Independent agent = many insurers; captive agent = one insurer or group, which usually owns the records.

Broker = represents the client.

Direct response and online direct sales: the consumer buys from the insurer with no field agent.

Agent (§31) = on behalf of the insurer; broker (§33) = with, but not on behalf of, the insurer.

§1623: bond + signed disclosure = presumed broker, rebutted by an appointment for that class.

What the agent knows and should report is generally charged to the insurer (Civ. Code §2332).

Express = written in the contract; implied = needed to carry it out; apparent = created by the principal's conduct.

Civ. Code §2317: ostensible (apparent) authority comes from what the principal causes or allows a third person to believe.

Field underwriting: report what you see accurately; the underwriter decides.

Property license (§1625(b)) = direct or consequential loss to property, including business income.

Casualty license (§1625(c)) = legal liability coverage.

Personal lines (§1625.5) = personal risks only; no commercial liability.

Agent acts for an insurer; a solicitor only aids the broker-agent who employs him.

The insurer appoints its agent; the agent or broker appoints the solicitor (§1704(a)).

Surplus line broker applicant: $50,000 bond to the people of California (§1765(c)).

Transact (§35) = solicit, negotiate, execute, and handle matters after execution.

Servicing a policy is transacting, so it needs a license (§1631).

§1633: misdemeanor, up to $50,000 fine and/or up to 1 year in county jail.

§1033(e): a dishonesty or breach-of-trust felon may work in insurance only with a regulator's written consent citing (e).

Criminal: fine and/or up to 5 years for violating (e).

Civil (§1034): up to $50,000 per violation or the compensation, whichever is greater.

E&O = professional liability for a producer's negligent act, error or omission.

Not E&O: lobby slip-and-fall, damage to the agency's own property, deliberate dishonesty.

Claims-made: coverage (or an extended reporting period) must be in force when the claim is made.

§703: aiding a nonadmitted insurer (unless a surplus line broker) = misdemeanor + $500 + $100 per month or fraction.

A partial month counts as a full month: 2 months 10 days = $800.

§777.1: no free insurance as an inducement; incidental-to-services exception caps cost at $1 a year per purchaser.

Name: "Insurance" + a definitive word (Agency, Services); never "Insurance" last; no "Federal" or "Trust".

Address change: immediately (§1729). Background change such as a conviction: in writing within 30 days (§1729.2).

§1720: file the renewal on or before expiration to keep operating up to 60 days (or until told it is deficient).

§1725.5 fines: $200 / $500 / $1,000; not multiplied per printed piece.

§1726(a) website: name, domicile and principal place of business, CA license number, the word "insurance".

§1738: a permanent license may be suspended or revoked on any ground for denying an application.

§1669 ground (e.g., felony): suspension may be without notice or hearing; other grounds need notice and a hearing.

Appointment authority is effective the date the notice is signed (§1704(a)).

Inactive license: no transacting at all, not even servicing; reactivate with a new appointment.

Dissolved partnership continuing as a new entity: file the application and fees within 30 days (§1712).

Premium and return premium are fiduciary funds; personal use is theft (§1733).

Trust account: separate, FDIC-insured, bank or S&L in any state, at least the net amount owed (§1734).

Allowed commingling: advance premiums, return-commission reserves, contingencies. Not rent.

P&C CE (§1749.3): 24 hours per renewal, including a 3-hour ethics course with 1 hour on fraud.

Property + casualty together is still one 24-hour minimum.

§1730.5 (personal lines): give the effective date, or the circumstances if there are conditions precedent.

Customer first; recommend what meets the need, even at a lower commission.

The Code and regulations are not a complete guide to ethics; lawful can still be unethical.

§785: everyone in the transaction owes a prospect aged 65+ honesty, good faith and fair dealing.

Pretext = false identity, false purpose, or refusing to identify yourself (§791.02).

Only exception: a claim investigation with a reasonable basis to suspect crime, fraud or material misrepresentation (§791.03).

Never with a privileged source (physician, attorney); never for underwriting.

Admitted = entitled to transact here; nonadmitted = not entitled.

Domestic = California-organized; foreign = not California-organized; alien = organized outside the U.S.

Nonadmitted insurer fails: no California guarantee fund pays.

Stock = stockholders own it; mutual = policyholders own it.

Demutualization: mutual becomes stock (§11535).

RRG: liability only, regulated by its chartering state, no guaranty fund (policy must say so).

Actuarial calculates rates; underwriting selects and classifies risks.

Market conduct = how insurers treat the public (underwriting, sales, rates, claims).

§703: misdemeanor plus $500 + $100 per month or fraction of a month.

McCarran-Ferguson: insurance is regulated mainly by the states.

Code = statute (Legislature or initiative); Title 10 = Commissioner's regulations.

Commissioner: elected, at most two four-year terms.

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).

CalFIPA: outsiders need explicit prior consent on a separate signed, dated form.

Affiliates: annual notice with a chance to opt out.

IIPPA adverse decision: 90 business days to ask, 21 business days to answer.

HIPAA does not reach auto liability: liability insurance is an excepted benefit.

Initial privacy notice: no later than when the customer relationship begins.

CCPA = right to delete; Shine the Light = who got my data for direct marketing last year.

Insolvent = impaired required paid-in capital OR can't pay obligations when due.

Covering liabilities and reinsurance is not enough: required capital must remain on top.

Conservation: Commissioner may act without notice; refusing a seizure order = misdemeanor ($1,000 / 1 year).

CIGA protects policyholders of insolvent admitted P&C insurers.

Cap: $500,000 per claim (workers' comp excepted); up to $1,000,000 for residential dwelling claims.

Not covered: life, health, title, surety; nonadmitted insurers and RRGs.

Red flags suggest fraud; they do not prove it.

Signing a false claim under penalty of perjury can be perjury (Penal Code §118).

Agent: report facts, don't accuse; reports without malice are protected (§1872.5).

§§679.70–679.74: admitted insurers, residential property and personal liability only.

No Civil Code §51 characteristic (e.g., national origin) on the application or as a rating factor by itself.

California = prior approval; deemed approved 60 days after public notice unless a hearing applies.

Rates may not be excessive, inadequate or unfairly discriminatory.

"Shall" = must; "may" = permitted. Mailer's affidavit = prima facie proof of mailing.

§790.03(h): sixteen unfair claims practices (knowingly, or as a general business practice).

Proof of claim includes evidence the insurer gathered itself.

Claim files: current year + 4 preceding years, open and closed.

15 days to acknowledge, 40 days to accept or deny, 30 days to pay (calendar days).

More time needed: written notice within 40 days, then every 30 days.

Mismatch: replace all items in the damaged area for a reasonably uniform look.

Surplus lines = nonadmitted insurers for risks the admitted market won't write.

Diligent search: 3 admitted declinations, or fewer than 3 write the line.

Broker reports the placement within 60 days; not just to get a lower rate.

Nonadmitted insurers for a home state insured: only through a licensed surplus line broker.

No binding authority without written authority, advice of coverage, or an issued policy (§1764.2).

LASLI = California's approved list; IID List = NAIC's quarterly alien insurer list.