2007 California Insurance Code Article 6. License Qualifications

CA Codes (ins:1666-1673)

1666.  Upon the filing of an application for a license in accordance
with Article 4 of this chapter, the commissioner may make such
investigation and require the filing of such supplementary documents,
affidavits and statements as may be necessary to obtain a full
disclosure of such information as will aid him in determining whether
the prerequisites for the license have been met.  If the applicant
makes a showing satisfactory to the commissioner that he meets all
such prerequisites, the commissioner, if the applicant be eligible
therefor, may issue a certificate of convenience, and upon the
applicant meeting any applicable examination requirements may issue a
permanent license.



1666.5.  (a) Notwithstanding any other provision of law, the
commissioner shall at the time of issuance or renewal of any license
under this chapter or Chapter 6 (commencing with Section 1760),
Chapter 7 (commencing with Section 1800), or Chapter 8 (commencing
with Section 1831) require that any licensee provide its federal
employer identification number if the licensee is a partnership or
his or her social security number for all others.
   (b) Any licensee failing to provide the federal identification
number or social security number shall be reported by the
commissioner to the Franchise Tax Board and, if failing to provide
after notification pursuant to paragraph (1) of subdivision (b) of
Section 19528 of the Revenue and Taxation Code, shall be subject to
the penalty provided in paragraph (2) of subdivision (b) of Section
19528 of the Revenue and Taxation Code.
   (c) The commissioner shall, upon request of the Franchise Tax
Board, furnish to the board all of the following information with
respect to every licensee:
   (1) Licensee's name.
   (2) Address or addresses of record.
   (3) Federal employer identification number if the entity is a
partnership or owner's name and social security number for all
others.
   (4) Type of license.
   (5) Effective date of license or a renewal.
   (6) Expiration date of license.
   (7) Whether license is active or inactive, if known.
   (8) Whether license is new or a renewal.
   (d) For the purposes of this section:
   (1) "Licensee" means any entity, other than a corporation,
authorized by a license, certificate, registration, or other means to
engage in the insurance business regulated by this code.
   (2) "License" includes a certificate, registration, or any other
authorization needed to engage in the insurance business regulated by
this code.
   (e) The reports required under this section shall be filed on
magnetic media or in other machine-readable form, according to
standards furnished by the Franchise Tax Board.
   (f) The commissioner shall begin providing to the Franchise Tax
Board the information required by this section as soon as
economically feasible, but no later than July 1, 1987.  The
information shall be furnished at a time that the Franchise Tax Board
may require.
   (g) Notwithstanding Chapter 3.5 (commencing with Section 6250) of
Division 7 of Title 1 of the Government Code, the information
furnished pursuant to this section shall not be deemed to be a public
record and shall not be open to the public for inspection.
   (h) Any deputy, agent, clerk, officer, or employee of the
commissioner, or any former officer or employee or other individual
who in the course of his or her employment or duty has or has had
access to the information required to be furnished under this
section, shall not disclose or make known in any manner that
information, except as provided in this section to the Franchise Tax
Board.
   (i) It is the intent of the Legislature in enacting this section
to utilize the social security account number or federal employer
identification number for the purpose of establishing the
identification of persons affected by state tax laws and, to that
end, the information furnished pursuant to this section shall be used
exclusively for tax enforcement purposes.



1667.  Except as provided in Section 1669, a license shall not be
denied without an opportunity to the applicant to be heard in support
of his application.  When a hearing is held, the proceedings shall
be conducted in accordance with Chapter 5 of Part 1 of Division 3 of
Title 2 of the Government Code.


1668.  The commissioner may deny an application for any license
issued pursuant to this chapter if:
   (a) The applicant is not properly qualified to perform the duties
of a person holding the license applied for;
   (b) The granting of the license will be against public interest;
   (c) The applicant does not intend actively and in good faith to
carry on as a business with the general public the transactions which
would be permitted by the issuance of the license applied for;
   (d) The applicant is not of good business reputation;
   (e) The applicant is lacking in integrity;
   (f) The applicant has been refused a professional, occupational or
vocational license or had such a license suspended or revoked by any
licensing authority for reasons that should preclude the granting of
the license applied for;
   (g) The applicant seeks the license for the purpose of avoiding or
preventing the operation or enforcement of the insurance laws of
this state;
   (h) The applicant has knowingly or willfully made a misstatement
in an application to the commissioner for a license, or in a document
filed in support of such an application, or has made a false
statement in testimony given under oath before the commissioner or
any other person acting in his stead;
   (i) The applicant has previously engaged in a fraudulent practice
or act or has conducted any business in a dishonest manner;
   (j) The applicant has shown incompetency or untrustworthiness in
the conduct of any business, or has by commission of a wrongful act
or practice in the course of any business exposed the public or those
dealing with him to the danger of loss;
   (k) The applicant has knowingly misrepresented the terms or effect
of an insurance policy or contract;
   (l) The applicant has failed to perform a duty expressly enjoined
upon him by a provision of this code or has committed an act
expressly forbidden by such a provision;
   (m) The applicant has been convicted of:
   (1) A felony;
   (2) A misdemeanor denounced by this code or other laws regulating
insurance; or
   (3) A public offense having as one of its necessary elements a
fraudulent act or an act of dishonesty in acceptance, custody or
payment of money or property;
   (n) The applicant has aided or abetted any person in an act or
omission which would constitute grounds for the suspension,
revocation or refusal of a license or certificate issued under this
code to the person aided or abetted;
   (o) The applicant has permitted any person in his employ to
violate any provision of this code; or
   (p) The applicant has violated any provision of law relating to
conduct of business which could lawfully be done only under authority
conferred by such license.
   (q) The applicant has submitted to the commissioner a false or
fraudulent certificate pursuant to subdivision (d) of Section 1749.5.

   A judgment, plea or verdict of guilty or a conviction following a
plea of nolo contendere is deemed to be a conviction within the
meaning of this section.



1668.1.  In addition to the grounds set forth in Section 1668, the
following acts shall constitute cause to suspend or revoke any
permanent license issued pursuant to this chapter:
   (a) The licensee has induced a client, whether directly or
indirectly, to cosign or make a loan, make an investment, make a
gift, including a testamentary gift, or provide any future benefit
through a right of survivorship to the licensee, or to any of the
persons listed in subdivision (e).
   (b) The licensee has induced a client, whether directly or
indirectly, to make the licensee or any of the persons listed in
subdivision (e) a beneficiary under the terms of any intervivos or
testamentary trust or the owner or beneficiary of a life insurance
policy or an annuity policy.
   (c) The licensee has induced a client, whether directly or
indirectly, to make the licensee, or a person who is registered as a
domestic partner of the licensee, or is related to the licensee by
birth, marriage, or adoption, a trustee under the terms of any
intervivos or testamentary trust.  However, if the licensee is also
licensed as an attorney in any state, the licensee may be made a
trustee under the terms of any intervivos or testamentary trust,
provided that the licensee is not a seller of insurance to the
trustor of the trust.
   (d) The licensee, who has a power of attorney for a client has
sold to the client or has used the power of attorney to purchase an
insurance product on behalf of the client for which the licensee has
received a commission.
   (e) Subdivisions (a) and (b) shall also apply if the licensee
induces the client to provide the benefits in those subdivisions to
the following people:
   (1) A person who is related to the licensee by birth, marriage, or
adoption.
   (2) A person who is a friend or business acquaintance of the
licensee.
   (3) A person who is registered as a domestic partner of the
licensee.
   (f) This section shall not apply to situations in which the client
is:
   (1) A person related to the licensee by birth, marriage, or
adoption.
   (2) A person who is registered as a domestic partner of the
licensee.



1668.5.  (a) The commissioner may deny an application for any
license issued pursuant to this chapter, and may suspend or revoke
the permanent license of any organization licensed pursuant to this
chapter as authorized by Section 1738, if the applicant or holder of
the permanent license is an organization and a controlling person of
the organization is any of the following:
   (1) The controlling person has previously engaged in a fraudulent
practice or act or has conducted any business in a dishonest manner.

   (2) The controlling person has shown incompetency or
untrustworthiness in the conduct of any business, or has by
commission of a wrongful act or practice in the course of any
business exposed the public or those dealing with him or her to the
danger of loss.
   (3) The controlling person has knowingly misrepresented the terms
or effect of an insurance policy or contract.
   (4) The controlling person has failed to perform a duty expressly
enjoined upon him or her by a provision of this code or has committed
an act expressly forbidden by a provision of this code.
   (5) The controlling person has been convicted of any of the
following:
   (A) A felony.
   (B) A misdemeanor denounced by this code or other laws regulating
insurance.
   (C) A public offense having as one of its necessary elements a
fraudulent act or an act of dishonesty in acceptance, custody, or
payment of money or property.
   A judgment, plea, or verdict of guilty or a conviction following a
plea of nolo contendere is deemed to be a conviction within the
meaning of this section.
   (6) The controlling person has aided or abetted any person in an
act or omission that would constitute grounds for the suspension,
revocation, or refusal of a license or certificate issued under this
code to the person aided or abetted.
   (7) The controlling person has permitted any person in his or her
employ to violate any provision of this code.
   (8) The controlling person has violated any provision of law
relating to conduct of business that could lawfully be done only
under authority conferred by a license under this chapter.
   (b) As used in this section, "controlling person" means a person
who possesses, directly or indirectly, the power to direct or cause
the direction of the management and policies of the organization,
whether through the ownership of voting securities, by contract other
than a commercial contract for goods or nonmanagement services, or
otherwise, including, but not limited to, power that is the result of
an official position with or corporate office held by the person.
Control shall be presumed to exist if any person, directly or
indirectly, owns, controls, holds with the power to vote, or holds
proxies representing, more than 10 percent of the voting securities
of the organization.  This presumption may be rebutted by a showing
that control does not exist in fact.  The commissioner may, after
furnishing all persons in interest notice and opportunity to be
heard, determine that control exists in fact, notwithstanding the
absence of a presumption to that effect.



1669.  The commissioner may, without hearing, deny an application if
the applicant has:
   (a) Committed a felony as shown by a plea of guilty or nolo
contendere, or by a final judgment of conviction thereof;
   (b) Committed a misdemeanor denounced by this code or by other
laws regulating insurance as shown by a plea of guilty or nolo
contendere, or by a final judgment of conviction thereof;
   (c) Had a previous application for a professional, occupational,
or vocational license denied for cause by any licensing authority,
within five years of the date of the filing of the application to be
acted upon, on grounds that should preclude the granting of a license
by the commissioner under this chapter; or
   (d) Had a previously issued professional, occupational, or
vocational license suspended or revoked for cause by any licensing
authority, within five years of the date of the filing of the
application to be acted upon, on grounds that should preclude the
granting of a license by the commissioner under this chapter.
   In the event the commissioner issues an order based on a plea that
does not at any time result in a judgment of conviction, the
commissioner shall vacate the order upon petition by the applicant.



1670.  If an applicant for any license under this chapter, within
one year from the date of the receipt by the commissioner of the
application, whether or not the filing is complete, or within one
year from the date of the issuance to him of a certificate of
convenience, if any, whichever is the later date, neither fully
qualifies for and receives such license on a permanent basis, nor is
denied its issue, such application is automatically denied without
prejudice to the filing of a new application for such license unless
in a proceeding under a statement of issues the commissioner for good
cause determines such denial should be set aside or stayed.  Nothing
in this section shall nullify Section 1695 to extend the expiration
date of a certificate of convenience.



1672.  The commissioner may deny an application filed by an
organization, unless both the organization and all natural persons
named thereon meet the qualifications for the license for which such
application is filed, but the qualifying examination shall be
administered only to natural persons.  In case the application is for
more than one natural person to be named thereon and at least one,
but not all, of such persons satisfy the examination requirement, the
commissioner may issue such license omitting therefrom the names of
the person or persons who fail to satisfy the examination
requirement.


1673.  A person licensed as a fire and casualty broker-agent or a
life licensee may be authorized to transact disability insurance on
behalf of any insurer which is authorized to transact disability
insurance by the filing of a notice of appointment for that purpose.
The authority to transact disability insurance given by an insurer to
a person acting as an agent by appointment shall be effective as of
the date the notice of appointment is signed by the insurer. That
authority to transact shall apply to transactions occurring after
that date and for the purpose of determining the insurer's liability
for acts of appointed agents. The commissioner shall prescribe the
forms of the notice of appointment.