Denial of license application without a hearing:  The commissioner may deny an application for a license without conducting a hearing for any of the following reasons: (CIC 1669)

 

1. The applicant has been convicted of a felony.
2. The applicant has been convicted of a misdemeanor denounced by any insurance law.
3. The applicant has had a previous application denied for cause within the last five (5) years.
4. The applicant has had a license suspended or revoked for cause within the last five (5) years.

 

License revocation or suspension:  The commissioner may suspend or revoke a permanent license for any of the same grounds for which a license application may be denied.  As noted above, some grounds require a hearing while others do not. (CIC 1738)

 

Title 18 United State Code Sections 1033-1034:  According to Section 1033 it is a criminal offense for an individual who has been convicted of a felony involving dishonesty or breach of trust to willfully engage or participate in the business of insurance unless that person has first obtained the written consent of the appropriate regulatory official.  Furthermore, it is a criminal offense for any person to willfully employ or willfully permit such prohibited persons to participate in the business of insurance without the required written consent. 

 

            The California Department of Insurance has jurisdiction under this act to consider requests for written consent filed by prohibited persons who propose to participate in the business of insurance in California with a domestic insurer or a resident licensee.  Such prohibited persons who propose to engage in the business of insurance in California shall:

q  File a 1033 consent waiver application

q  Pay the application fee

q  Provide all required documentation

q  Receive written consent before engaging in such business    

 

Disability insurance—dual authority:  A person licensed as either a property and casualty agent/broker or as an accident and health agent may be authorized to transact disability insurance for an admitted insurer by filing a notice of appointment from that insurer. (CIC 1673)

 

Implied declarations with appointment: (CIC 1705)

 

1. When an insurer or licensed property and casualty broker/agent files an appointment for an agent or solicitor applying for an original license, the insurer or broker/agent is declaring that the applicant is of good reputation and is worthy of the license sought.
2. If an applicant will not be issued a certificate of convenience pending examination, the insurer or broker/agent who files the appointment is declaring that the applicant has had the required experience or instruction in the classes of insurance for which the license is sought or that he/she will be given the necessary instruction within 30 days after the license is issued.
3. If the applicant is a co-partnership, corporation, or association, the insurer making the appointment is deemed to have declared that the applicant is of good reputation and worthy of the license sought.  This applies to the business organization and to each individual authorized to exercise agency powers who is named in the application.  These implied declarations apply to any additional persons added to the license at a later date.

 

Termination of license: (CIC 1708-1714)

 

1.    A licensee may voluntarily surrender his license for cancellation at any time by delivering the license to the commissioner.  If the license is in the possession of the insurer or the licensee’s employer, the license may be surrendered by providing written notice to the commissioner of the licensee’s desire to cancel.

2.    All licenses issued to a natural person terminate when the person dies.

3.    An organization ceases to exist as an entity eligible to hold a license upon the following:

a.  A co-partnership dissolves or there is a change in membership.

             b.  An association terminates.    

            c.  A corporation is dissolved.

4.    A co-partnership may continue to transact business under its license if:

a.  The surviving partnership files an application within 30 days registering     

                 the change in membership, pays the required fee, and furnishes the

                 required bond (if acting as a broker).

            b.  At least one partner from the predecessor partnership continues to

                 exercise the powers of agency or brokership with the new partnership.

            c.  The application is signed by a general partner.

Note: To return the old license to the commissioner with signatures of    the original members is not a requirement.

5.    When a licensed entity terminates, its right to transact insurance also terminates.  However, a natural person, partnership, association, or corporation may continue to operate under an existing license as a different organization if:                  

a.  A natural person is named to exercise the agency or brokerage 

powers.                        

            b. There has been no substantial change in ownership or control of the        

                 licensed insurance business.

c.     Within 30 days after the change, the person or successor partnership, 

association or corporation files a license application and pays necessary fees.

6.   The license of an organization licensed as a life-only agent, accident and            health agent, property and casualty broker/agent, or personal lines broker/agent  becomes inoperative when the last natural person named       

on the license is removed or is no longer eligible to be licensed.  The    license will not be reactivated unless all deficiencies are corrected, including the addition of a natural person to transact insurance             under the organization’s license.