I.C · The Insurance Marketplace
The Unfair Practices Article (§790.03) and its penalties
The Unfair Practices Article is California's rulebook for honest selling and honest claims handling. Section 790.03 defines the unfair methods of competition and unfair or deceptive acts, and the Commissioner enforces it.
Practices listed in §790.03 include:
Misrepresenting policy terms or benefits, or an insurer's financial condition (§790.03(a)).
False advertising: untrue, deceptive or misleading statements in ads or public statements (§790.03(b)).
Boycott, coercion or intimidation that unreasonably restrains the insurance business (§790.03(c)).
Publishing a false financial statement of an insurer with intent to deceive (§790.03(d)).
Unfair discrimination between people of the same class (§790.03(f)).
Sixteen unfair claims settlement practices (§790.03(h)), covered on the fair claims page.
Penalties (§790.035): a civil penalty of up to $5,000 for each act, or up to $10,000 for each act if the act was willful. The Commissioner has discretion to decide what counts as an "act."
If the Commissioner issues a final cease and desist order and the person violates it, the penalty is up to $5,000 per act, or up to $55,000 if willful, on top of the underlying penalty (§790.07).
Remember
· Unfair practice: up to $5,000 per act; $10,000 per act if willful (§790.035).
· Violating a final cease and desist order: up to $5,000, or $55,000 if willful (§790.07).
· The sixteen unfair claims practices sit in §790.03(h).
CA
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