application Pay required licensing fee of $128 and examination fee of $37 and apply for an insurance license online using the CDI's FLASH system Schedule and pass the California insurance licensing exam, proctored by PSI Services, LLC. A $30 examination fee is required by PSI A new California resident applicant who had a current Accident and Health license in another state within the last 90 days and has a current non-resident license in California is exempt from the 20-hour pre-licensing education requirement, but is still required to complete 12 hours of approved pre-licensing study on the California Insurance Code (CIC) and ethics
Non-Resident Agent Licensing Requirements
A certificate from the insurance regulatory authority of the nonresident's home state may be accepted as evidence of the applicant's license status and the capacity or capacities in which he or she is licensed A nonresident producer who moves from one state to another state or a resident producer who moves from this state to another state shall file a change of address and provide certification from the new resident state within 30 days of the change of legal residence. No fee or license application is required The license authority granted to the nonresident shall not exceed the class or classes of insurance granted by the license issued under the laws of the state, territory of the United States, or province of Canada where the resident license is maintained
Agent (Producer) Responsibilities
A producer cannot place any insurance or receive compensation for transacting insurance beyond the scope of the producer's license. Every licensee and every applicant for a license shall immediately notify the commissioner using an electronic service approved by the commissioner of any change in his or her e-mail, residence, principal business, or mailing address. Every licensee in California shall prominently affix, type, or cause to be printed on business cards, written price quotations for insurance products, and print advertisements distributed exclusively in this state for insurance products its license number in type the same size as any indicated telephone number, address, or fax number. If the licensee maintains more than one organization license, one of the organization license numbers is sufficient for compliance. A licensee may at any time surrender for cancellation any license under which he is permitted to act in any of the capacities specified in the CIC. If the license is in the possession of the licensee, surrender may be accomplished by the delivery of the document itself to the commissioner. If the license is in the possession of the insurer or the licensee's employer, the licensee may nevertheless make such surrender by written notice thereof delivered to the commissioner. All licenses issued to natural persons terminate upon the death of such person. An organization ceases to exist as an entity eligible to hold a license upon dissolution of a co-partnership or upon any change in membership of a co-partnership, as well as upon the termination of an association or corporation.
Agent Responsibilities as the Field Underwriter
An insurance agent does not underwrite an insurance application, nor can an agent guarantee or 'bind' coverage between the insurance company and an applicant; however, it is the agent's responsibility to review the application for insurance with the applicant, explain the underwriting process, and provide the applicant with the potential premium estimate, based on the applicant's health background information. The application must be completed accurately and truthfully to the best of the agent's ability In addition to the application, an insurer might request an 'agent's report' which includes any immediate observations by the agent regarding an applicant's background, demeanor and character. An insurance agent must also state on the application if the applicant is replacing an existing policy with a new policy and whether it is being replaced by the same insurer or through a different insurer.
Managing General Agent
Has a written management contract and an appointment on file with the commissioner which appointment is then in force, with one or more admitted insurers covering business transacted by the insurer in a substantial portion of the State of California Manages the transaction of either all or one or more of the classes of insurance written by those insurers in that territory or the transactions therein by those insurers under a specified fictitious underwriter's name Has the power to appoint, supervise, and terminate the appointment of local agents in that territory Has the power to accept or decline risks Collects premium moneys from producing agents and remits those moneys to those insurers pursuant to the account current system
Agents must know that insurers:
Must not make unfair distinctions between individuals in underwriting for the risk of human immunodeficiency virus (HIV) and acquired immune deficiency syndrome AIDS. May not unfairly discriminate on the basis of tests of a person's 'genetic characteristics
Insurance Solicitor
a natural person employed to aid a property and casualty broker-agent acting as an insurance agent or insurance broker in transacting insurance other than life, disability, or health.
Life Licensee Designations
a person authorized to act as a life agent on behalf of a life insurer or a disability insurer to transact life insurance and/or accident and health insurance. Life-Only (LO) Agents Accident and Health (AH) Agents Full-Life Agents
Life and Disability Insurance Analyst (LA)
a person who advises, purports to advise, or offers to advise any person insured under, named as beneficiary of, or having any interest in, a life or disability insurance contract, in any manner concerning that contract or his or her rights to such contract in exchange for a fee or compensation of any kind, paid by or derived from any person or source other than an insurer.
An agent
is appointed by the insurer to transact insurance on behalf of the insurer
