Browse all questions

Section 790.03(b) of the Insurance Code prohibits making, publishing, or circulating any false or maliciously critical statement about an insurer that is intended to injure the company. That conduct is defamation of an insurer. Twisting involves misrepresentations made to induce a replacement; rebating is sharing commission with the insured; boycott/intimidation requires concerted action restraining trade.

Title 10 CCR §2695.5(b) requires the insurer to acknowledge receipt of a claim within 15 calendar days. The 40-day rule is for accepting or denying the claim, and 30 days is the deadline for issuing payment after agreement is reached.

Title 10 CCR §2695.7(b) requires the insurer to accept or deny a claim, in whole or in part, within 40 calendar days after receiving proof of claim. The deadline may be extended only for reasons beyond the insurer's control with written notice every 30 days thereafter.

Title 10 CCR §2695.7(h) requires that, no later than 30 calendar days from the date the parties agree in writing on the amount of the claim, the insurer must tender payment. Failure to do so may trigger 10% statutory interest under Civil Code §3287.

Insurance Code §1749.3 requires 24 hours of continuing education per two-year license term, of which at least 3 hours must be on ethics. New licensees in their first four years have heavier requirements; this rule covers the standard renewal cycle.

Insurance Code §1733 provides that all funds received by a licensee acting as an agent or broker on account of any insurance transaction are received and held in a fiduciary capacity. The licensee must remit them to the insurer, insured, or other person entitled to them and may not divert them to personal use.

Section 1668 lists 14 grounds for license denial, including dishonesty, fraud, material misstatement, and lack of integrity. Lawful union membership is not among the statutory grounds; the Commissioner may not deny a license based on protected associational activity.

Insurance Code §1631 prohibits any person from soliciting, negotiating, or effecting insurance contracts in California without a license. Quoting premiums and binding coverage are core licensed activities; after-the-fact review by a broker does not cure the violation.

Insurance Code §31 defines an insurance agent as a person authorized to transact insurance on behalf of an insurer (representing the insurer). Section 33 defines a broker as a person who, for compensation, transacts insurance on behalf of another (representing the insured). The fiduciary relationship therefore differs in important ways.

Insurance Code §286 provides that an interest in property insured 'must exist when the insurance takes effect, and when the loss occurs, but need not exist in the meantime.' Both ends are required and a gap in between does not defeat the policy, but the requirement that decides whether a claim is PAYABLE is the one at the time of loss: a homeowner who sold the property the day before the fire has no interest at the moment of loss and cannot collect. (b) is wrong because interest at inception alone is not enough; (c) is wrong because interest running through the term but absent at the loss is exactly what §286 refuses; and (d) is wrong because §286 requires an insurable interest in property insurance. Contrast life insurance, which the same section treats the opposite way — the interest must exist when the insurance takes effect but need not exist when the loss occurs.

§663(a)(2): at least 30 days, with the §666 statement telling the insured how to request the reason. There is no 60-day ceiling — the statute sets a floor only. §678 is the residential property section and does not reach auto at all; §662's 20 and 10 days are cancellation, and §663(a)(1)'s 20 days is the deadline to OFFER renewal rather than to decline it.

Insurance Code §675.1 imposes a one-year moratorium on cancellation and non-renewal of residential property policies in ZIP codes adjacent to or within the perimeter of a declared wildfire disaster. The moratorium runs from the date of the Governor's emergency declaration.

Insurance Code §10086 (with §10081) requires every insurer writing residential property insurance to offer earthquake coverage at policy issuance and again at each renewal. The insured may decline the offer in writing; earthquake coverage is not automatic and is typically written through the California Earthquake Authority.

Section 1861.05, enacted by Proposition 103 in 1988, makes California a prior-approval state for property and casualty rates, including personal auto and homeowners. The rate must be neither excessive, inadequate, nor unfairly discriminatory, and the Commissioner must approve it before use.

Civil Code §3287 entitles a claimant to prejudgment interest at the legal rate (10% per annum on noncontract obligations) once the amount due is fixed and certain. For an undisputed claim amount, interest accrues from the date the obligation became liquidated. This is in addition to any bad-faith remedies.

Insurance Code §11580(b)(2) authorizes a direct action against an insurer when a judgment in favor of the injured person against the insured remains unsatisfied for at least 30 days after service of notice of entry of judgment. The provision must be included in every California liability policy.

Insurance Code §758.5 prohibits steering and requires that when an insurer suggests a particular repair shop, it must inform the claimant in writing (and orally when face-to-face or by phone) that the claimant is not required to use that shop and may select any licensed shop of their choice.

Insurance Code §1871.4 makes it unlawful to knowingly present any false or fraudulent claim for the payment of a loss; the offense is a wobbler punishable by imprisonment in state prison for two, three, or five years, or by a fine, or both. There is no minimum dollar threshold.

Insurance Code §1875.20 et seq. requires admitted insurers writing private passenger auto and certain other lines to establish a Special Investigative Unit (SIU) to investigate suspected fraudulent claims and refer them to the Department of Insurance Fraud Division and law enforcement.

Insurance Code §1879.5 grants insurers, their employees, and authorized agents immunity from civil liability for furnishing information about suspected insurance fraud to the Department of Insurance or law enforcement, provided the disclosure is made in good faith and without fraudulent intent or actual malice.

Sections 791.02 and 791.04 require an insurance institution that collects personal information from sources other than the applicant to provide a written notice of its information practices, including the type of information collected, sources, uses, and the applicant's rights of access and correction.

Under Insurance Code §12900 and following, the California Insurance Commissioner is elected by statewide vote for a four-year term and is limited to two terms. The Commissioner heads the California Department of Insurance and exercises broad regulatory and enforcement authority over insurers and producers.

Under the Knox-Keene Act (Health & Safety Code §1340 et seq.), HMOs and other health-care service plans are regulated by the Department of Managed Health Care (DMHC), a separate agency from the California Department of Insurance, which regulates traditional indemnity insurers. Personal lines producers should know the distinction even though it falls outside their direct scope.

Section 790.03(h)(1) prohibits misrepresenting to claimants pertinent facts or insurance policy provisions relating to coverages at issue. The other listed activities are normal, lawful claim-handling steps. The 16 enumerated acts in §790.03(h) form the backbone of California unfair-claims-practices law.

Title 10 CCR §2695.3 requires every licensee's claim files to contain all documents, notes, and work papers (including communications) which reasonably pertain to the claim, in such detail that pertinent events and the dates of such events can be reconstructed. The retention period is at least five years (or longer where required by law).

Section 790.03(h)(5) defines as an unfair claims practice 'not attempting in good faith to effectuate prompt, fair, and equitable settlements of claims in which liability has become reasonably clear' and the related duty under (h)(2)/(3) to acknowledge and act reasonably promptly on communications. Months of silence without justification violate the statute. The Fair Claims Settlement Practices Regulations (10 CCR §2695.5(e)) require acknowledgment within 15 calendar days, and no statute gives an insurer a six-month investigation window.

Section 790.03(h)(13) treats as unfair the act of failing to provide promptly a reasonable explanation of the basis relied on in the insurance policy, in relation to the facts or applicable law, for the denial of a claim or for the offer of a compromise settlement. Citing an inapplicable provision is exactly the kind of pretextual denial the statute targets.

Effective January 1, 2026, AB 943 repealed California's per-line pre-licensing hour requirements for personal lines (and Life, Accident & Health, Property, and Casualty). The only pre-licensing education still required before the license is issued is the 12-hour Ethics and California Insurance Code course from a CDI-approved provider. Continuing education (24 hours per 2-year renewal, including 3 ethics hours) is separate and still applies.