15006. (a) No person shall engage in a business regulated by this
chapter, or act or assume to act as, or represent himself or herself
to be, a licensee unless he or she is licensed under this chapter.
Any person who violates this subdivision shall, in addition to any
other penalties provided by law, be liable to the state for a civil
penalty in an amount not exceeding ten thousand dollars ($10,000), or
if that violation is willful, in an amount not exceeding twenty-five
thousand dollars ($25,000). The penalty shall be assessed and
recovered in a civil action brought by the commissioner in a court of
competent jurisdiction in the name of the people of the State of
California.
(b) Any contract for services regulated by this chapter that is
entered into by an insured with any person who is in violation of
subdivision (a) may be voided at the option of the insured, and the
insured shall not be liable for the payment of any past services
rendered, or future services to be rendered, by that person under
that contract or otherwise.
(c) Whenever it appears to the commissioner that any person is
engaging in acts or practices in violation of subdivision (a), the
commissioner may, without any requirement of notice or hearing, issue
and cause to be served upon that person an order requiring that
person to cease and desist immediately from engaging further in those
acts or practices.
(d) Any person who fails to comply fully with an order of the
commissioner issued under subdivision (c) shall be liable to the
state for a civil penalty in an amount not exceeding one hundred
dollars ($100) per day for each and every day that the violation or
failure to comply continues, but in no event to exceed a maximum
amount of five thousand dollars ($5,000). The commissioner shall
collect the amount so payable and may bring an action in a court of
competent jurisdiction in the name of the people of the State of
California to enforce collection. This penalty is in addition to any
other penalties provided by law.
(e) The powers vested in the commissioner by this section are in
addition to any and all other powers and remedies vested in the
commissioner by law, and nothing herein shall be construed as
requiring the commissioner to employ the powers conferred in this
section instead of or as a condition precedent to the exercise of any
other power or remedy vested in the commissioner.
15007. A public insurance adjuster within the meaning of this
chapter is a person who, for compensation, acts on behalf of or aids
in any manner, an insured in negotiating for or effecting the
settlement of a claim or claims for loss or damage under any policy
of insurance covering real or personal property or any person who
advertises, solicits business, or holds himself or herself out to the
public as an adjuster of those claims and any person who, for
compensation, investigates, settles, adjusts, advises, or assists an
insured with reference to claims for those losses on behalf of any
public insurance adjuster.
15008. This chapter does not apply to:
(a) An officer or employee of the United States of America or of
the state or of a political subdivision thereof while the officer or
employee is engaged in the performance of his or her official duties.
(b) A charitable philanthropic society duly incorporated under the
laws of this state which is organized and maintained for the public
good and not for private profit.
(c) An attorney at law in performing his or her duties as an
attorney at law.
(d) Admitted insurers, agents, and insurance brokers licensed by
the state performing duties in connection with insurance transactions
by them.
(e) The legal owner of personal property which has been sold under
a conditional sales agreement or a mortgagee under the terms of a
chattel mortgage.
(f) Any salaried office employee who performs exclusively clerical
and administrative duties attendant to the disposition of the
business regulated by this chapter.
(g) Photographers, estimators, appraisers, engineers, and
arbitrators, who are employed exclusively by a public insurance
adjuster for the purpose of furnishing technical assistance to a
licensed public insurance adjuster.
(h) A private investigator licensed pursuant to Chapter 11.5
(commencing with Section 7512) of Division 3 of the Business and
Professions Code while acting within the scope of that license.
15009. An application for a license under this chapter shall be on
a form prescribed by the commissioner and accompanied by the
application fee provided by this chapter. Every applicant for a
license under this chapter shall comply with the provisions of
Section 1703.
15010. An application shall be verified and shall include all of
the following:
(a) The full name and business address of the applicant.
(b) The name under which the applicant intends to do business.
(c) A statement as to the general nature of the business in which
the applicant intends to engage.
(d) A statement as to the classification or classifications under
which the applicant desires to be qualified.
(e) If the applicant is a person other than an individual, the
full name and resident address of each of its partners, officers, and
directors.
(f) Two recent photographs of the applicant, of the type
prescribed by the commissioner, and two classifiable sets of his or
her fingerprints.
(g) A verified statement of his or her experience qualifications.
(h) Such other information, evidence, statements or documents as
may be required by the commissioner.
15011. Before an application for a license is granted, the
applicant shall meet all of the following:
(a) Be at least 18 years of age.
(b) Be a bona fide resident of the State of California.
(c) Must be of good character and shall not have committed acts or
crimes constituting grounds for denial of licensure under Section
1668 or 1669.
(d) Shall have had sufficient experience, or special education or
training, or both, in the handling of loss claims under insurance
contracts as determined by regulations adopted by the commissioner,
and is competent to transact business and discharge the
responsibilities of a public insurance adjuster in such a manner as
to safeguard the interests of the public.
(e) Must maintain an office in the State of California with public
access during regular business hours.
(f) Pass an exam given by the commissioner in regard to property
loss adjusting.
(g) Post a surety bond executed by a surety company authorized to
do business in this state in the sum of twenty thousand dollars
($20,000).
(h) Comply with any other qualifications as required by the
commissioner.
15012. The license issued by the commissioner shall include, but
not be limited to, adjusting claims for fire and allied coverages,
burglary, flood, and all property claims both real and personal, and
loss of income.
15013. Each applicant for a license as a public insurance adjuster,
except as provided in Section 15014, shall, prior to issuance of the
license, personally take and pass, to the satisfaction of the
commissioner, an examination given by the department as follows:
(a) The examination shall be prescribed by the commissioner and
shall be of sufficient scope reasonably to test the applicant's
knowlege, among other things, of basic insurance theory, essential
elements of contracts, technical competence in the handling of the
various lines for which the applicant is being tested, claims ethics
and knowledge of the Unfair Claims Practices Act, and the duties and
responsibilities of public insurance adjusters under the law.
(b) Such examination shall be given to applicants under the
supervision of the department of this state, and shall be in written
form.
(c) The commissioner shall, within a reasonable period of time,
not to exceed 30 days, transmit the results of the examination and
action taken on the application to the applicant.
(d) In the event an applicant, who is otherwise qualified, fails
the examination, the commissioner may administer a reexamination,
after a waiting period not to exceed six months.
(e) The examination shall be given at those times and places
within the state as the commissioner deems reasonably necessary to
serve the convenience of the department and applicants.
15015. Payment of the application fee prescribed by this chapter
entitles the applicant to one examination without further charge. If
the person fails to pass the examination, he or she shall not be
eligible for any subsequent examination except upon payment of the
reexamination fee prescribed by this chapter for each subsequent
examination.
15016. (a) The commissioner shall issue an interim license to all
qualified individuals for the purpose of training so long as the
persons meet all of the following requirements:
(1) Are employed and under the direct supervision of a person
licensed under the provisions of this chapter.
(2) Qualify under the applicable provisions of Section 15011.
(3) Pay a license fee of one hundred dollars ($100).
(4) Comply with any other qualifications required by the
commissioner.
(b) An interim license may be issued for a period not to exceed
one year and may not be renewed.
15017. A nonresident license shall be issued by the commissioner to
qualified persons who meet the requirements of this chapter as set
forth in subdivisions (a), (c), (d), (e), (f), (g), and (h) of
Section 15011 and who have appointed the commissioner as an agent for
service of process in this state.
15018. After a hearing, the commissioner may deny a license unless
the applicant makes a showing satisfactory to the commissioner that
the applicant has not:
(a) Committed any acts or crimes constituting grounds for denial
of license under Section 1668.
(b) Been refused a license under this chapter or had a license
revoked.
(c) While unlicensed, committed, aided or abetted the commission
of any acts for which a license is required in this chapter.
(d) Been convicted of any crime or wrongdoings in connection with
this license.
15018.5. The commissioner may, without hearing, deny an application
if the applicant has committed any act or been convicted of a crime
constituting grounds for denial of license under Section 1669.
15019. Whenever a hearing is held under this chapter to determine
whether an applicant for a license should be granted or to determine
the qualifications of a licensee, the proceeding shall be conducted
in accordance with Chapter 5 (commencing with Section 11501) of Part
1 of Division 3 of Title 2 of the Government Code, and the
commissioner shall have all the powers granted therein.
15020. The form and content of the license shall be determined by
the commissioner in accordance with Section 164 of the Business and
Professions Code.
15021. The license shall at all times be posted in a conspicuous
place in the principal place of business of the licensee.
15022. Upon the issuance of a license, a pocket card of that size,
design, and content as may be determined by the commissioner shall be
issued without charge to each licensee.
15023. A license issued under this chapter is not assignable.
15024. Each licensee shall file with the commissioner the complete
address of his or her principal place of business including the name
and number of the street, or if the street where the business is
located is not numbered, the number of the post office box. The
commissioner may require the filing of other information for the
purposes of indentifying that principal place of business.
15025. A licensee shall within 30 days of the change notify the
department of any change of his or her address. The principal place
of business may be at home or at a business address but it shall be
the place at which the licensee maintains a permanent office.
15026. A licensee shall not advertise or conduct business from any
location other than that shown on the records of the commissioner as
his or her principal place of business unless he or she has received
a branch office certificate for that location after compliance with
the provisions of this chapter and those additional requirements
necessary for the protection of the public as the commissioner may by
regulation prescribe. A licensee shall notify the commissioner in
writing within 10 days of closing or changing the location of a
branch office.
15027. (a) No licensee shall, directly or indirectly, act within
this state as a public insurance adjuster without having first
entered into a contract, in writing, on a form approved by the
insurance commissioner and executed in duplicate by the public
adjuster and the insured or a duly authorized representative. One
original contract shall be kept on file by the licensee, available at
all times for inspection, without notice, by the commissioner or his
or her duly authorized representative, and one original contract
shall be given to the insured.
(b) The written contract between the licensee and the insured
shall contain each of the following:
(1) Title of "Public Adjuster Contract."
(2) The name, business name, license number, telephone number, and
address of the licensee.
(3) The name and address of the insured.
(4) A description of the loss and its location, if applicable.
(5) The name of the insurer and the policy number, if known.
(6) The full salary, fee, commission, or other consideration the
licensee is to receive for services under the contract.
(7) A description of the services to be provided to the insured.
(8) Signatures of the licensee and the insured.
(9) The date the contract was signed by the licensee and the date
the contract was signed by the insured.
(10) The following statement: "As a public adjuster, I am required
by the California Insurance Code to post a surety bond in the sum of
$20,000 to cover certain kinds of claims made by you, the insured.
If you have any questions concerning the surety bond, you may contact
the California Department of Insurance Producer Licensing Call
Center at 1-800-967-9331 or www.insurance.ca.gov."
(11) A statement of the compensation to the licensee, including
the percentage and base to which the percentage applies.
(12) A statement that the insured has the right to rescind the
contract within three business days of signing it.
(c) A contract covered by this section shall not contain a
contract term that does any of the following:
(1) Allows the licensee's fee to be collected when money is due
from an insurer, but not paid, or allows a licensee to collect the
entire fee from the first payment issued by an insurer, rather than
as a percentage of each payment issued by an insurer.
(2) Requires the insured to authorize an insurer to issue a
payment only in the name of the licensee.
(3) Imposes late fees or collection costs on the insured.
(d) No licensee shall solicit or attempt to solicit a client for
employment during the progress of a loss-producing occurrence.
(e) No licensee or any other person or entity offering, for a fee,
service regulated by this chapter shall solicit a client for
employment or initiate any contact with a policyholder between the
hours of 6 p.m. and 8 a.m.
(f) No licensee shall use any form of contract other than that
approved by the commissioner and which contains each of the
following:
(1) A provision allowing the client to rescind the contract by
written notice sent or delivered by certified mail, return receipt
requested, or other form of mailing which provides proof of mailing,
to the licensee by midnight of the third business day after the day
on which the client signs a contract which complies with this
section. Each copy of the contract shall contain a completed form,
captioned "Notice of Cancellation," which shall be placed at the end
of the contract and be separated from the remainder of the contract
by a printed line. Nothing shall be printed on the reverse side of
the notice form. The notice form shall be completed by the licensee,
and shall contain in type of at least 10-point the following
statement written in the same language, e.g., Spanish, as used in the
contract:
Notice of Cancellation
_____________________________
(Date of Contract)
You may cancel this contract within three business days from the
above date without any penalty or obligation to pay your public
adjuster, other than for reimbursement of moneys paid by your public
adjuster for out-of-pocket emergency expenses for you or on your
behalf. If your public adjuster seeks reimbursement from you for
out-of-pocket emergency expenses, your public adjuster shall provide
you with an itemized statement of those emergency expenses advanced
to you or on your behalf if the cancellation is made within the first
three business days after the contract was initiated. Nothing in
this contract permits your public adjuster to recover any costs,
except for out-of-pocket emergency expenses advanced to you.
If you cancel, any money or other consideration paid by you will
be returned within five business days following the receipt of your
cancellation notice, and any security interest arising out of the
transaction will be canceled.
To cancel this contract, mail or deliver by certified mail, return
receipt requested, or other form of mailing which provides proof of
mailing, a signed and dated copy of this cancellation notice, or any
other written notice, or send a telegram to:
__________________________________________________
(name of public adjuster)
at
__________________________________________________
(address of public adjuster's place of business)
not later than midnight of________________________
(Date)
I hereby cancel this contract_____________________
(Date)
__________________________________________________
(Client's signature)
(2) The statement "WE REPRESENT THE INSURED ONLY" prominently
displayed in at least 10-point type.
(3) A provision disclosing the percentage of the insured's claim,
or other fee, that the licensee will charge for his or her services.
The licensee shall obtain the initials of the insured next to this
provision.
(4) A conspicuous statement in at least 10-point type in immediate
proximity to the space reserved for the client's signature, as
follows: "You may cancel this contract at any time before midnight of
the third business day after the date of this contract. See the
notice of cancellation form at the end of this contract for an
explanation of this right."
(g) No licensee shall knowingly make any false report to his or
her employer or divulge to any other person, except as he or she may
be required by law to do so, any information acquired by him or her
except at the direction of the employer or a client for whom the
information is obtained.
(h) No licensee shall use a badge in connection with the official
activities of the licensee's business.
(i) No licensee shall permit an employee or agent in his or her
own name to advertise, engage clients, furnish reports, or present
bills to clients, or in any manner whatever to conduct business for
which a license is required under this chapter.
(j) Pursuant to subdivisions (a) and (c) of Section 15006, the
commissioner shall have the authority to enforce the provisions of
this chapter and prosecute violations thereunder committed by
unlicensed persons or entities that hold themselves out or act as
public insurance adjusters.
(k) For purposes of this section, "business day" shall have the
same meaning given to that term in subdivision (e) of Section 1689.5
of the Civil Code, as in effect on the operative date of this
statute.
(l) The contract and the notice of cancellation set forth in
paragraph (1) of subdivision (f) shall be written in the same
language, e.g., Spanish, as principally used in the negotiation of
the contract.
(m) Within five business days after a contract has been canceled,
the licensee shall tender to the client any payments made by the
client and any note or other evidence of indebtedness, including an
itemized statement of all amounts tendered to the client.
(n) The licensee is not entitled to compensation for services
performed prior to cancellation, other than for reimbursement of
moneys paid by the licensee for out-of-pocket emergency expenses for
the client or on behalf of the client. If the licensee seeks
reimbursement from the client for out-of-pocket emergency expenses,
and if the cancellation is made within the first three business days
after the contract was initiated, the licensee shall provide the
client with an itemized statement of those emergency expenses
advanced to the client or on behalf of the client by the licensee.
Nothing in this subdivision shall permit the licensee to recover any
costs, except for out-of-pocket emergency expenses advanced to the
client. Any security interest shall be canceled upon cancellation of
the contract.
(o) Notice of cancellation given by the client need not take the
particular form specified in paragraph (1) of subdivision (f). Notice
of cancellation, however expressed, is effective if it indicates the
intention of the client not to be bound by the contract.
(p) Cancellation occurs when the client gives written notice of
cancellation by certified mail, return receipt requested, or other
form of mailing which provides proof of mailing, to the licensee at
the address specified in the contract.
(q) Notice of cancellation, if given by mail, is effective when
sent by certified mail, return receipt requested, or other form of
mailing which provides proof of mailing, properly addressed with
postage prepaid.
(r) Until the licensee has complied with this section, the client
may cancel the contract.
(s) The contracts shall be executed in duplicate. The licensee
shall retain one original contract, and shall provide the insured
with an original contract.
(t) The licensee shall provide the client with an original
contract and notice of cancellation at the time the client signs the
contract.
(u) Any confession of judgment or waiver of the provisions of this
chapter shall be deemed contrary to public policy and shall be void
and unenforceable.
(v) Prior to the signing of the contract, the licensee shall
provide the insured with a separate printed disclosure document in
the following form that bears the name and license number of the
licensee:
"DISCLOSURE
There are three types of insurance adjusters that could be
involved in the processing of your insurance claim. The definitions
of the three types are as follows:
(1) Public adjusters means the insurance adjusters who do not work
for your insurance company. They work for you, the insured, to
assist in the preparation, presentation, and settlement of your
claim. You hire them by signing a contract and agreeing to pay them a
fee or commission based on a percentage of the settlement, or other
method of compensation. Public adjusters are required to be licensed,
bonded, and tested by the State of California to represent your
interest only.
(2) Company adjusters means the insurance adjusters who are
employees of your insurance company. They represent your insurance
company and are paid by your insurance company. They will not charge
you a fee and are not individually licensed or tested by the State of
California.
(3) Independent adjusters means the insurance adjusters who are
hired on a contract basis by your insurance company to represent the
company in the settlement of the claim. They are paid by your
insurance company. They will not charge you a fee.
You have the right, but are not required, to use the services of a
public adjuster in the preparation and handling of your insurance
claim.
Public adjusters cannot solicit your business while the loss is
underway, or between the hours of 6 p.m. and 8 a.m.
Your "Public Adjuster Contract," with a public adjuster
representing you, should clearly indicate the amount of the fee you
will be paying to your public adjuster. Your contract, with this fee
percentage, should be acknowledged by your initials on the "Public
Adjuster Contract." The salary, fee, commission, or other
consideration is to be paid by you (the insured), not the insurance
company (insurer).
You have the right to cancel the contract with your public
adjuster, without any penalty or obligation, within three business
days from the date the contract is signed.
If you cancel the contract with your public adjuster, any money or
other consideration paid by you will be returned within five
business days following the receipt of your cancellation notice, and
any security interest arising out of the transaction will be
canceled.
To cancel the contract with your public adjuster, mail or deliver
by certified mail, return receipt requested, or other form of mailing
which provides proof of mailing, a signed and dated copy of the
cancellation notice, or any other written notice, or send a telegram
to the public adjuster at the address in the contract.
You have the right to, and may, communicate with your insurance
company at any time if you feel the need during the claims process.
If you have any concerns or questions, the officers at the
California Department of Insurance Consumer Hotline are there to help
you. Please call them at 1-800-927-HELP (4357), or
www.insurance.ca.gov."
(w) No later than three business days after the cancellation has
expired, the public adjuster shall notify the insurer, its adjuster,
or its attorney, that he or she has entered into a written contract
with the insured.
(x) If the licensee misrepresents or conceals a material fact from
the insured prior to execution of the contract, the insured is
entitled to rescind the contract without time limit.
15027.1. (a) Notwithstanding subdivision (e) of Section 15027, a
licensee shall not solicit a contract of engagement for residential
properties under this chapter until seven calendar days have elapsed
after the occurrence of a disaster.
(b) Subdivision (a) shall not apply if the licensee is contacted
directly by the insured or the insured's representative.
(c) For the purposes of this section, "disaster" means a
loss-producing event that damages or destroys more than 25 dwellings,
or a "disaster" as that term is defined in subdivision (b) of
Section 1689.14 of the Civil Code.
15027.5. Any person acting as a public adjuster who has executed a
contract as described in Section 15027 is the agent of the insured.
While acting under the authority of such a contract, a public
adjuster may not receive any fees or other consideration, monetary or
otherwise, from either the insured or any other source, in excess of
the amount or percentage provided in the contract. Any compensation
received by the public adjuster from any party or any other source
connected to the claim adjustment, including any contractor, insurer,
or vendor, shall be disclosed by the public adjuster to the insured.
The insured may rescind the contract if the adjuster fails to make
the required disclosure or if the public adjuster's receipt of any
compensation from a third party conflicts with the interests of the
insured.
15028. No person licensed as a public insurance adjuster shall do
any of the following:
(a) Use any misrepresentation to solicit a contract or agreement
to adjust a claim.
(b) Solicit or accept remuneration from, or have a financial
interest in, any salvage, repair or other firm which obtains business
in connection with any claim he or she has a contract or agreement
to adjust.
(c) Advance moneys to any potential client or insured in order to
obtain business.
(d) Offer to pay a fee, commission, or other valuable
consideration, exceeding one hundred dollars ($100), to a person for
referring a loss unless he or she employs that person to so act for
him or her and that person is licensed to act as an adjuster under
the provisions of this chapter.
15028.5. (a) A public insurance adjuster shall maintain a complete
record of each of his or her transactions as a public insurance
adjuster. The records shall include all of the following:
(1) The name of the insured.
(2) The date, location, and amount of the loss.
(3) A copy of the contract between the public insurance adjuster
and the insured.
(4) The name of the insurer and the amount, expiration date, and
number of each policy carried with respect to the loss.
(5) An itemized statement of the recoveries by the insured from
the sources known to the public insurance adjuster.
(6) The total compensation received for the adjustment.
(7) An itemized statement of disbursements made by the public
insurance adjuster from recoveries received on behalf of the insured.
(b) Records shall be maintained for at least five years after the
termination of the transaction with the insured, and shall be open to
examination by the commissioner.
15028.6. All funds received as claim proceeds by any person acting
as a public insurance adjuster are received and held by that person
in his or her fiduciary capacity. Any person who diverts or
appropriates any fiduciary funds for his or her own use is guilty of
theft and punishable for theft as provided by law. Every applicant
for a license to act as a public insurance adjuster shall, as part of
the application, endorse an authorization for disclosure to the
commissioner of all financial records of any fiduciary funds as
defined in this section, pursuant to Section 7473 of the Government
Code. The authorization shall continue in force and effect for so
long as the licensee continues to be licensed by the department.
15028.7. (a) A public adjuster who receives, accepts, or holds any
funds on behalf of an insured towards the settlement of a claim for
loss or damage shall deposit the funds in a non-interest-bearing
escrow or trust account in a financial institution that is insured by
an agency of the federal government in the adjuster's home state or
the state where the loss occurred.
(b) All funds held in an escrow or trust account shall be the
property of the insured and shall be held pursuant to a written
contract signed by the insured and the public adjuster.
(c) A public adjuster who receives any fiduciary funds shall,
within 15 business days of receipt, deposit the funds in the escrow
account and provide a written statement to the insured showing the
amount of funds received and deposited in escrow.
(d) A public adjuster who, after reasonable diligence, is unable
to obtain the endorsements of all payees designated on any bank draft
representing fiduciary funds, or who receives a written statement
from the insured indicating that he or she does not wish to establish
an escrow or trust account, shall be exempt from the requirements of
subdivisions (a) to (c), inclusive.
(e) The endorsement by a payee designated on any bank draft
representing fiduciary funds shall not be construed as a waiver of
any potential right of the payee to dispute the public adjuster's
entitlement to those funds or any portion thereof.
15029. No person shall concurrently hold a license under the
provisions of this chapter and the provisions of Chapter 1
(commencing with Section 14000).
15030. Each licensee shall maintain a record containing that
information relative to his or her employees as may be prescribed by
the commissioner.
15031. (a) A licensee shall not conduct a business under a
fictitious or other business name unless and until he or she has
obtained the written authorization of the commissioner to do so.
(b) The commissioner shall not authorize the use of a fictitious
or other business name that is so similar to that of a public officer
or agency or that used by another licensee that the public may be
confused or misled thereby.
(c) The authorization shall require, as a condition precedent to
the use of a fictitious name, that the licensee comply with Section
1724.5 of this code and Chapter 5 (commencing with Section 17900) of
Part 3 of Division 7 of the Business and Professions Code.
(d) A licensee desiring to conduct his or her business under more
than one fictitious name shall obtain the authorization of the
commissioner in a manner prescribed in this section for the use of
additional fictitious names.
(e) The licensee shall pay a fee of ten dollars ($10) for each
authorization to use an additional fictitious name and for each
change in the use of a fictitious business name. If the original
license is issued in a nonfictitious name and authorization is
requested to have the license reissued in a fictitious business name,
the licensee shall pay a fee of ten dollars ($10) for that
authorization.
15032. Every advertisement by a licensee soliciting or advertising
business shall contain his or her name, address, or license number as
they appear in the records of the commissioner. The commissioner may
adopt regulations defining the term "advertisement" as used in this
section.
15006. (a) No person shall engage in a business regulated by this
chapter, or act or assume to act as, or represent himself or herself
to be, a licensee unless he or she is licensed under this chapter.
Any person who violates this subdivision shall, in addition to any
other penalties provided by law, be liable to the state for a civil
penalty in an amount not exceeding ten thousand dollars ($10,000), or
if that violation is willful, in an amount not exceeding twenty-five
thousand dollars ($25,000). The penalty shall be assessed and
recovered in a civil action brought by the commissioner in a court of
competent jurisdiction in the name of the people of the State of
California.
(b) Any contract for services regulated by this chapter that is
entered into by an insured with any person who is in violation of
subdivision (a) may be voided at the option of the insured, and the
insured shall not be liable for the payment of any past services
rendered, or future services to be rendered, by that person under
that contract or otherwise.
(c) Whenever it appears to the commissioner that any person is
engaging in acts or practices in violation of subdivision (a), the
commissioner may, without any requirement of notice or hearing, issue
and cause to be served upon that person an order requiring that
person to cease and desist immediately from engaging further in those
acts or practices.
(d) Any person who fails to comply fully with an order of the
commissioner issued under subdivision (c) shall be liable to the
state for a civil penalty in an amount not exceeding one hundred
dollars ($100) per day for each and every day that the violation or
failure to comply continues, but in no event to exceed a maximum
amount of five thousand dollars ($5,000). The commissioner shall
collect the amount so payable and may bring an action in a court of
competent jurisdiction in the name of the people of the State of
California to enforce collection. This penalty is in addition to any
other penalties provided by law.
(e) The powers vested in the commissioner by this section are in
addition to any and all other powers and remedies vested in the
commissioner by law, and nothing herein shall be construed as
requiring the commissioner to employ the powers conferred in this
section instead of or as a condition precedent to the exercise of any
other power or remedy vested in the commissioner.
15007. A public insurance adjuster within the meaning of this
chapter is a person who, for compensation, acts on behalf of or aids
in any manner, an insured in negotiating for or effecting the
settlement of a claim or claims for loss or damage under any policy
of insurance covering real or personal property or any person who
advertises, solicits business, or holds himself or herself out to the
public as an adjuster of those claims and any person who, for
compensation, investigates, settles, adjusts, advises, or assists an
insured with reference to claims for those losses on behalf of any
public insurance adjuster.
15008. This chapter does not apply to:
(a) An officer or employee of the United States of America or of
the state or of a political subdivision thereof while the officer or
employee is engaged in the performance of his or her official duties.
(b) A charitable philanthropic society duly incorporated under the
laws of this state which is organized and maintained for the public
good and not for private profit.
(c) An attorney at law in performing his or her duties as an
attorney at law.
(d) Admitted insurers, agents, and insurance brokers licensed by
the state performing duties in connection with insurance transactions
by them.
(e) The legal owner of personal property which has been sold under
a conditional sales agreement or a mortgagee under the terms of a
chattel mortgage.
(f) Any salaried office employee who performs exclusively clerical
and administrative duties attendant to the disposition of the
business regulated by this chapter.
(g) Photographers, estimators, appraisers, engineers, and
arbitrators, who are employed exclusively by a public insurance
adjuster for the purpose of furnishing technical assistance to a
licensed public insurance adjuster.
(h) A private investigator licensed pursuant to Chapter 11.5
(commencing with Section 7512) of Division 3 of the Business and
Professions Code while acting within the scope of that license.
15009. An application for a license under this chapter shall be on
a form prescribed by the commissioner and accompanied by the
application fee provided by this chapter. Every applicant for a
license under this chapter shall comply with the provisions of
Section 1703.
15010. An application shall be verified and shall include all of
the following:
(a) The full name and business address of the applicant.
(b) The name under which the applicant intends to do business.
(c) A statement as to the general nature of the business in which
the applicant intends to engage.
(d) A statement as to the classification or classifications under
which the applicant desires to be qualified.
(e) If the applicant is a person other than an individual, the
full name and resident address of each of its partners, officers, and
directors.
(f) Two recent photographs of the applicant, of the type
prescribed by the commissioner, and two classifiable sets of his or
her fingerprints.
(g) A verified statement of his or her experience qualifications.
(h) Such other information, evidence, statements or documents as
may be required by the commissioner.
15011. Before an application for a license is granted, the
applicant shall meet all of the following:
(a) Be at least 18 years of age.
(b) Be a bona fide resident of the State of California.
(c) Must be of good character and shall not have committed acts or
crimes constituting grounds for denial of licensure under Section
1668 or 1669.
(d) Shall have had sufficient experience, or special education or
training, or both, in the handling of loss claims under insurance
contracts as determined by regulations adopted by the commissioner,
and is competent to transact business and discharge the
responsibilities of a public insurance adjuster in such a manner as
to safeguard the interests of the public.
(e) Must maintain an office in the State of California with public
access during regular business hours.
(f) Pass an exam given by the commissioner in regard to property
loss adjusting.
(g) Post a surety bond executed by a surety company authorized to
do business in this state in the sum of twenty thousand dollars
($20,000).
(h) Comply with any other qualifications as required by the
commissioner.
15012. The license issued by the commissioner shall include, but
not be limited to, adjusting claims for fire and allied coverages,
burglary, flood, and all property claims both real and personal, and
loss of income.
15013. Each applicant for a license as a public insurance adjuster,
except as provided in Section 15014, shall, prior to issuance of the
license, personally take and pass, to the satisfaction of the
commissioner, an examination given by the department as follows:
(a) The examination shall be prescribed by the commissioner and
shall be of sufficient scope reasonably to test the applicant's
knowlege, among other things, of basic insurance theory, essential
elements of contracts, technical competence in the handling of the
various lines for which the applicant is being tested, claims ethics
and knowledge of the Unfair Claims Practices Act, and the duties and
responsibilities of public insurance adjusters under the law.
(b) Such examination shall be given to applicants under the
supervision of the department of this state, and shall be in written
form.
(c) The commissioner shall, within a reasonable period of time,
not to exceed 30 days, transmit the results of the examination and
action taken on the application to the applicant.
(d) In the event an applicant, who is otherwise qualified, fails
the examination, the commissioner may administer a reexamination,
after a waiting period not to exceed six months.
(e) The examination shall be given at those times and places
within the state as the commissioner deems reasonably necessary to
serve the convenience of the department and applicants.
15015. Payment of the application fee prescribed by this chapter
entitles the applicant to one examination without further charge. If
the person fails to pass the examination, he or she shall not be
eligible for any subsequent examination except upon payment of the
reexamination fee prescribed by this chapter for each subsequent
examination.
15016. (a) The commissioner shall issue an interim license to all
qualified individuals for the purpose of training so long as the
persons meet all of the following requirements:
(1) Are employed and under the direct supervision of a person
licensed under the provisions of this chapter.
(2) Qualify under the applicable provisions of Section 15011.
(3) Pay a license fee of one hundred dollars ($100).
(4) Comply with any other qualifications required by the
commissioner.
(b) An interim license may be issued for a period not to exceed
one year and may not be renewed.
15017. A nonresident license shall be issued by the commissioner to
qualified persons who meet the requirements of this chapter as set
forth in subdivisions (a), (c), (d), (e), (f), (g), and (h) of
Section 15011 and who have appointed the commissioner as an agent for
service of process in this state.
15018. After a hearing, the commissioner may deny a license unless
the applicant makes a showing satisfactory to the commissioner that
the applicant has not:
(a) Committed any acts or crimes constituting grounds for denial
of license under Section 1668.
(b) Been refused a license under this chapter or had a license
revoked.
(c) While unlicensed, committed, aided or abetted the commission
of any acts for which a license is required in this chapter.
(d) Been convicted of any crime or wrongdoings in connection with
this license.
15018.5. The commissioner may, without hearing, deny an application
if the applicant has committed any act or been convicted of a crime
constituting grounds for denial of license under Section 1669.
15019. Whenever a hearing is held under this chapter to determine
whether an applicant for a license should be granted or to determine
the qualifications of a licensee, the proceeding shall be conducted
in accordance with Chapter 5 (commencing with Section 11501) of Part
1 of Division 3 of Title 2 of the Government Code, and the
commissioner shall have all the powers granted therein.
15020. The form and content of the license shall be determined by
the commissioner in accordance with Section 164 of the Business and
Professions Code.
15021. The license shall at all times be posted in a conspicuous
place in the principal place of business of the licensee.
15022. Upon the issuance of a license, a pocket card of that size,
design, and content as may be determined by the commissioner shall be
issued without charge to each licensee.
15023. A license issued under this chapter is not assignable.
15024. Each licensee shall file with the commissioner the complete
address of his or her principal place of business including the name
and number of the street, or if the street where the business is
located is not numbered, the number of the post office box. The
commissioner may require the filing of other information for the
purposes of indentifying that principal place of business.
15025. A licensee shall within 30 days of the change notify the
department of any change of his or her address. The principal place
of business may be at home or at a business address but it shall be
the place at which the licensee maintains a permanent office.
15026. A licensee shall not advertise or conduct business from any
location other than that shown on the records of the commissioner as
his or her principal place of business unless he or she has received
a branch office certificate for that location after compliance with
the provisions of this chapter and those additional requirements
necessary for the protection of the public as the commissioner may by
regulation prescribe. A licensee shall notify the commissioner in
writing within 10 days of closing or changing the location of a
branch office.
15027. (a) No licensee shall, directly or indirectly, act within
this state as a public insurance adjuster without having first
entered into a contract, in writing, on a form approved by the
insurance commissioner and executed in duplicate by the public
adjuster and the insured or a duly authorized representative. One
original contract shall be kept on file by the licensee, available at
all times for inspection, without notice, by the commissioner or his
or her duly authorized representative, and one original contract
shall be given to the insured.
(b) The written contract between the licensee and the insured
shall contain each of the following:
(1) Title of "Public Adjuster Contract."
(2) The name, business name, license number, telephone number, and
address of the licensee.
(3) The name and address of the insured.
(4) A description of the loss and its location, if applicable.
(5) The name of the insurer and the policy number, if known.
(6) The full salary, fee, commission, or other consideration the
licensee is to receive for services under the contract.
(7) A description of the services to be provided to the insured.
(8) Signatures of the licensee and the insured.
(9) The date the contract was signed by the licensee and the date
the contract was signed by the insured.
(10) The following statement: "As a public adjuster, I am required
by the California Insurance Code to post a surety bond in the sum of
$20,000 to cover certain kinds of claims made by you, the insured.
If you have any questions concerning the surety bond, you may contact
the California Department of Insurance Producer Licensing Call
Center at 1-800-967-9331 or www.insurance.ca.gov."
(11) A statement of the compensation to the licensee, including
the percentage and base to which the percentage applies.
(12) A statement that the insured has the right to rescind the
contract within three business days of signing it.
(c) A contract covered by this section shall not contain a
contract term that does any of the following:
(1) Allows the licensee's fee to be collected when money is due
from an insurer, but not paid, or allows a licensee to collect the
entire fee from the first payment issued by an insurer, rather than
as a percentage of each payment issued by an insurer.
(2) Requires the insured to authorize an insurer to issue a
payment only in the name of the licensee.
(3) Imposes late fees or collection costs on the insured.
(d) No licensee shall solicit or attempt to solicit a client for
employment during the progress of a loss-producing occurrence.
(e) No licensee or any other person or entity offering, for a fee,
service regulated by this chapter shall solicit a client for
employment or initiate any contact with a policyholder between the
hours of 6 p.m. and 8 a.m.
(f) No licensee shall use any form of contract other than that
approved by the commissioner and which contains each of the
following:
(1) A provision allowing the client to rescind the contract by
written notice sent or delivered by certified mail, return receipt
requested, or other form of mailing which provides proof of mailing,
to the licensee by midnight of the third business day after the day
on which the client signs a contract which complies with this
section. Each copy of the contract shall contain a completed form,
captioned "Notice of Cancellation," which shall be placed at the end
of the contract and be separated from the remainder of the contract
by a printed line. Nothing shall be printed on the reverse side of
the notice form. The notice form shall be completed by the licensee,
and shall contain in type of at least 10-point the following
statement written in the same language, e.g., Spanish, as used in the
contract:
Notice of Cancellation
_____________________________
(Date of Contract)
You may cancel this contract within three business days from the
above date without any penalty or obligation to pay your public
adjuster, other than for reimbursement of moneys paid by your public
adjuster for out-of-pocket emergency expenses for you or on your
behalf. If your public adjuster seeks reimbursement from you for
out-of-pocket emergency expenses, your public adjuster shall provide
you with an itemized statement of those emergency expenses advanced
to you or on your behalf if the cancellation is made within the first
three business days after the contract was initiated. Nothing in
this contract permits your public adjuster to recover any costs,
except for out-of-pocket emergency expenses advanced to you.
If you cancel, any money or other consideration paid by you will
be returned within five business days following the receipt of your
cancellation notice, and any security interest arising out of the
transaction will be canceled.
To cancel this contract, mail or deliver by certified mail, return
receipt requested, or other form of mailing which provides proof of
mailing, a signed and dated copy of this cancellation notice, or any
other written notice, or send a telegram to:
__________________________________________________
(name of public adjuster)
at
__________________________________________________
(address of public adjuster's place of business)
not later than midnight of________________________
(Date)
I hereby cancel this contract_____________________
(Date)
__________________________________________________
(Client's signature)
(2) The statement "WE REPRESENT THE INSURED ONLY" prominently
displayed in at least 10-point type.
(3) A provision disclosing the percentage of the insured's claim,
or other fee, that the licensee will charge for his or her services.
The licensee shall obtain the initials of the insured next to this
provision.
(4) A conspicuous statement in at least 10-point type in immediate
proximity to the space reserved for the client's signature, as
follows: "You may cancel this contract at any time before midnight of
the third business day after the date of this contract. See the
notice of cancellation form at the end of this contract for an
explanation of this right."
(g) No licensee shall knowingly make any false report to his or
her employer or divulge to any other person, except as he or she may
be required by law to do so, any information acquired by him or her
except at the direction of the employer or a client for whom the
information is obtained.
(h) No licensee shall use a badge in connection with the official
activities of the licensee's business.
(i) No licensee shall permit an employee or agent in his or her
own name to advertise, engage clients, furnish reports, or present
bills to clients, or in any manner whatever to conduct business for
which a license is required under this chapter.
(j) Pursuant to subdivisions (a) and (c) of Section 15006, the
commissioner shall have the authority to enforce the provisions of
this chapter and prosecute violations thereunder committed by
unlicensed persons or entities that hold themselves out or act as
public insurance adjusters.
(k) For purposes of this section, "business day" shall have the
same meaning given to that term in subdivision (e) of Section 1689.5
of the Civil Code, as in effect on the operative date of this
statute.
(l) The contract and the notice of cancellation set forth in
paragraph (1) of subdivision (f) shall be written in the same
language, e.g., Spanish, as principally used in the negotiation of
the contract.
(m) Within five business days after a contract has been canceled,
the licensee shall tender to the client any payments made by the
client and any note or other evidence of indebtedness, including an
itemized statement of all amounts tendered to the client.
(n) The licensee is not entitled to compensation for services
performed prior to cancellation, other than for reimbursement of
moneys paid by the licensee for out-of-pocket emergency expenses for
the client or on behalf of the client. If the licensee seeks
reimbursement from the client for out-of-pocket emergency expenses,
and if the cancellation is made within the first three business days
after the contract was initiated, the licensee shall provide the
client with an itemized statement of those emergency expenses
advanced to the client or on behalf of the client by the licensee.
Nothing in this subdivision shall permit the licensee to recover any
costs, except for out-of-pocket emergency expenses advanced to the
client. Any security interest shall be canceled upon cancellation of
the contract.
(o) Notice of cancellation given by the client need not take the
particular form specified in paragraph (1) of subdivision (f). Notice
of cancellation, however expressed, is effective if it indicates the
intention of the client not to be bound by the contract.
(p) Cancellation occurs when the client gives written notice of
cancellation by certified mail, return receipt requested, or other
form of mailing which provides proof of mailing, to the licensee at
the address specified in the contract.
(q) Notice of cancellation, if given by mail, is effective when
sent by certified mail, return receipt requested, or other form of
mailing which provides proof of mailing, properly addressed with
postage prepaid.
(r) Until the licensee has complied with this section, the client
may cancel the contract.
(s) The contracts shall be executed in duplicate. The licensee
shall retain one original contract, and shall provide the insured
with an original contract.
(t) The licensee shall provide the client with an original
contract and notice of cancellation at the time the client signs the
contract.
(u) Any confession of judgment or waiver of the provisions of this
chapter shall be deemed contrary to public policy and shall be void
and unenforceable.
(v) Prior to the signing of the contract, the licensee shall
provide the insured with a separate printed disclosure document in
the following form that bears the name and license number of the
licensee:
"DISCLOSURE
There are three types of insurance adjusters that could be
involved in the processing of your insurance claim. The definitions
of the three types are as follows:
(1) Public adjusters means the insurance adjusters who do not work
for your insurance company. They work for you, the insured, to
assist in the preparation, presentation, and settlement of your
claim. You hire them by signing a contract and agreeing to pay them a
fee or commission based on a percentage of the settlement, or other
method of compensation. Public adjusters are required to be licensed,
bonded, and tested by the State of California to represent your
interest only.
(2) Company adjusters means the insurance adjusters who are
employees of your insurance company. They represent your insurance
company and are paid by your insurance company. They will not charge
you a fee and are not individually licensed or tested by the State of
California.
(3) Independent adjusters means the insurance adjusters who are
hired on a contract basis by your insurance company to represent the
company in the settlement of the claim. They are paid by your
insurance company. They will not charge you a fee.
You have the right, but are not required, to use the services of a
public adjuster in the preparation and handling of your insurance
claim.
Public adjusters cannot solicit your business while the loss is
underway, or between the hours of 6 p.m. and 8 a.m.
Your "Public Adjuster Contract," with a public adjuster
representing you, should clearly indicate the amount of the fee you
will be paying to your public adjuster. Your contract, with this fee
percentage, should be acknowledged by your initials on the "Public
Adjuster Contract." The salary, fee, commission, or other
consideration is to be paid by you (the insured), not the insurance
company (insurer).
You have the right to cancel the contract with your public
adjuster, without any penalty or obligation, within three business
days from the date the contract is signed.
If you cancel the contract with your public adjuster, any money or
other consideration paid by you will be returned within five
business days following the receipt of your cancellation notice, and
any security interest arising out of the transaction will be
canceled.
To cancel the contract with your public adjuster, mail or deliver
by certified mail, return receipt requested, or other form of mailing
which provides proof of mailing, a signed and dated copy of the
cancellation notice, or any other written notice, or send a telegram
to the public adjuster at the address in the contract.
You have the right to, and may, communicate with your insurance
company at any time if you feel the need during the claims process.
If you have any concerns or questions, the officers at the
California Department of Insurance Consumer Hotline are there to help
you. Please call them at 1-800-927-HELP (4357), or
www.insurance.ca.gov."
(w) No later than three business days after the cancellation has
expired, the public adjuster shall notify the insurer, its adjuster,
or its attorney, that he or she has entered into a written contract
with the insured.
(x) If the licensee misrepresents or conceals a material fact from
the insured prior to execution of the contract, the insured is
entitled to rescind the contract without time limit.
15027.1. (a) Notwithstanding subdivision (e) of Section 15027, a
licensee shall not solicit a contract of engagement for residential
properties under this chapter until seven calendar days have elapsed
after the occurrence of a disaster.
(b) Subdivision (a) shall not apply if the licensee is contacted
directly by the insured or the insured's representative.
(c) For the purposes of this section, "disaster" means a
loss-producing event that damages or destroys more than 25 dwellings,
or a "disaster" as that term is defined in subdivision (b) of
Section 1689.14 of the Civil Code.
15027.5. Any person acting as a public adjuster who has executed a
contract as described in Section 15027 is the agent of the insured.
While acting under the authority of such a contract, a public
adjuster may not receive any fees or other consideration, monetary or
otherwise, from either the insured or any other source, in excess of
the amount or percentage provided in the contract. Any compensation
received by the public adjuster from any party or any other source
connected to the claim adjustment, including any contractor, insurer,
or vendor, shall be disclosed by the public adjuster to the insured.
The insured may rescind the contract if the adjuster fails to make
the required disclosure or if the public adjuster's receipt of any
compensation from a third party conflicts with the interests of the
insured.
15028. No person licensed as a public insurance adjuster shall do
any of the following:
(a) Use any misrepresentation to solicit a contract or agreement
to adjust a claim.
(b) Solicit or accept remuneration from, or have a financial
interest in, any salvage, repair or other firm which obtains business
in connection with any claim he or she has a contract or agreement
to adjust.
(c) Advance moneys to any potential client or insured in order to
obtain business.
(d) Offer to pay a fee, commission, or other valuable
consideration, exceeding one hundred dollars ($100), to a person for
referring a loss unless he or she employs that person to so act for
him or her and that person is licensed to act as an adjuster under
the provisions of this chapter.
15028.5. (a) A public insurance adjuster shall maintain a complete
record of each of his or her transactions as a public insurance
adjuster. The records shall include all of the following:
(1) The name of the insured.
(2) The date, location, and amount of the loss.
(3) A copy of the contract between the public insurance adjuster
and the insured.
(4) The name of the insurer and the amount, expiration date, and
number of each policy carried with respect to the loss.
(5) An itemized statement of the recoveries by the insured from
the sources known to the public insurance adjuster.
(6) The total compensation received for the adjustment.
(7) An itemized statement of disbursements made by the public
insurance adjuster from recoveries received on behalf of the insured.
(b) Records shall be maintained for at least five years after the
termination of the transaction with the insured, and shall be open to
examination by the commissioner.
15028.6. All funds received as claim proceeds by any person acting
as a public insurance adjuster are received and held by that person
in his or her fiduciary capacity. Any person who diverts or
appropriates any fiduciary funds for his or her own use is guilty of
theft and punishable for theft as provided by law. Every applicant
for a license to act as a public insurance adjuster shall, as part of
the application, endorse an authorization for disclosure to the
commissioner of all financial records of any fiduciary funds as
defined in this section, pursuant to Section 7473 of the Government
Code. The authorization shall continue in force and effect for so
long as the licensee continues to be licensed by the department.
15028.7. (a) A public adjuster who receives, accepts, or holds any
funds on behalf of an insured towards the settlement of a claim for
loss or damage shall deposit the funds in a non-interest-bearing
escrow or trust account in a financial institution that is insured by
an agency of the federal government in the adjuster's home state or
the state where the loss occurred.
(b) All funds held in an escrow or trust account shall be the
property of the insured and shall be held pursuant to a written
contract signed by the insured and the public adjuster.
(c) A public adjuster who receives any fiduciary funds shall,
within 15 business days of receipt, deposit the funds in the escrow
account and provide a written statement to the insured showing the
amount of funds received and deposited in escrow.
(d) A public adjuster who, after reasonable diligence, is unable
to obtain the endorsements of all payees designated on any bank draft
representing fiduciary funds, or who receives a written statement
from the insured indicating that he or she does not wish to establish
an escrow or trust account, shall be exempt from the requirements of
subdivisions (a) to (c), inclusive.
(e) The endorsement by a payee designated on any bank draft
representing fiduciary funds shall not be construed as a waiver of
any potential right of the payee to dispute the public adjuster's
entitlement to those funds or any portion thereof.
15029. No person shall concurrently hold a license under the
provisions of this chapter and the provisions of Chapter 1
(commencing with Section 14000).
15030. Each licensee shall maintain a record containing that
information relative to his or her employees as may be prescribed by
the commissioner.
15031. (a) A licensee shall not conduct a business under a
fictitious or other business name unless and until he or she has
obtained the written authorization of the commissioner to do so.
(b) The commissioner shall not authorize the use of a fictitious
or other business name that is so similar to that of a public officer
or agency or that used by another licensee that the public may be
confused or misled thereby.
(c) The authorization shall require, as a condition precedent to
the use of a fictitious name, that the licensee comply with Section
1724.5 of this code and Chapter 5 (commencing with Section 17900) of
Part 3 of Division 7 of the Business and Professions Code.
(d) A licensee desiring to conduct his or her business under more
than one fictitious name shall obtain the authorization of the
commissioner in a manner prescribed in this section for the use of
additional fictitious names.
(e) The licensee shall pay a fee of ten dollars ($10) for each
authorization to use an additional fictitious name and for each
change in the use of a fictitious business name. If the original
license is issued in a nonfictitious name and authorization is
requested to have the license reissued in a fictitious business name,
the licensee shall pay a fee of ten dollars ($10) for that
authorization.
15032. Every advertisement by a licensee soliciting or advertising
business shall contain his or her name, address, or license number as
they appear in the records of the commissioner. The commissioner may
adopt regulations defining the term "advertisement" as used in this
section.
15006. (a) No person shall engage in a business regulated by this
chapter, or act or assume to act as, or represent himself or herself
to be, a licensee unless he or she is licensed under this chapter.
Any person who violates this subdivision shall, in addition to any
other penalties provided by law, be liable to the state for a civil
penalty in an amount not exceeding ten thousand dollars ($10,000), or
if that violation is willful, in an amount not exceeding twenty-five
thousand dollars ($25,000). The penalty shall be assessed and
recovered in a civil action brought by the commissioner in a court of
competent jurisdiction in the name of the people of the State of
California.
(b) Any contract for services regulated by this chapter that is
entered into by an insured with any person who is in violation of
subdivision (a) may be voided at the option of the insured, and the
insured shall not be liable for the payment of any past services
rendered, or future services to be rendered, by that person under
that contract or otherwise.
(c) Whenever it appears to the commissioner that any person is
engaging in acts or practices in violation of subdivision (a), the
commissioner may, without any requirement of notice or hearing, issue
and cause to be served upon that person an order requiring that
person to cease and desist immediately from engaging further in those
acts or practices.
(d) Any person who fails to comply fully with an order of the
commissioner issued under subdivision (c) shall be liable to the
state for a civil penalty in an amount not exceeding one hundred
dollars ($100) per day for each and every day that the violation or
failure to comply continues, but in no event to exceed a maximum
amount of five thousand dollars ($5,000). The commissioner shall
collect the amount so payable and may bring an action in a court of
competent jurisdiction in the name of the people of the State of
California to enforce collection. This penalty is in addition to any
other penalties provided by law.
(e) The powers vested in the commissioner by this section are in
addition to any and all other powers and remedies vested in the
commissioner by law, and nothing herein shall be construed as
requiring the commissioner to employ the powers conferred in this
section instead of or as a condition precedent to the exercise of any
other power or remedy vested in the commissioner.
15007. A public insurance adjuster within the meaning of this
chapter is a person who, for compensation, acts on behalf of or aids
in any manner, an insured in negotiating for or effecting the
settlement of a claim or claims for loss or damage under any policy
of insurance covering real or personal property or any person who
advertises, solicits business, or holds himself or herself out to the
public as an adjuster of those claims and any person who, for
compensation, investigates, settles, adjusts, advises, or assists an
insured with reference to claims for those losses on behalf of any
public insurance adjuster.
15008. This chapter does not apply to:
(a) An officer or employee of the United States of America or of
the state or of a political subdivision thereof while the officer or
employee is engaged in the performance of his or her official duties.
(b) A charitable philanthropic society duly incorporated under the
laws of this state which is organized and maintained for the public
good and not for private profit.
(c) An attorney at law in performing his or her duties as an
attorney at law.
(d) Admitted insurers, agents, and insurance brokers licensed by
the state performing duties in connection with insurance transactions
by them.
(e) The legal owner of personal property which has been sold under
a conditional sales agreement or a mortgagee under the terms of a
chattel mortgage.
(f) Any salaried office employee who performs exclusively clerical
and administrative duties attendant to the disposition of the
business regulated by this chapter.
(g) Photographers, estimators, appraisers, engineers, and
arbitrators, who are employed exclusively by a public insurance
adjuster for the purpose of furnishing technical assistance to a
licensed public insurance adjuster.
(h) A private investigator licensed pursuant to Chapter 11.5
(commencing with Section 7512) of Division 3 of the Business and
Professions Code while acting within the scope of that license.
15009. An application for a license under this chapter shall be on
a form prescribed by the commissioner and accompanied by the
application fee provided by this chapter. Every applicant for a
license under this chapter shall comply with the provisions of
Section 1703.
15010. An application shall be verified and shall include all of
the following:
(a) The full name and business address of the applicant.
(b) The name under which the applicant intends to do business.
(c) A statement as to the general nature of the business in which
the applicant intends to engage.
(d) A statement as to the classification or classifications under
which the applicant desires to be qualified.
(e) If the applicant is a person other than an individual, the
full name and resident address of each of its partners, officers, and
directors.
(f) Two recent photographs of the applicant, of the type
prescribed by the commissioner, and two classifiable sets of his or
her fingerprints.
(g) A verified statement of his or her experience qualifications.
(h) Such other information, evidence, statements or documents as
may be required by the commissioner.
15011. Before an application for a license is granted, the
applicant shall meet all of the following:
(a) Be at least 18 years of age.
(b) Be a bona fide resident of the State of California.
(c) Must be of good character and shall not have committed acts or
crimes constituting grounds for denial of licensure under Section
1668 or 1669.
(d) Shall have had sufficient experience, or special education or
training, or both, in the handling of loss claims under insurance
contracts as determined by regulations adopted by the commissioner,
and is competent to transact business and discharge the
responsibilities of a public insurance adjuster in such a manner as
to safeguard the interests of the public.
(e) Must maintain an office in the State of California with public
access during regular business hours.
(f) Pass an exam given by the commissioner in regard to property
loss adjusting.
(g) Post a surety bond executed by a surety company authorized to
do business in this state in the sum of twenty thousand dollars
($20,000).
(h) Comply with any other qualifications as required by the
commissioner.
15012. The license issued by the commissioner shall include, but
not be limited to, adjusting claims for fire and allied coverages,
burglary, flood, and all property claims both real and personal, and
loss of income.
15013. Each applicant for a license as a public insurance adjuster,
except as provided in Section 15014, shall, prior to issuance of the
license, personally take and pass, to the satisfaction of the
commissioner, an examination given by the department as follows:
(a) The examination shall be prescribed by the commissioner and
shall be of sufficient scope reasonably to test the applicant's
knowlege, among other things, of basic insurance theory, essential
elements of contracts, technical competence in the handling of the
various lines for which the applicant is being tested, claims ethics
and knowledge of the Unfair Claims Practices Act, and the duties and
responsibilities of public insurance adjusters under the law.
(b) Such examination shall be given to applicants under the
supervision of the department of this state, and shall be in written
form.
(c) The commissioner shall, within a reasonable period of time,
not to exceed 30 days, transmit the results of the examination and
action taken on the application to the applicant.
(d) In the event an applicant, who is otherwise qualified, fails
the examination, the commissioner may administer a reexamination,
after a waiting period not to exceed six months.
(e) The examination shall be given at those times and places
within the state as the commissioner deems reasonably necessary to
serve the convenience of the department and applicants.
15015. Payment of the application fee prescribed by this chapter
entitles the applicant to one examination without further charge. If
the person fails to pass the examination, he or she shall not be
eligible for any subsequent examination except upon payment of the
reexamination fee prescribed by this chapter for each subsequent
examination.
15016. (a) The commissioner shall issue an interim license to all
qualified individuals for the purpose of training so long as the
persons meet all of the following requirements:
(1) Are employed and under the direct supervision of a person
licensed under the provisions of this chapter.
(2) Qualify under the applicable provisions of Section 15011.
(3) Pay a license fee of one hundred dollars ($100).
(4) Comply with any other qualifications required by the
commissioner.
(b) An interim license may be issued for a period not to exceed
one year and may not be renewed.
15017. A nonresident license shall be issued by the commissioner to
qualified persons who meet the requirements of this chapter as set
forth in subdivisions (a), (c), (d), (e), (f), (g), and (h) of
Section 15011 and who have appointed the commissioner as an agent for
service of process in this state.
15018. After a hearing, the commissioner may deny a license unless
the applicant makes a showing satisfactory to the commissioner that
the applicant has not:
(a) Committed any acts or crimes constituting grounds for denial
of license under Section 1668.
(b) Been refused a license under this chapter or had a license
revoked.
(c) While unlicensed, committed, aided or abetted the commission
of any acts for which a license is required in this chapter.
(d) Been convicted of any crime or wrongdoings in connection with
this license.
15018.5. The commissioner may, without hearing, deny an application
if the applicant has committed any act or been convicted of a crime
constituting grounds for denial of license under Section 1669.
15019. Whenever a hearing is held under this chapter to determine
whether an applicant for a license should be granted or to determine
the qualifications of a licensee, the proceeding shall be conducted
in accordance with Chapter 5 (commencing with Section 11501) of Part
1 of Division 3 of Title 2 of the Government Code, and the
commissioner shall have all the powers granted therein.
15020. The form and content of the license shall be determined by
the commissioner in accordance with Section 164 of the Business and
Professions Code.
15021. The license shall at all times be posted in a conspicuous
place in the principal place of business of the licensee.
15022. Upon the issuance of a license, a pocket card of that size,
design, and content as may be determined by the commissioner shall be
issued without charge to each licensee.
15023. A license issued under this chapter is not assignable.
15024. Each licensee shall file with the commissioner the complete
address of his or her principal place of business including the name
and number of the street, or if the street where the business is
located is not numbered, the number of the post office box. The
commissioner may require the filing of other information for the
purposes of indentifying that principal place of business.
15025. A licensee shall within 30 days of the change notify the
department of any change of his or her address. The principal place
of business may be at home or at a business address but it shall be
the place at which the licensee maintains a permanent office.
15026. A licensee shall not advertise or conduct business from any
location other than that shown on the records of the commissioner as
his or her principal place of business unless he or she has received
a branch office certificate for that location after compliance with
the provisions of this chapter and those additional requirements
necessary for the protection of the public as the commissioner may by
regulation prescribe. A licensee shall notify the commissioner in
writing within 10 days of closing or changing the location of a
branch office.
15027. (a) No licensee shall, directly or indirectly, act within
this state as a public insurance adjuster without having first
entered into a contract, in writing, on a form approved by the
insurance commissioner and executed in duplicate by the public
adjuster and the insured or a duly authorized representative. One
original contract shall be kept on file by the licensee, available at
all times for inspection, without notice, by the commissioner or his
or her duly authorized representative, and one original contract
shall be given to the insured.
(b) The written contract between the licensee and the insured
shall contain each of the following:
(1) Title of "Public Adjuster Contract."
(2) The name, business name, license number, telephone number, and
address of the licensee.
(3) The name and address of the insured.
(4) A description of the loss and its location, if applicable.
(5) The name of the insurer and the policy number, if known.
(6) The full salary, fee, commission, or other consideration the
licensee is to receive for services under the contract.
(7) A description of the services to be provided to the insured.
(8) Signatures of the licensee and the insured.
(9) The date the contract was signed by the licensee and the date
the contract was signed by the insured.
(10) The following statement: "As a public adjuster, I am required
by the California Insurance Code to post a surety bond in the sum of
$20,000 to cover certain kinds of claims made by you, the insured.
If you have any questions concerning the surety bond, you may contact
the California Department of Insurance Producer Licensing Call
Center at 1-800-967-9331 or www.insurance.ca.gov."
(11) A statement of the compensation to the licensee, including
the percentage and base to which the percentage applies.
(12) A statement that the insured has the right to rescind the
contract within three business days of signing it.
(c) A contract covered by this section shall not contain a
contract term that does any of the following:
(1) Allows the licensee's fee to be collected when money is due
from an insurer, but not paid, or allows a licensee to collect the
entire fee from the first payment issued by an insurer, rather than
as a percentage of each payment issued by an insurer.
(2) Requires the insured to authorize an insurer to issue a
payment only in the name of the licensee.
(3) Imposes late fees or collection costs on the insured.
(d) No licensee shall solicit or attempt to solicit a client for
employment during the progress of a loss-producing occurrence.
(e) No licensee or any other person or entity offering, for a fee,
service regulated by this chapter shall solicit a client for
employment or initiate any contact with a policyholder between the
hours of 6 p.m. and 8 a.m.
(f) No licensee shall use any form of contract other than that
approved by the commissioner and which contains each of the
following:
(1) A provision allowing the client to rescind the contract by
written notice sent or delivered by certified mail, return receipt
requested, or other form of mailing which provides proof of mailing,
to the licensee by midnight of the third business day after the day
on which the client signs a contract which complies with this
section. Each copy of the contract shall contain a completed form,
captioned "Notice of Cancellation," which shall be placed at the end
of the contract and be separated from the remainder of the contract
by a printed line. Nothing shall be printed on the reverse side of
the notice form. The notice form shall be completed by the licensee,
and shall contain in type of at least 10-point the following
statement written in the same language, e.g., Spanish, as used in the
contract:
Notice of Cancellation
_____________________________
(Date of Contract)
You may cancel this contract within three business days from the
above date without any penalty or obligation to pay your public
adjuster, other than for reimbursement of moneys paid by your public
adjuster for out-of-pocket emergency expenses for you or on your
behalf. If your public adjuster seeks reimbursement from you for
out-of-pocket emergency expenses, your public adjuster shall provide
you with an itemized statement of those emergency expenses advanced
to you or on your behalf if the cancellation is made within the first
three business days after the contract was initiated. Nothing in
this contract permits your public adjuster to recover any costs,
except for out-of-pocket emergency expenses advanced to you.
If you cancel, any money or other consideration paid by you will
be returned within five business days following the receipt of your
cancellation notice, and any security interest arising out of the
transaction will be canceled.
To cancel this contract, mail or deliver by certified mail, return
receipt requested, or other form of mailing which provides proof of
mailing, a signed and dated copy of this cancellation notice, or any
other written notice, or send a telegram to:
__________________________________________________
(name of public adjuster)
at
__________________________________________________
(address of public adjuster's place of business)
not later than midnight of________________________
(Date)
I hereby cancel this contract_____________________
(Date)
__________________________________________________
(Client's signature)
(2) The statement "WE REPRESENT THE INSURED ONLY" prominently
displayed in at least 10-point type.
(3) A provision disclosing the percentage of the insured's claim,
or other fee, that the licensee will charge for his or her services.
The licensee shall obtain the initials of the insured next to this
provision.
(4) A conspicuous statement in at least 10-point type in immediate
proximity to the space reserved for the client's signature, as
follows: "You may cancel this contract at any time before midnight of
the third business day after the date of this contract. See the
notice of cancellation form at the end of this contract for an
explanation of this right."
(g) No licensee shall knowingly make any false report to his or
her employer or divulge to any other person, except as he or she may
be required by law to do so, any information acquired by him or her
except at the direction of the employer or a client for whom the
information is obtained.
(h) No licensee shall use a badge in connection with the official
activities of the licensee's business.
(i) No licensee shall permit an employee or agent in his or her
own name to advertise, engage clients, furnish reports, or present
bills to clients, or in any manner whatever to conduct business for
which a license is required under this chapter.
(j) Pursuant to subdivisions (a) and (c) of Section 15006, the
commissioner shall have the authority to enforce the provisions of
this chapter and prosecute violations thereunder committed by
unlicensed persons or entities that hold themselves out or act as
public insurance adjusters.
(k) For purposes of this section, "business day" shall have the
same meaning given to that term in subdivision (e) of Section 1689.5
of the Civil Code, as in effect on the operative date of this
statute.
(l) The contract and the notice of cancellation set forth in
paragraph (1) of subdivision (f) shall be written in the same
language, e.g., Spanish, as principally used in the negotiation of
the contract.
(m) Within five business days after a contract has been canceled,
the licensee shall tender to the client any payments made by the
client and any note or other evidence of indebtedness, including an
itemized statement of all amounts tendered to the client.
(n) The licensee is not entitled to compensation for services
performed prior to cancellation, other than for reimbursement of
moneys paid by the licensee for out-of-pocket emergency expenses for
the client or on behalf of the client. If the licensee seeks
reimbursement from the client for out-of-pocket emergency expenses,
and if the cancellation is made within the first three business days
after the contract was initiated, the licensee shall provide the
client with an itemized statement of those emergency expenses
advanced to the client or on behalf of the client by the licensee.
Nothing in this subdivision shall permit the licensee to recover any
costs, except for out-of-pocket emergency expenses advanced to the
client. Any security interest shall be canceled upon cancellation of
the contract.
(o) Notice of cancellation given by the client need not take the
particular form specified in paragraph (1) of subdivision (f). Notice
of cancellation, however expressed, is effective if it indicates the
intention of the client not to be bound by the contract.
(p) Cancellation occurs when the client gives written notice of
cancellation by certified mail, return receipt requested, or other
form of mailing which provides proof of mailing, to the licensee at
the address specified in the contract.
(q) Notice of cancellation, if given by mail, is effective when
sent by certified mail, return receipt requested, or other form of
mailing which provides proof of mailing, properly addressed with
postage prepaid.
(r) Until the licensee has complied with this section, the client
may cancel the contract.
(s) The contracts shall be executed in duplicate. The licensee
shall retain one original contract, and shall provide the insured
with an original contract.
(t) The licensee shall provide the client with an original
contract and notice of cancellation at the time the client signs the
contract.
(u) Any confession of judgment or waiver of the provisions of this
chapter shall be deemed contrary to public policy and shall be void
and unenforceable.
(v) Prior to the signing of the contract, the licensee shall
provide the insured with a separate printed disclosure document in
the following form that bears the name and license number of the
licensee:
"DISCLOSURE
There are three types of insurance adjusters that could be
involved in the processing of your insurance claim. The definitions
of the three types are as follows:
(1) Public adjusters means the insurance adjusters who do not work
for your insurance company. They work for you, the insured, to
assist in the preparation, presentation, and settlement of your
claim. You hire them by signing a contract and agreeing to pay them a
fee or commission based on a percentage of the settlement, or other
method of compensation. Public adjusters are required to be licensed,
bonded, and tested by the State of California to represent your
interest only.
(2) Company adjusters means the insurance adjusters who are
employees of your insurance company. They represent your insurance
company and are paid by your insurance company. They will not charge
you a fee and are not individually licensed or tested by the State of
California.
(3) Independent adjusters means the insurance adjusters who are
hired on a contract basis by your insurance company to represent the
company in the settlement of the claim. They are paid by your
insurance company. They will not charge you a fee.
You have the right, but are not required, to use the services of a
public adjuster in the preparation and handling of your insurance
claim.
Public adjusters cannot solicit your business while the loss is
underway, or between the hours of 6 p.m. and 8 a.m.
Your "Public Adjuster Contract," with a public adjuster
representing you, should clearly indicate the amount of the fee you
will be paying to your public adjuster. Your contract, with this fee
percentage, should be acknowledged by your initials on the "Public
Adjuster Contract." The salary, fee, commission, or other
consideration is to be paid by you (the insured), not the insurance
company (insurer).
You have the right to cancel the contract with your public
adjuster, without any penalty or obligation, within three business
days from the date the contract is signed.
If you cancel the contract with your public adjuster, any money or
other consideration paid by you will be returned within five
business days following the receipt of your cancellation notice, and
any security interest arising out of the transaction will be
canceled.
To cancel the contract with your public adjuster, mail or deliver
by certified mail, return receipt requested, or other form of mailing
which provides proof of mailing, a signed and dated copy of the
cancellation notice, or any other written notice, or send a telegram
to the public adjuster at the address in the contract.
You have the right to, and may, communicate with your insurance
company at any time if you feel the need during the claims process.
If you have any concerns or questions, the officers at the
California Department of Insurance Consumer Hotline are there to help
you. Please call them at 1-800-927-HELP (4357), or
www.insurance.ca.gov."
(w) No later than three business days after the cancellation has
expired, the public adjuster shall notify the insurer, its adjuster,
or its attorney, that he or she has entered into a written contract
with the insured.
(x) If the licensee misrepresents or conceals a material fact from
the insured prior to execution of the contract, the insured is
entitled to rescind the contract without time limit.
15027.1. (a) Notwithstanding subdivision (e) of Section 15027, a
licensee shall not solicit a contract of engagement for residential
properties under this chapter until seven calendar days have elapsed
after the occurrence of a disaster.
(b) Subdivision (a) shall not apply if the licensee is contacted
directly by the insured or the insured's representative.
(c) For the purposes of this section, "disaster" means a
loss-producing event that damages or destroys more than 25 dwellings,
or a "disaster" as that term is defined in subdivision (b) of
Section 1689.14 of the Civil Code.
15027.5. Any person acting as a public adjuster who has executed a
contract as described in Section 15027 is the agent of the insured.
While acting under the authority of such a contract, a public
adjuster may not receive any fees or other consideration, monetary or
otherwise, from either the insured or any other source, in excess of
the amount or percentage provided in the contract. Any compensation
received by the public adjuster from any party or any other source
connected to the claim adjustment, including any contractor, insurer,
or vendor, shall be disclosed by the public adjuster to the insured.
The insured may rescind the contract if the adjuster fails to make
the required disclosure or if the public adjuster's receipt of any
compensation from a third party conflicts with the interests of the
insured.
15028. No person licensed as a public insurance adjuster shall do
any of the following:
(a) Use any misrepresentation to solicit a contract or agreement
to adjust a claim.
(b) Solicit or accept remuneration from, or have a financial
interest in, any salvage, repair or other firm which obtains business
in connection with any claim he or she has a contract or agreement
to adjust.
(c) Advance moneys to any potential client or insured in order to
obtain business.
(d) Offer to pay a fee, commission, or other valuable
consideration, exceeding one hundred dollars ($100), to a person for
referring a loss unless he or she employs that person to so act for
him or her and that person is licensed to act as an adjuster under
the provisions of this chapter.
15028.5. (a) A public insurance adjuster shall maintain a complete
record of each of his or her transactions as a public insurance
adjuster. The records shall include all of the following:
(1) The name of the insured.
(2) The date, location, and amount of the loss.
(3) A copy of the contract between the public insurance adjuster
and the insured.
(4) The name of the insurer and the amount, expiration date, and
number of each policy carried with respect to the loss.
(5) An itemized statement of the recoveries by the insured from
the sources known to the public insurance adjuster.
(6) The total compensation received for the adjustment.
(7) An itemized statement of disbursements made by the public
insurance adjuster from recoveries received on behalf of the insured.
(b) Records shall be maintained for at least five years after the
termination of the transaction with the insured, and shall be open to
examination by the commissioner.
15028.6. All funds received as claim proceeds by any person acting
as a public insurance adjuster are received and held by that person
in his or her fiduciary capacity. Any person who diverts or
appropriates any fiduciary funds for his or her own use is guilty of
theft and punishable for theft as provided by law. Every applicant
for a license to act as a public insurance adjuster shall, as part of
the application, endorse an authorization for disclosure to the
commissioner of all financial records of any fiduciary funds as
defined in this section, pursuant to Section 7473 of the Government
Code. The authorization shall continue in force and effect for so
long as the licensee continues to be licensed by the department.
15028.7. (a) A public adjuster who receives, accepts, or holds any
funds on behalf of an insured towards the settlement of a claim for
loss or damage shall deposit the funds in a non-interest-bearing
escrow or trust account in a financial institution that is insured by
an agency of the federal government in the adjuster's home state or
the state where the loss occurred.
(b) All funds held in an escrow or trust account shall be the
property of the insured and shall be held pursuant to a written
contract signed by the insured and the public adjuster.
(c) A public adjuster who receives any fiduciary funds shall,
within 15 business days of receipt, deposit the funds in the escrow
account and provide a written statement to the insured showing the
amount of funds received and deposited in escrow.
(d) A public adjuster who, after reasonable diligence, is unable
to obtain the endorsements of all payees designated on any bank draft
representing fiduciary funds, or who receives a written statement
from the insured indicating that he or she does not wish to establish
an escrow or trust account, shall be exempt from the requirements of
subdivisions (a) to (c), inclusive.
(e) The endorsement by a payee designated on any bank draft
representing fiduciary funds shall not be construed as a waiver of
any potential right of the payee to dispute the public adjuster's
entitlement to those funds or any portion thereof.
15029. No person shall concurrently hold a license under the
provisions of this chapter and the provisions of Chapter 1
(commencing with Section 14000).
15030. Each licensee shall maintain a record containing that
information relative to his or her employees as may be prescribed by
the commissioner.
15031. (a) A licensee shall not conduct a business under a
fictitious or other business name unless and until he or she has
obtained the written authorization of the commissioner to do so.
(b) The commissioner shall not authorize the use of a fictitious
or other business name that is so similar to that of a public officer
or agency or that used by another licensee that the public may be
confused or misled thereby.
(c) The authorization shall require, as a condition precedent to
the use of a fictitious name, that the licensee comply with Section
1724.5 of this code and Chapter 5 (commencing with Section 17900) of
Part 3 of Division 7 of the Business and Professions Code.
(d) A licensee desiring to conduct his or her business under more
than one fictitious name shall obtain the authorization of the
commissioner in a manner prescribed in this section for the use of
additional fictitious names.
(e) The licensee shall pay a fee of ten dollars ($10) for each
authorization to use an additional fictitious name and for each
change in the use of a fictitious business name. If the original
license is issued in a nonfictitious name and authorization is
requested to have the license reissued in a fictitious business name,
the licensee shall pay a fee of ten dollars ($10) for that
authorization.
15032. Every advertisement by a licensee soliciting or advertising
business shall contain his or her name, address, or license number as
they appear in the records of the commissioner. The commissioner may
adopt regulations defining the term "advertisement" as used in this
section.
