12919-12938
INSURANCE CODE
SECTION 12919-12938
12919. Communications to the commissioner or any person in his
office in respect to any fact concerning the holder of, or applicant
for, any certificate or license issued under this code are made to
him in official confidence within the meaning of Sections 1040 and
1041 of the Evidence Code. Liability shall not exist and no action or
proceeding shall lie for or on account of any such communication or
the making thereof, but the existence of such communication shall not
be deemed to dispense with or nullify any requirement of notice,
hearing or production of evidence before the commissioner as
otherwise required by law.
12920. The commissioner shall determine the sufficiency and
validity of all securities required to be given by persons engaged,
or to be engaged, in insurance business, and shall cause such
security to be supplemented or renewed in case of the insufficiency
or invalidity thereof.
12920.5. In addition to and independent of any and all other proper
causes for refusal by the commissioner to approve or accept any bond
filed or presented for filing with him under any provision of this
code or other laws, the commissioner shall decline to approve, accept
or file any such bond, if in his opinion, the principal and the
surety are affiliated in any manner whereby insolvency of the one
party would affect the solvency of the other or whereby it is made
uncertain whether or not such result might occur.
12921. (a) The commissioner shall perform all duties imposed upon
him or her by the provisions of this code and other laws regulating
the business of insurance in this state, and shall enforce the
execution of those provisions and laws.
(b) In an administrative action to enforce the provisions of this
code and other laws regulating the business of insurance in this
state, any settlement is subject to all of the following:
(1) The commissioner may delegate the power to negotiate the terms
and conditions of a settlement but the commissioner may not delegate
the power to approve the settlement.
(2) Unless specifically provided for in a provision of this code,
the commissioner may not agree to any of the following:
(A) That the respondent contribute, deposit, or transfer any
moneys or other resources to a nonprofit entity.
(B) That a respondent contribute, deposit, or transfer any fine,
penalty, assessment, cost, or fee except to the commissioner for
deposit in the appropriate state fund pursuant to Section 12975.7.
(C) That the commissioner may or shall direct the transfer,
distribution, or payment to another person or entity of any fine,
penalty, assessment, cost, or fee.
(D) The use of the commissioner's name, likeness, or voice in any
printed material or audio or visual medium, either for general
distribution or for distribution to specific recipients.
(3) The commissioner may only agree to payment to those persons or
entities to whom payment may be due because of the respondent's
violation of a provision of this code or other law regulating the
business of insurance in this state.
(4) A settlement may only include the sanctions provided by this
code or other laws regulating the business of insurance in this
state, except that the settlement may include attorney's fees, costs
of the department in bringing the enforcement action, and future
costs of the department to ensure compliance with the settlement
agreement.
(c) Notwithstanding any other provision of law, the commissioner
may accept documents submitted for filing or approval, process
transactions, and maintain records in electronic form or as paper
documents, and may adopt regulations to further this subdivision.
12921.1. (a) The commissioner shall establish a program on or
before July 1, 1991, to investigate complaints and respond to
inquiries received pursuant to Section 12921.3, to comply with
Section 12921.4, and, when warranted, to bring enforcement actions
against insurers or production agencies, as those terms are defined
in subdivision (a) of Section 1748.5. The program shall include, but
not be limited to, the following:
(1) A toll-free telephone number published in telephone books
throughout the state, dedicated to the handling of complaints and
inquiries.
(2) Public service announcements to inform consumers of the
toll-free telephone number and how to register a complaint or make an
inquiry to the department.
(3) A simple, standardized complaint form designed to assure that
complaints will be properly registered and tracked.
(4) Retention of records on complaints for at least three years
after the complaint has been closed.
(5) Guidelines to disseminate complaint and enforcement
information on individual insurers to the public, that shall include,
but not be limited to, the following:
(A) License status.
(B) Number and type of complaints closed within the last full
calendar year, with analogous statistics from the prior two years for
comparison. The proportion of those complaints determined by the
department to require that corrective action be taken against the
insurer, or leading to insurer compromise, or other remedy for the
complainant, as compared to those that are found to be without merit.
This information shall be disseminated in a fashion that will
facilitate identification of meritless complaints and discourage
their consideration by consumers and others interested in the records
of insurers.
(C) Number and type of violations found, by reference to the line
of insurance and the law violated. For the purposes of this
subparagraph, the department shall separately report this information
for health insurers.
(D) Number and type of enforcement actions taken.
(E) Ratio of complaints received to total policies in force, or
premium dollars paid in a given line, or both. Private passenger
automobile insurance ratios shall be calculated as the number of
complaints received to total car years earned in the period studied.
(F) Any other information the department deems is appropriate
public information regarding the complaint record of the insurer that
will assist the public in selecting an insurer. However, nothing in
this section shall be construed to permit disclosure of information
or documents in the possession of the department to the extent that
the information and those documents are protected from disclosure
under any other provision of law.
(6) Procedures and average processing times for each step of
complaint mediation, investigation, and enforcement. These procedures
shall be consistent with those in Article 6.5 (commencing with
Section 790) of Chapter 1 of Part 2 of Division 1 for complaints
within the purview of that article, consistent with those in Article
7 (commencing with Section 1858) of Chapter 9 of Part 2 of Division 1
for complaints within the purview of that article, and consistent
with any other provisions of law requiring certain procedures to be
followed by the department in investigating or prosecuting complaints
against insurers or production agencies.
(7) A list of criteria to determine which violations should be
pursued through enforcement action, and enforcement guidelines that
set forth appropriate penalties for violations based on the nature,
severity, and frequency of the violations.
(8) Referral of complaints not within the department's
jurisdiction to appropriate public and private agencies.
(9) Complaint handling goals that can be tested against surveys
carried out pursuant to subdivision (a) of Section 12921.4.
(10) Inclusion in its annual report to the Governor, required by
Section 12922, detailed information regarding the program required by
this section, that shall include, but not be limited to: a
description of the operation of the complaint handling process,
listing civil, criminal, and administrative actions taken pursuant to
complaints received; the percentage of the department's personnel
years devoted to the handling and resolution of complaints; and
suggestions for legislation to improve the complaint handling
apparatus and to increase the amount of enforcement action undertaken
by the department pursuant to complaints if further enforcement is
deemed necessary to ensure proper compliance by insurers or
production agencies with the law.
(b) The commissioner shall promulgate a regulation that sets forth
the criteria that the department shall apply to determine if a
complaint is deemed to be justified prior to the public release of a
complaint against a specifically named insurer or production agency.
(c) The commissioner shall provide to the insurer or production
agency a description of any complaint against the insurer or
production agency that the commissioner has received and has deemed
to be justified at least 30 days prior to public release of a report
summarizing the information required by this section. This
description shall include all of the following:
(1) The name of the complainant.
(2) The date the complaint was filed.
(3) A succinct description of the facts of the complaint.
(4) A statement of the department's rationale for determining that
the complaint was justified that applies the department's criteria
to the facts of the complaint.
(d) An insurer shall provide to the department the name, mailing
address, telephone number, and facsimile number of a person whom the
insurer designates as the recipient of all notices, correspondence,
and other contacts from the department concerning complaints
described in this section. The insurer may change the designation at
any time by providing written notice to the Consumer Services
Division of the department.
(e) For the purposes of this section, notices, correspondence, and
other contacts with the designated person shall be deemed contact
with the insurer.
12921.15. (a) On or before July 1, 1999, the commissioner shall
prepare a written report, to be made available by the department to
interested individuals upon written request, that details complaint
and enforcement information on individual insurers in accordance with
guidelines established under paragraph (5) of subdivision (a) of
Section 12921.1. The report shall be made available by mail through
the department's consumer toll-free telephone number and through the
department's Internet website and transmitted via electronic mail if
the individual has the ability to obtain the report in this manner.
No complaint information shall be included in the report required by
this section that has not been provided to the insurer in accordance
with subdivision (c) of Section 12921.1
(b) The commissioner may also, if deemed appropriate, publish the
record of complaints against the production agency that have been
determined by the department to be justified and that will assist the
public in selecting a production agency. No complaint data shall be
published that has not been provided to the production agency in
accordance with subdivision (c) of Section 12921.1.
12921.2. All public records of the department and the commissioner
subject to disclosure under Chapter 3.5 (commencing with Section
6250) of Division 7 of Title 1 of the Government Code shall be
available for inspection and copying pursuant to those provisions at
the offices of the department in the City and County of San
Francisco, in the City of Los Angeles, and in the City of Sacramento.
Adequate copy facilities for this purpose shall be made available.
Notwithstanding any other provision of law, a person requesting
copies of these records shall receive the copies from employees of
the department and the fee charged for the copies shall not exceed
the actual cost of producing the copies. Notwithstanding Section 6256
of the Government Code, any public record submitted to the
department as computer data on an electronic medium shall, in
addition to any other formats, be made available to the public
pursuant to this section through an electronic medium.
12921.3. (a) The commissioner, in person or through employees of
the department, shall receive complaints and inquiries, investigate
complaints, prosecute insurers or production agencies when
appropriate and according to guidelines determined pursuant to
Section 12921.1, and respond to complaints and inquiries by members
of the public concerning the handling of insurance claims, including,
but not limited to, violations of Article 10 (commencing with
Section 1861) of Chapter 9 of Part 2 of Division 1, by insurers or
production agencies, or alleged misconduct by insurers or production
agencies.
(b) The commissioner shall not decline to investigate complaints
for any of the following reasons:
(1) The insured is represented by an attorney in a dispute with an
insurer, or is in mediation or arbitration.
(2) The insured has a civil action against an insurer.
(3) The complaint is from an attorney, if the complaint is based
upon evidence or reasonable beliefs about violations of law known to
an attorney because of a civil action.
(c) The commissioner may defer the investigation until the
finality of a dispute, mediation, arbitration, or civil action
involving the claim is known.
(d) The commissioner, as he or she deems appropriate, and pursuant
to Section 12921.1, shall provide for the education of, and
dissemination of information to, members of the general public or
licensees of the department concerning insurance matters.
12921.4. (a) The commissioner shall, upon receipt of a written
complaint with respect to the handling of an insurance claim or other
obligation under a policy by an insurer or production agency, or
alleged misconduct by an insurer or production agency, notify the
complainant of the receipt of the complaint within 10 working days of
receipt. Thereafter, the commissioner shall notify the complainant
of the final action taken on his or her complaint within 30 days of
the final action.
The department shall include, with each notification of final
action, or, at a minimum, with a number of randomly selected
notifications of final action sufficient to assure the validity of
results, a complaint handling evaluation form. This form shall
clearly and concisely seek an evaluation of the department's
performance in handling the complainant's grievance. The areas of
evaluation shall include, but not be limited to: whether the
complaint was handled in a fair and reasonable manner, evaluated
thoroughly and without bias; the time required for resolution of the
complaint; whether the complaint was referred and, if so, whether it
was referred within a satisfactory time; whether the staff involved
in handling the complaint demonstrated an adequate knowledge of the
issues involved in the complaint; whether the complainant was
satisfied with the result of the department's intervention; and
whether the complainant would recommend the department's complaint
handling services to others.
The commissioner shall, if deemed appropriate, notify insurers or
production agencies against whom the complaint is made of the nature
of the complaint, may request appropriate relief for the complainant,
and may meet and confer with the complainant and the insurer in
order to mediate the complaint. This section shall not be construed
to give the commissioner power to adjudicate claims.
(b) The commissioner shall ascertain patterns of complaints by
insurer, geographic area, insurance line, type of violation, and any
other valid basis the commissioner may deem appropriate for further
investigation, and periodically evaluate the complaint patterns to
determine additional audit, investigative, or enforcement actions
which may be taken by the commissioner, and report on all actions
taken with respect to those patterns of complaints in his or her
annual report to the Governor pursuant to Section 12922, and to the
public. For the purposes of this subdivision, complaints mean those
written complaints received by the commissioner under subdivision
(a), and written complaints received by the commissioner from any
other sources, alleging misconduct or unlawful acts by insurers or
production agencies.
12921.5. The commissioner may in person or through employees of the
division meet with persons, organizations and associations
interested in insurance for the purpose of securing cooperation in
the enforcement of the insurance laws of this State and may
disseminate information concerning the insurance laws of this State
for the assistance and information of the public.
12921.6. (a) (1) If no fee is designated in this code for the
review of filings required to be made pursuant to this code, the
commissioner may establish a fee to permit the department to recover
the actual cost of review of those filings. The fee so established
shall not be increased by more than twenty-five dollars ($25), unless
the increase is made by law.
(2) If this code designates a fee for any required filing, which
fee the commissioner determines to be inadequate to cover the actual
cost of review, the commissioner may assess an additional fee
pursuant to this section not to exceed 25 percent of the fee
designated by the code for the filing.
(3) Any person assessed a fee under this section shall be
entitled, upon request, to receive reasonable substantiation from the
department for the fee assessed, based upon the cost records of the
department.
(4) As used in this section, "filings" means those items which the
insurers are required to file with the department or commissioner
pursuant to this code.
(b) The fee provided for by this section shall be assessed without
regard to the requirements of Section 12978 as to uniformity of
increase, but shall be based upon the actual cost to the department
for the review of the filing.
(c) As used in this section, "person" means any person or entity
subject to examination by the commissioner, or purporting to do
insurance business in this state, or in the process of organization
with intent to do insurance business in this state, or from whom the
commissioner's certificate of authority is required for the
transaction of business, or whose certificate of authority is revoked
or suspended.
12921.7. Notwithstanding any other provision of law, the following
shall apply to the adoption by the commissioner of any regulation as
an emergency regulation pursuant to subdivision (b) of Section
11346.1 of the Government Code.
(a) At least 5 working days prior to submission of the emergency
regulation to the Office of Administrative Law, the commissioner
shall mail a notice of proposed emergency action to every person,
group, or association who had previously filed a request for notice
of regulatory actions with the commissioner.
(b) The notice of proposed emergency action shall include the
following:
(1) A description of the problem and the necessity for the
regulation.
(2) A description of the justification for adoption of the
regulation as an emergency regulation.
(3) A copy of the text of the proposed emergency regulation.
12921.8. (a) The commissioner may do the following:
(1) Issue a cease and desist order to a person who has acted in a
capacity for which a license, registration, or certificate of
authority from the commissioner was required but not possessed.
(2) Issue a cease and desist order to a person who has aided or
abetted a person described in paragraph (1).
(3) Impose a monetary penalty, pursuant to an order to show cause,
on a person described in paragraph (1) or (2). The monetary penalty
shall be the greater of the following:
(A) Five times the amount of money received by the person for
acting in the capacity for which the license, registration, or
certificate of authority was required but not possessed.
(B) Five thousand dollars ($5,000) for each day the person acted
in the capacity for which the license, registration, or certificate
of authority was required but not possessed. In the absence of
contrary evidence, it shall be presumed that a person continuously
acted in a capacity for which a license, registration, or certificate
of authority was required on each day from the date of the earliest
such act until the date those acts were discontinued, as proven by
the person at a hearing.
(b) Notwithstanding paragraph (3) of subdivision (a), the
commissioner shall not impose a monetary penalty under this section
on a person who has held a license or registration within the prior
five years pursuant to Chapter 5 (commencing with Section 1621),
Chapter 6 (commencing with Section 1760), Chapter 7 (commencing with
Section 1800), or Chapter 8 (commencing with Section 1831) of Part 2
of Division 1.
(c) A person to whom a cease and desist order or order to show
cause has been issued, may, within seven days after service of the
order, if a hearing has not already been scheduled by the
commissioner, request a hearing by filing a request for the hearing
with the commissioner. The hearing shall be conducted in accordance
with the Administrative Procedure Act (Chapter 3.5 (commencing with
Section 11340), Chapter 4 (commencing with Section 11370), Chapter
4.5 (commencing with Section 11400), and Chapter 5 (commencing with
Section 11500) of Part 1 of Division 3 of Title 2 of the Government
Code), and the commissioner shall have all the powers granted
therein.
(d) A person who has a hearing pursuant to subdivision (c) shall
be entitled to have the proceedings and the order of the commissioner
reviewed by means of any remedy provided by the Administrative
Procedure Act (Chapter 3.5 (commencing with Section 11340), Chapter 4
(commencing with Section 11370), Chapter 4.5 (commencing with
Section 11400), and Chapter 5 (commencing with Section 11500) of Part
1 of Division 3 of Title 2 of the Government Code).
12921.9. (a) A letter or legal opinion signed by the Commissioner
or the Chief Counsel of the Department of Insurance that was prepared
in response to an inquiry from an insured or other person or entity
and that discusses either generally or in connection with a specific
fact situation the application of the Insurance Code or regulations
promulgated by the commissioner shall be made public. The department
may redact the name, address, policy number, and other identifying
information regarding a particular insured or other person or entity
from the letter or legal opinion when it is made public.
(b) A letter or legal opinion made public pursuant to this section
shall not be construed as establishing an agency guideline,
criterion, bulletin, manual, instruction, order, standard of general
application, rule, or regulation, as those terms are described in
Sections 11340.5 and 11342.600 of the Government Code.
12922. The commissioner shall, on or before the first day of August
in each year, make a report to the Governor, the Legislature, and to
the committees of the Senate and Assembly having jurisdiction over
insurance containing a tabular statement and synopsis of the reports
which have been filed in his or her office and showing, generally,
the condition of the insurance business and interests in this state,
and other matters concerning insurance. The report shall also contain
a detailed verified statement, of the moneys and fees of office
received by him or her, and for what purpose.
12923. (a) With respect to all classes of insurance (1) to (20),
inclusive, as defined in Sections 101 to 120, inclusive, "actuary,"
for the purposes of this section, means either of the following:
(1) A member of the American Academy of Actuaries.
(2) An individual who has demonstrated by training and experience
actuarial competence to the satisfaction of the Insurance
Commissioner.
(b) The commissioner shall, after notice and hearing, pursuant to
Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3
of Title 2 of the Government Code, promulgate reasonable rules and
regulations which do all of the following:
(1) Describe the documents which must be signed by an actuary when
the documents are filed with the commissioner.
(2) Implement paragraph (2) of subdivision (a).
12923.5. (a) The Department of Managed Health Care and the
Department of Insurance shall maintain a joint senior level working
group to ensure clarity for health care consumers about who enforces
their patient rights and consistency in the regulations of these
departments.
(b) The joint working group shall undertake a review and
examination of the Health and Safety Code, the Insurance Code, and
the Welfare and Institutions Code as they apply to the Department of
Managed Health Care and the Department of Insurance to ensure
consistency in consumer protection.
(c) The joint working group shall review and examine all of the
following processes in each department:
(1) Grievance and consumer complaint processes, including, but not
limited to, outreach, standard complaints, including coverage and
medical necessity complaints, independent medical review, and
information developed for consumer use.
(2) The processes used to ensure enforcement of the law,
including, but not limited to, the medical survey and audit process
in the Health and Safety Code and market conduct exams in the
Insurance Code.
(3) The processes for regulating the timely payment of claims.
(d) The joint working group shall report its findings to the
Insurance Commissioner and the Director of the Department of Managed
Health Care for review and approval. The commissioner and the
director shall submit the approved final report under signature to
the Legislature by January 1 of every year for five years.
12924. (a) The commissioner may issue subpoenas and subpoenas duces
tecum for witnesses to attend, testify and produce documents before
him, on any subject touching insurance business, or in aid of his
duties. Such process may be served, obeyed, and enforced as provided
in the Code of Civil Procedure for civil cases. A defaulting witness
may, upon application by the commissioner to the superior court, be
required by order of such court to appear before the commissioner to
testify as the court may order. The court may punish disobedience of
its order as a contempt of court.
All the provisions of the Code of Civil Procedure relating to
means of production of evidence shall be applicable to any hearing or
investigation under this section. The provisions of this subdivision
shall not apply to proceedings required by other provisions of this
code to be conducted in accordance with Chapter 5 (commencing with
Section 11500), Part 1, Division 3, Title 2 of the Government Code.
(b) A person shall not be excused from testifying or from
producing any book, document, or other thing under his control upon
any such hearing or investigation on the ground that his testimony,
or the book, document, or other thing required of him, may tend to
incriminate him, or may have a tendency to subject him to punishment
for a felony or misdemeanor; but no individual shall be prosecuted or
be subjected to punishment for a felony or misdemeanor for or on
account of any act, transaction, matter or thing concerning which he
is so compelled, after validly claiming his privilege against
self-incrimination, to testify or produce, except for perjury or
contempt committed in such testimony.
12925. The commissioner shall keep and preserve in a permanent form
a full record of his proceedings, including a concise statement of
the condition of each insurer, surplus line broker or motor club
examined as to condition and affairs by by him.
12926. The commissioner shall require from every insurer a full
compliance with all the provisions of this code.
12926.1. (a) In any matter involving compliance with or enforcement
of any of the provisions of this code or the other laws of this
state involving any entity subject to the jurisdiction or authority
of the commissioner, whether the matter is a formal administrative
accusation or adjudication, a formal or potential judicial action, or
other enforcement tool, and whether or not the matter is settled or
prosecuted to resolution, the use of any funds that are imposed as
fines or penalties of any sort, or collected by means of settlement,
or paid or reserved in any manner as a result of the action, shall be
subject to the limitations of this section.
(b) Fines, penalties, fees, and costs shall be deposited in the
appropriate fund as provided by law.
(c) Any funds ordered, or allocated by a settlement, to be used
for public outreach of any sort, shall be subject to all of the
following limitations:
(1) The commissioner's name, likeness, or voice shall not be used
in any printed, audio, or visual material that is released either for
general distribution or to specific recipients unless a court finds
good cause to do so.
(2) The message shall be limited to information relevant to the
enforcement action or compliance issues that generated the funds.
(3) The primary focus of any public outreach where the purpose is
to advise members of the public of rights affecting pecuniary or
property interests shall be to provide specific information needed by
the affected persons to obtain or protect those rights.
(4) No funds subject to this subdivision shall be used for general
education of the public about insurance issues, except to the extent
that the education relates to the type of violations that caused the
enforcement or compliance action, and otherwise complies with the
limitations of this section.
(5) No funds subject to this subdivision shall be spent or
otherwise disposed of unless the expenditure or disposal has been
approved by a court of competent jurisdiction.
(d) (1) This section may be enforced by an affected individual
with an interest in the matter or a policyholder of an insurer that
is a party to a settlement with the department, a city attorney, a
district attorney, or the Attorney General, who may bring an action
against the commissioner in the superior court in any county where a
violation of this section has occurred.
(2) A court may issue injunctions or provide other equitable
remedies as appear to the court to be appropriate, and shall order
payment by the commissioner from nonpublic funds to a prevailing
party who has brought an action under this section of an amount
sufficient to compensate the party for all attorneys' fees, costs of
litigation, and expenses incurred in bringing and prosecuting the
action. For the purposes of this section, "nonpublic funds" does not
include assets of an insurer or other party to a settlement that are
not part of a valid and voluntary settlement with the department or
commissioner.
(e) The commissioner may not increase fees or assessments against
insurers in order to comply with this section.
12926.2. (a) As used in this section, "extraordinary circumstances"
means circumstances outside of the control of a licensee that
severely and materially affect the licensee's ability to conduct
normal business operations.
(b) In determining noncompliance with this code and regulations
adopted pursuant to this code, and appropriate penalties, if any, the
commissioner may consider evidence concerning the existence of
extraordinary circumstances.
(c) A settlement agreement between the commissioner and an insurer
may not contain a provision referencing the existence of
extraordinary circumstances relative to the subject matter at issue,
unless the agreement specifies the precise period of time during
which extraordinary circumstances were in existence. Except as
provided in subdivision (d), extraordinary circumstances may not be
stated to exist for a duration of more than six months.
(d) A settlement agreement may concede the existence of
extraordinary circumstances for a period of time exceeding six months
if all of the following conditions are met:
(1) The commissioner makes a finding in the agreement that
extraordinary circumstances existed for more than six months, and
documents in that finding facts supporting that conclusion.
(2) The finding identifies the public purpose justifying the
extension of extraordinary circumstances beyond the six-month period.
(3) The beginning and ending date, by month and year, of the
commencement and termination of the extraordinary circumstances are
identified.
12927. All statements, estimates, percentages, payments, and
calculations, required by this code to be made, either by the
commissioner or insurers, shall be made on the basis of lawful money
of the United States.
12928. Whenever the commissioner ascertains that any insurer or any
of its agents, officers or employees or any other person is guilty
of violating any of the penal provisions of this code or of other
laws he shall certify the facts of the violation to the district
attorney of the county in which such offense was committed.
12928.5. Whenever facts exist by reason of which, under any
provision of this code, or other laws the commissioner may suspend,
revoke, or deny any license or certificate of authority granted under
any provision of this code, if the making or maintenance in force of
a contract of insurance is one of the circumstances out of which
such facts arise, or if, by reason of the existence of such facts, or
in connection therewith a contract of insurance is made or
maintained in force, the commissioner may, in lieu of or in addition
to, such suspension, revocation or denial of license or certificate,
by order require the immediate cancellation of such contract, unless
such contract, by its terms, is not subject to cancellation by the
insurer and the insured did not knowingly participate in such
wrongful acts.
The commissioner may also, in any such case, notify the insured,
stating the reason why such cancellation was required.
In any such case, whether or not the particular contract is thus
required to be canceled or is subject to such cancellation, the
commissioner may order the insurer, insurance agent, broker,
solicitor, surplus line broker, or life agent soliciting,
negotiating, or effecting such insurance to refrain from effecting
insurance upon the property, risk, or insured under such contract for
not exceeding five years from the date of the order.
The commissioner may suspend or revoke, or deny an application
for, any license or certificate of authority granted under any
provision of this code to any applicant or licensee violating any
order issued by him pursuant to this section.
12928.6. Whenever the commissioner believes, from evidence
satisfactory to him, that any person is violating or about to violate
any provisions of this code or any order or requirement of the
commissioner issued or promulgated pursuant to authority expressly
granted the commissioner by any provision of this code or by law, the
commissioner may bring an action in the name of the people of the
State of California in the superior court of the State of California
against such person to enjoin such person from continuing such
violation or engaging therein or doing any act in furtherance
thereof. In such action an order or judgment may be entered awarding
such preliminary or final injunction as is proper.
12929. Irrespective of any provision in any law of this state the
commissioner, pursuant to this code, has been and is authorized to
correct: by amendment, by partial deletion or by partial addition,
any record, finding, determination, order, rule or regulation made by
him upon becoming satisfied that it is fair, just and equitable to
make the correction and that any such record, finding, determination,
order, rule or regulation would have included such correction except
for mistake, clerical error, inadvertence, surprise or excusable
neglect.
Such correction shall only be made within a period of six months
following the original action.
When the facts are within the knowledge of the commissioner
personally he may, upon his own motion and ex parte, enter an order
making any such correction.
Otherwise he shall enter such an order of correction only after
receipt and consideration of a written petition of a person described
in Section 12923 or an employee of the Department of Insurance,
accompanied in either case by a sworn affidavit of the facts
constituting the mistake, clerical error, inadvertence, surprise or
excusable neglect relied upon to justify the correction requested. In
such case the order may be made ex parte.
In either case the order shall recite the grounds and bases for
the correction and shall be promptly given the same distribution,
publicity, and circulation as was given the matter being corrected.
If, within 60 days following the making of the order of correction
anyone objects thereto in writing, the commissioner shall set the
matter for hearing, giving the same notice thereof, if any, as was
given to the proceeding which gave rise to the original record,
finding, determination, order, rule or regulation.
12930. Offenses under this code, or under other laws relating to
insurers, shall be prosecuted and tried in all respects as provided
in the Penal Code for public offenses. For the purpose of evidence
the commissioner shall furnish to any district attorney, without cost
to the county, certified copies of any papers or records of the
office of the commissioner.
12931. (a) Service of legal process, notices or other papers
described in or referred to by Section 1452, 1605, 1610, 1612, 1659,
1660, 11104 or 11105 may be made upon the commissioner in the
instances enumerated in this section and under the circumstances
prescribed in this section by delivering to the commissioner or his
deputy two copies thereof for each person or party defendant so
served accompanied by payment of twelve dollars ($12) for each such
person or party, and by complying with the other provisions of this
section.
(b) The situations under which such service may be so made and the
circumstances under which these provisions apply are:
(1) Where for any reason the person desiring to have service so
made elects to serve the commissioner instead of the attorney in
fact, as stipulated pursuant to Section 1323, of a reciprocal or
interinsurance exchange, domestic, foreign, admitted or nonadmitted.
(2) Where service is to be made on an admitted foreign or alien
insurer, when service cannot be made on the principal statutory agent
of such insurer duly appointed pursuant to Article 3 (commencing
with Section 1600) of Chapter 4 of Part 2 of Division 1 for reasons
specified in Section 1604 or otherwise recognized by law.
(3) In actions against nonadmitted insurers, including nonadmitted
fraternal benefit societies and reciprocals, under the circumstances
described in Article 4 (commencing with Section 1610) of Chapter 4
of Part 2 of Division 1. This provision shall not apply to actions
brought under insurance policies or certificates issued by
nonadmitted insurers placed by surplus line brokers or special lines
surplus line brokers where such insurance contract names a resident
of this state as agent for service of process.
(4) In the instances described by Section 1659 relating to
nonresident California-licensed insurance agents, brokers and life
agents.
(5) In actions involving admitted and formerly admitted fraternal
benefit societies as described in Section 11104.
(c) Upon receipt of two copies of the process, notice or papers to
be served and the fee above prescribed, the commissioner shall
promptly mail one of the copies by certified mail (or by registered
mail if it is addressed to an area outside of the United States where
certified mail service is not available) to the defendant or person
to be served at his last principal place of business known to the
commissioner by his official records in the case of a licensee;
otherwise, in the case of a nonadmitted insurer, to its last
principal place of business known to the commissioner from national
directories or reference books or other reliable information
available in the commissioner's office. He shall keep a record of all
services made upon him pursuant to this section. The other copy of
such process, notice or papers shall be retained among his official
public records for a period not to exceed two years, absent special
circumstances which in his judgment compel longer retention.
(d) Such service made in the manner provided for in this section
is valid and sufficient and gives jurisdiction over the person of a
nonadmitted or unauthorized defendant, provided notice of such
service and a copy of the process, notice or papers being served are
sent within 10 days thereafter by certified mail (or by registered
mail if it is addressed to an area outside of the United States where
certified mail service is not available) by plaintiff or plaintiff's
attorney to the defendant at its last known principal place of
business, and the receipt or the receipt of defendant's agent for
such copy, showing the name of the sender and the name and address of
the addressee-defendant thereon, and the affidavit of plaintiff or
plaintiff's attorney showing compliance with this section, are filed
with the clerk of the court in which such action is pending on or
before the date the defendant is required to appear, or within such
further time as the court may allow.
In case of service made pursuant to this section upon a licensee
of the commissioner required by law to keep his or its current
business address or that of its agent for service of process on file
with the commissioner, such service shall be valid if the
commissioner mailed, postage prepaid, a copy of the process, notice
or papers to the defendant or licensee intended to be served to his
current address as shown by the commissioner's records, or in the
case of an insurer, to its manager, president or secretary, and an
affidavit of compliance by plaintiff or plaintiff's attorney at law
is made and filed at the place and within the time mentioned in this
subdivision.
(e) No plaintiff or complainant shall be entitled to a judgment by
default in any such action, suit or proceeding in which service of
process is effected in the manner provided in this section until the
expiration of 30 days from the date on which the affidavit of
compliance is filed.
(f) Nothing in this section shall limit or abridge the right to
serve any process, notice, papers or demand upon any insurer in any
other manner now or hereafter permitted by law.
12935. (a) The commissioner, by January 1, 1997, shall develop and
make available to the general public, in the two most common
non-English languages spoken in the state, which are Spanish and
Vietnamese, informational sheets that provide a general explanation
in those languages, of the terms most commonly used in passenger
automobile and pickup truck liability insurance policies.
(b) These informational sheets are intended to provide only the
general explanation of these insurance terms, and in the case of a
dispute between an insurer and an insured, the policy as written in
English will prevail. The development of informational sheets or the
use of these informational sheets by insureds, insurers, agents,
brokers, or the state shall not be interpreted as creating a duty or
obligation to provide additional information or insurance policies in
a non-English language.
(c) An informational sheet developed by the commissioner shall
include a disclaimer, prominently displayed in 24-point type print at
the beginning of the informational sheet, in the non-English
language, that contains all of the following information:
(1) The informational sheet is for informational purposes only.
(2) The actual terms of an insurance policy prevail over the
information provided in the informational sheet.
(3) In the case of a dispute, the insurance policy is controlling
and a court will rely on the policy as it is written in English to
resolve the dispute.
(4) The policy is the sole source of rights and obligations of the
insurer and the insured.
(5) The information contained in the informational sheets does not
create rights or obligations on the part of the insured, the
insurer, the agent, the broker, or the state.
(6) The informational sheet is not intended to be a substitute for
the actual policy written in English.
(d) The commissioner may develop informational sheets regarding
other forms of insurance.
(e) The commissioner may develop informational sheets in foreign
languages, other than Spanish and Vietnamese, as needed.
(f) Once developed by the commissioner, he or she may produce
public service announcements concerning the availability of these
informational sheets, to be utilized in those communities that the
commissioner deems would benefit from the information.
(g) This section does not prevent an insurer or licensee from
advertising an insurance policy, or the availability of a foreign
language informational sheet, or the availability of a translation of
an insurance policy, in a language other than English if the
advertisement clearly states that the insurance policy is only
available in English. However, in the case of a dispute, the
insurance policy is controlling and any of those advertisements for
insurance policies, informational sheets, or translations shall not
be construed to modify or change the insurance policy.
12936. (a) (1) Escheated funds deposited in the Insurance Fund
pursuant to subdivision (a) of Section 1523 of the Code of Civil
Procedure shall be transferred to the General Fund on June 30, 1998,
to repay the principal and interest on the General Fund loan provided
pursuant to Item 0845-001-0001 of the Budget Act of 1996, and such
funds are hereby continuously appropriated for that purpose.
(2) If the Director of Finance determines that funds subject to
escheat for the 1997-98 fiscal year are insufficient to repay the
General Fund loan plus the interest owed, funds subject to escheat in
the 1998-99 fiscal year, up to the amount necessary to repay the
General Fund loan plus the interest owed, shall be available for
expenditure by the commissioner to repay the principal and interest
on the General Fund loan. Notwithstanding the loan repayment date
specified in Item 0845-001-0001 of the Budget Act of 1996, such a
determination by the Director of Finance shall trigger an extension
of the loan repayment date to June 30, 1999.
(b) A policyholder who was entitled to a rebate pursuant to
settlement or order of the commissioner and who has not received the
escheated rebate may submit a claim to the Controller. The Controller
shall pay the claim from among the Proposition 103 refunds that have
escheated to the state and been deposited in the Unclaimed Property
Fund upon verification that the claim is valid.
12937. (a) Escheated funds deposited in the Insurance Fund pursuant
to subdivision (b) of Section 1517 of the Code of Civil Procedure
shall be available for expenditure by the commissioner to fund
proceedings and to pay expenses on nonasseted estates for which
liabilities have been or will be incurred.
(b) A policyholder who was entitled to funds described in
subdivision (a) pursuant to an order of distribution and who has not
previously received an appropriate distribution may submit a claim to
the commissioner. The commissioner shall pay the claim from the
escheated funds deposited in the Insurance Fund pursuant to
subdivision (a) upon verification that the claim is valid.
(c) The department shall not be required to conduct outreach
programs to attempt to locate policyholders described in subdivision
(b).
12938. Notwithstanding any other provision of law, the department
shall make available for public inspection and publish on its website
all of the information described in subdivisions (a) and (b). This
information shall be maintained in a current, up-to-date condition.
All identifying and privileged information regarding individual
policyholders shall be redacted from documents available for public
inspection and on the website.
(a) All fully executed stipulations, orders, decisions,
settlements, or other forms of agreement resolving market conduct
examinations, whether the examinations were finalized, terminated, or
suspended, that pertain to unfair or deceptive practices in the
business of insurance as defined in Section 790.03.
(b) (1) Every adopted report of an examination of unfair or
deceptive practices in the business of insurance as defined in
Section 790.03 that is adopted as filed, or as modified or corrected,
by the commissioner pursuant to Section 734.1.
(2) The commissioner upon adopting the report shall by certified
United States mail transmit a copy of the report to the examined
insurer's designated agent for service of process. Within 10 business
days after the transmittal, the examined insurer may submit comments
to the commissioner relating to the adopted report. The comments
shall be in a form and length as provided by regulation.
(3) Ten business days after the transmittal the commissioner shall
publish on the department's website the adopted report and any
comments submitted by the examined insurer unless a court of
competent jurisdiction has stayed the publication of the report.
(c) This section may not be construed to require the disclosure of
company workpapers or other company documents discovered during the
course of an examination or any preliminary report of the
examination, except as otherwise permitted by law.