State Codes and Statutes

Statutes > California > Ins > 1758.9-1758.994

INSURANCE CODE
SECTION 1758.9-1758.994



1758.9.  No person shall sell or solicit any form of credit
insurance in this state, and receive a commission for their efforts,
unless that person is licensed as an insurance agent or broker
pursuant to Article 3 (commencing with Section 1631) or is licensed
as a credit insurance agent or endorsee under this article.




1758.91.  The commissioner may issue to an applicant that has
complied with the requirements of this article, a credit insurance
agent license to offer or sell those types of insurance specified in
Section 1758.96 in connection with, and incidental to, a loan or
extension of credit, on behalf of any insurer authorized to write
those types of insurance in this state.



1758.92.  (a) An applicant for a credit insurance agent license
under this article shall submit each of the following to the
commissioner:
   (1) A written application for licensure signed by the applicant or
an officer of the applicant, in the form prescribed by the
commissioner.
   (2) A certificate by the insurer that is to be named in the credit
insurance agent license, stating that the insurer has satisfied
itself that the named applicant is trustworthy and competent to act
as its insurance agent limited to this purpose and that the insurer
will appoint the applicant to act as its agent in reference to
selling or soliciting the kind or kinds of insurance that are
permitted by this article, if the credit insurance agent license
applied for is issued by the commissioner. The certification shall be
subscribed by an officer or managing agent of the insurer on a form
prescribed by the commissioner.
   (3) An application fee, and each license period thereafter, a
renewal fee, in an amount or amounts determined by the department as
sufficient to defray the department's actual costs of processing the
application or renewal and implementing this article.
   The limitation on fee increases of 10 percent without prior
approval of the Legislature set forth in Section 12978 shall not
apply to the application or renewal fee set forth in this subdivision
during the years 2002, 2003, and 2004.
   (b) Notwithstanding any other provision of law to the contrary,
the provisions set forth in Sections 1667, 1668, 1668.5, 1669, 1670,
1720, 1738, and 1739 apply to any application for or issuance of a
license, or any application for or approval of an endorsee, pursuant
to this article.
   (c) (1) Not less than 60 days before a permanent license will
expire, the commissioner may use an electronic delivery method,
including e-mail or other similar electronic method of delivery, to
deliver, or may mail, to the latest e-mail or mailing address
appearing on his or her records, an application to the licensee to
renew the license for the appropriate succeeding license period. It
is the licensee's responsibility to renew whether or not a renewal
application is received. The commissioner may accept a late renewal
without penalty, provided the licensee's failure to comply is due to
a clerical error or inadvertence on the part of the department.
   (2) An application for renewal shall be filed on or before the
expiration date.
   (3) The application for renewal of an expired license may be filed
after the expiration date and until that same month and date of the
next succeeding year. A licensee who files a renewal application
after the license has expired shall be charged, in addition to the
renewal fee, a penalty of 50 percent of the renewal fee for the
credit insurance agent license and all endorsees.
   (d) Costs associated with any enforcement action or investigation
shall be paid for by the person or organization licensed pursuant to
this article.



1758.93.  (a) An employee of an organization that has been issued a
credit insurance agent license pursuant to this article may be an
endorsee on the license if all of the following conditions have been
met:
   (1) The employee is 18 years of age or older.
   (2) The employee submits an application to the department that
includes a signed affidavit, in a form prescribed by the
commissioner, stating the applicant has read the credit insurance
training material submitted to the commissioner and that the
applicant has received from the organization training in, and is
knowledgeable about, the credit insurance products to be sold,
ethics, and market practices.
   (3) The employee submits an application fee, and each year
thereafter, a renewal fee, in an amount or amounts determined by the
department as sufficient to defray the department's actual costs of
processing the application or renewal and implementing this article.
   (b) Prior to allowing any endorsee to offer or sell credit-related
insurance, the licensed organization shall provide training to each
endorsee about the credit insurance products to be sold, and shall
submit annually to the department the names of endorsees and a
statement of compliance with this article. Training materials used by
the organization to train endorsees shall be submitted to the
department at the time the organization applies for its credit
insurance agent license, and each year thereafter when that license
is renewed. Any changes to previously submitted training materials
shall be submitted to the department with the changes highlighted 30
days prior to their use by the licensee. Training materials and
changes to those materials submitted to the department pursuant to
this subdivision shall be deemed approved for use by the company
unless it is notified by the department to the contrary. Failure by a
credit insurance licensee to submit training materials or changes
for departmental review or use of unapproved or disapproved training
materials shall constitute grounds for denial of an application for a
license, nonrenewal of a license, or suspension of a license, as
appropriate.
   (c) The credit insurance agent shall periodically retrain its
endorsees.


1758.94.  (a) The manager at each business location of an
organization licensed as a credit insurance agent, shall be listed as
an endorsee on the organization's license and shall be responsible
for the training and supervision of each additional endorsee at that
location. Each licensee shall identify the endorsee who is the
manager at each location for the purposes of this article.
   (b) An employee of a credit insurance agent who complies with the
requirements of Section 1758.93, and is endorsed on the license of
the credit insurance agent, may act on behalf of, and under the
supervision of, the credit insurance agent in matters relating to
transacting insurance under that agent's license. The conduct of an
endorsee of a credit insurance agent acting within the scope of
employment or agency shall be deemed the conduct of the credit
insurance agent for purposes of this article.



1758.95.  (a) If a licensee or endorsee violates any provision of
this article or any other provision of this code, the commissioner
may do either of the following:
   (1) After notice and hearing, suspend or revoke the license of the
credit insurance agent.
   (2) After notice and hearing, impose other penalties that the
commissioner deems necessary and convenient to carry out the purposes
of this code, including suspending the privilege of transacting
credit insurance pursuant to this article at specific business
locations where violations have occurred, imposing fines on the
credit insurance agent, individual endorsees or endorsee managers,
and suspending or revoking the endorsement of a named endorsee or
endorsee manager.
   (b) If any person sells insurance in connection with or incidental
to a loan or other extension of credit or holds himself or herself
or an organization out as a credit insurance agent without obtaining
the license required by this article, as being an endorsee when that
person is not an endorsee, or as being licensed pursuant to Chapter 5
(commencing with Section 1631) without obtaining that license, the
commissioner may issue a cease and desist order pursuant to Section
12921.8.
   (c) Notwithstanding any other provision of law to the contrary,
the provisions of Section 1748.5 are applicable to both the
organization issued a license pursuant to this article and any
endorsee to that license.



1758.96.  A person licensed pursuant to this article may act as a
credit insurance agent for an authorized insurer only with respect to
the kinds of insurance specified in this section sold in connection
with and incidental to a loan or other extension of credit other than
a loan in excess of sixty thousand dollars ($60,000) relating to or
secured by real property where the repayment period does not exceed
10 years. The sale of credit insurance products as specified in this
section in excess of sixty thousand dollars ($60,000) relating to or
secured by real property where any compensation, fee, or commission
is paid dependent on the placement of credit insurance, requires a
license to act as an insurance agent or life agent pursuant to
Section 1621 or 1622.
   (a) Credit life insurance.
   (b) Credit disability insurance.
   (c) Credit involuntary unemployment insurance or credit
loss-of-income insurance.
   (d) Credit property insurance.
   (e) Guaranteed automobile protection (GAP) insurance.
   (f) Any other form of insurance declared by the commissioner to be
subject to this section pursuant to subdivision (d) of Section
1758.992.



1758.97.  A credit insurance agent shall not sell or offer to sell
insurance pursuant to this article unless all of the following
conditions are satisfied:
   (a) The credit insurance agent provides brochures or other written
materials to the prospective purchaser that do all of the following:
   (1) Summarize the material terms and conditions of coverage
offered, including the identity of the insurer.
   (2) Describe the process for filing a claim, including a toll-free
telephone number to report a claim.
   (3) Disclose any additional information on the price, benefits,
exclusions, conditions, or other limitations of those policies that
the commissioner may by rule prescribe.
   (b) The credit insurance agent makes all of the following
disclosures, either with or as part of each individual policy or
group certificate, or with a notice of proposed insurance, or, if the
insurance is sold at the same time and place as the related credit
transaction, in a statement acknowledged by the purchaser in writing
on a separate form, electronically, digitally, or by audio recording:
   (1) That the purchase of the kinds of insurance prescribed in this
article is not required in order to secure the loan or an extension
of credit.
   (2) That the insurance coverage offered by the credit insurance
agent may provide a duplication of coverage already provided by a
purchaser's other personal insurance policies or by another source of
coverage.
   (3) That the endorsee is not qualified or authorized to evaluate
the adequacy of the purchaser's existing coverages, unless the
individual is licensed pursuant to Article 3 (commencing with Section
1631).
   (4) That the customer may cancel the insurance at any time. If the
customer cancels within 30 days from the delivery of the insurance
policy, certificate, or notice of proposed insurance, the premium
will be refunded in full. If the customer cancels at any time
thereafter, any unearned premium will be refunded in accordance with
applicable law.
   (c) Evidence of coverage is provided to every person who elects to
purchase that coverage.
   (d) Costs for the insurance are separately itemized in any loan,
credit, or retail agreement.
   (e) The insurance is provided under an individual policy issued to
the purchaser or under a group or master policy issued to the
organization licensed as a credit insurance agent by an insurer
authorized to transact the applicable kinds or types of insurance in
this state. Any of the conditions and disclosures specified in this
section shall be deemed satisfied if the consumer is otherwise
provided with the information required in this section by any other
disclosures required by existing federal or state law or regulations.
   No statement, disclosure, or notice made for the purpose of
compliance with this section shall be construed to cause the policy
form, certificate of insurance, or notice of proposed insurance, by
themselves, to be considered nonstandard forms, as described in
Article 6.9 (commencing with Section 2249) of Subchapter 2 of Chapter
5 of Title 10 of the California Code of Regulations.




1758.98.  Under the authority of the credit insurance agent license,
a credit insurance agent shall not do any of the following:
   (a) Offer to sell insurance except in conjunction with, and
incidental to, a loan or extension of credit.
   (b) Advertise, represent, or otherwise portray itself or its
employees, agents, or endorsees as licensed insurers, life agents, or
fire and casualty broker-agents.
   (c) Pay any unlicensed person any compensation, fee, or commission
dependent on the placement of insurance under the agent's license.
Nothing in this subdivision shall prohibit production payments or
incentive payments to an endorsee.



1758.99.  An organization licensed as a credit insurance agent shall
prominently display its license number and the department's toll
free consumer hot line telephone number on brochures and information
sheets required by this article and on any evidence of insurance.



1758.991.  Any insurer that provides insurance to be sold by an
organization licensed as a credit insurance agent shall file a copy
of any individual policy issued to a purchaser, or any policy or
certificate issued under a group or master policy to an organization
licensed as a credit agent, with the commissioner, who shall make
that policy available to the public.



1758.992.  As used in this article, the following definitions have
the following meanings:
   (a) "Enrollment" means the process of soliciting or accepting
enrollments or applications from a debtor under a credit insurance
policy, which includes informing the debtor of the availability of
coverage, calculating the insurance charge, preparing and delivering
the certificate of insurance or notice of proposed insurance,
answering questions regarding the coverage, or otherwise assisting
the debtor in making an informed decision whether or not to elect to
purchase credit insurance.
   (b) "Creditor" means a lender of money or a vendor or lessor of
goods, services, property, rights, or privileges, for which payment
is arranged through a credit transaction, or any successor to the
right, title, or interest of that lender, vendor, or lessor, and any
affiliate, associate, subsidiary, subcontractor, director, officer,
or employee of any of them or any other person in any way associated
with any of them.
   (c) "Credit insurance agent license" means an agent license issued
to an individual or organization for the enrollment and sale of
credit insurance.
   (d) "Credit insurance" includes credit life insurance, credit
disability insurance, credit involuntary unemployment insurance,
credit loss-of-income insurance, credit property insurance, or
guaranteed automobile protection (GAP) insurance.
   Credit insurance also includes any other form of insurance offered
in connection with an extension of credit that is limited to
partially or wholly extinguishing that credit obligation that the
commissioner determines should be designated a form of credit
insurance.
   The commissioner may adopt, pursuant to Chapter 3.5 (commencing
with Section 11340) of Part 1 of Division 3 of Title 2 of the
Government Code, reasonable rules and regulations necessary to carry
out this subdivision.
   (e) (1) "Credit life insurance" means insurance on the life of a
debtor pursuant to or in connection with a specific loan or other
credit transaction, exclusive of any insurance procured at no expense
to the debtor. Insurance shall be deemed procured at no expense to
the debtor unless the cost of the credit transaction to the debtor
varies depending on whether or not the insurance is procured.
   (2) "Credit disability insurance" means insurance on a debtor to
provide indemnity for payments becoming due on a specific loan or
other credit transaction while the debtor is disabled, as defined in
the policy, exclusive of any insurance procured at no expense to the
debtor. Insurance shall be deemed to have been procured at no expense
to the debtor unless the cost of the credit transaction to the
debtor varies depending on whether or not the insurance is procured.
   (f) "Credit involuntary unemployment insurance" or "credit
loss-of-income insurance" means insurance issued to provide indemnity
for payments becoming due on a specific loan or other credit
transaction while the debtor is involuntarily unemployed, as defined
in the policy.
   (g) "Credit property insurance" means insurance that provides
coverage (1) on personal property pledged or offered as collateral
for securing a personal or consumer loan, or (2) on personal property
purchased under an installment sales agreement or through a consumer
credit transaction, but does not include any insurance that provides
theft, collision, liability, property damage, or comprehensive
insurance coverage in any automobile or any other self-propelled
vehicle that is designed primarily for operation in the air or on the
highways, waterways, or sea, and its operating equipment, or that is
necessitated by reason of the liability imposed by law for damages
arising out of the ownership, operation, maintenance, or use of those
vehicles. However, that excluded insurance does include single
interest coverage on any of those vehicles that insures the interest
of the creditor in the same manner as collateral secures a loan.
   (h) (1) "Guaranteed automobile protection" (GAP) insurance means
insurance in which a person agrees to indemnify a vehicle purchaser
or lessee for any of the difference between the actual cash value of
the insured's vehicle at the time of an unrecovered theft or total
loss and the amount owed on the vehicle pursuant to the terms of a
loan, lease agreement, or installment sales contract used to purchase
or lease the vehicle. GAP insurance may also include a promise to
pay up to five thousand dollars ($5,000) to an insured, in addition
to the sum needed to indemnify the insured for the difference between
the actual cash value and the outstanding debt, to purchase or lease
another vehicle.
   (2) GAP insurance does not include, and no insurance license of
any type under this code is required to offer, any of the following:
   (A) A promise contained in a conditional sales contract for the
sale of a vehicle by a licensed motor vehicle dealer or a promise
contained in a lease agreement for the lease of a vehicle by a
licensed motor vehicle dealer or leasing company to waive all or a
portion of the difference between the actual cash value of the
insured's vehicle at the time of an unrecovered theft or total loss
and the amount owed on the vehicle pursuant to the terms of a loan,
lease agreement, or installment sales contract used to purchase or
lease the vehicle.
   (B) A promise by a lender as part of a debt obligation to purchase
or lease a vehicle in which the lender agrees to waive all or a
portion of the difference between the actual cash value of the
insured's vehicle at the time of an unrecovered theft or total loss
and the amount owed on the vehicle pursuant to the terms of a loan,
lease agreement, or installment sales contract used to purchase or
lease the vehicle.
   (C) Coverage under subparagraphs (A) and (B) may not include a
promise to pay money to a vehicle purchaser or lessee in addition to
waiving the difference between the actual cash value and the amount
owed. For purposes of this paragraph, a promise to pay money does not
include, and a dealer shall be allowed to offer, a discount or
credit provided to a consumer as an incentive for purchasing or
leasing a new vehicle if the consumer is required to use the discount
or credit on a purchase or lease from the dealer that sold or leased
the original vehicle to the consumer.



1758.993.  Nothing in this article regulating the sale of credit
insurance shall be construed to impair or impede the application of
any other law regulating the sale of credit insurance, including, but
not limited to, the California Finance Lenders Law, Division 9
(commencing with Section 22000) of the Financial Code.




1758.994.  The commissioner shall submit a report to the Legislature
by June 30, 2004, regarding the effectiveness of this article in
protecting consumers involved in credit insurance transactions. This
report shall include, but not be limited to, the number and
categories of licensees licensed pursuant to this article, the number
and nature of enforcement actions related to credit insurance
licensing or marketing issues, and any needed legislative reforms
recommended by the commissioner.


State Codes and Statutes

Statutes > California > Ins > 1758.9-1758.994

INSURANCE CODE
SECTION 1758.9-1758.994



1758.9.  No person shall sell or solicit any form of credit
insurance in this state, and receive a commission for their efforts,
unless that person is licensed as an insurance agent or broker
pursuant to Article 3 (commencing with Section 1631) or is licensed
as a credit insurance agent or endorsee under this article.




1758.91.  The commissioner may issue to an applicant that has
complied with the requirements of this article, a credit insurance
agent license to offer or sell those types of insurance specified in
Section 1758.96 in connection with, and incidental to, a loan or
extension of credit, on behalf of any insurer authorized to write
those types of insurance in this state.



1758.92.  (a) An applicant for a credit insurance agent license
under this article shall submit each of the following to the
commissioner:
   (1) A written application for licensure signed by the applicant or
an officer of the applicant, in the form prescribed by the
commissioner.
   (2) A certificate by the insurer that is to be named in the credit
insurance agent license, stating that the insurer has satisfied
itself that the named applicant is trustworthy and competent to act
as its insurance agent limited to this purpose and that the insurer
will appoint the applicant to act as its agent in reference to
selling or soliciting the kind or kinds of insurance that are
permitted by this article, if the credit insurance agent license
applied for is issued by the commissioner. The certification shall be
subscribed by an officer or managing agent of the insurer on a form
prescribed by the commissioner.
   (3) An application fee, and each license period thereafter, a
renewal fee, in an amount or amounts determined by the department as
sufficient to defray the department's actual costs of processing the
application or renewal and implementing this article.
   The limitation on fee increases of 10 percent without prior
approval of the Legislature set forth in Section 12978 shall not
apply to the application or renewal fee set forth in this subdivision
during the years 2002, 2003, and 2004.
   (b) Notwithstanding any other provision of law to the contrary,
the provisions set forth in Sections 1667, 1668, 1668.5, 1669, 1670,
1720, 1738, and 1739 apply to any application for or issuance of a
license, or any application for or approval of an endorsee, pursuant
to this article.
   (c) (1) Not less than 60 days before a permanent license will
expire, the commissioner may use an electronic delivery method,
including e-mail or other similar electronic method of delivery, to
deliver, or may mail, to the latest e-mail or mailing address
appearing on his or her records, an application to the licensee to
renew the license for the appropriate succeeding license period. It
is the licensee's responsibility to renew whether or not a renewal
application is received. The commissioner may accept a late renewal
without penalty, provided the licensee's failure to comply is due to
a clerical error or inadvertence on the part of the department.
   (2) An application for renewal shall be filed on or before the
expiration date.
   (3) The application for renewal of an expired license may be filed
after the expiration date and until that same month and date of the
next succeeding year. A licensee who files a renewal application
after the license has expired shall be charged, in addition to the
renewal fee, a penalty of 50 percent of the renewal fee for the
credit insurance agent license and all endorsees.
   (d) Costs associated with any enforcement action or investigation
shall be paid for by the person or organization licensed pursuant to
this article.



1758.93.  (a) An employee of an organization that has been issued a
credit insurance agent license pursuant to this article may be an
endorsee on the license if all of the following conditions have been
met:
   (1) The employee is 18 years of age or older.
   (2) The employee submits an application to the department that
includes a signed affidavit, in a form prescribed by the
commissioner, stating the applicant has read the credit insurance
training material submitted to the commissioner and that the
applicant has received from the organization training in, and is
knowledgeable about, the credit insurance products to be sold,
ethics, and market practices.
   (3) The employee submits an application fee, and each year
thereafter, a renewal fee, in an amount or amounts determined by the
department as sufficient to defray the department's actual costs of
processing the application or renewal and implementing this article.
   (b) Prior to allowing any endorsee to offer or sell credit-related
insurance, the licensed organization shall provide training to each
endorsee about the credit insurance products to be sold, and shall
submit annually to the department the names of endorsees and a
statement of compliance with this article. Training materials used by
the organization to train endorsees shall be submitted to the
department at the time the organization applies for its credit
insurance agent license, and each year thereafter when that license
is renewed. Any changes to previously submitted training materials
shall be submitted to the department with the changes highlighted 30
days prior to their use by the licensee. Training materials and
changes to those materials submitted to the department pursuant to
this subdivision shall be deemed approved for use by the company
unless it is notified by the department to the contrary. Failure by a
credit insurance licensee to submit training materials or changes
for departmental review or use of unapproved or disapproved training
materials shall constitute grounds for denial of an application for a
license, nonrenewal of a license, or suspension of a license, as
appropriate.
   (c) The credit insurance agent shall periodically retrain its
endorsees.


1758.94.  (a) The manager at each business location of an
organization licensed as a credit insurance agent, shall be listed as
an endorsee on the organization's license and shall be responsible
for the training and supervision of each additional endorsee at that
location. Each licensee shall identify the endorsee who is the
manager at each location for the purposes of this article.
   (b) An employee of a credit insurance agent who complies with the
requirements of Section 1758.93, and is endorsed on the license of
the credit insurance agent, may act on behalf of, and under the
supervision of, the credit insurance agent in matters relating to
transacting insurance under that agent's license. The conduct of an
endorsee of a credit insurance agent acting within the scope of
employment or agency shall be deemed the conduct of the credit
insurance agent for purposes of this article.



1758.95.  (a) If a licensee or endorsee violates any provision of
this article or any other provision of this code, the commissioner
may do either of the following:
   (1) After notice and hearing, suspend or revoke the license of the
credit insurance agent.
   (2) After notice and hearing, impose other penalties that the
commissioner deems necessary and convenient to carry out the purposes
of this code, including suspending the privilege of transacting
credit insurance pursuant to this article at specific business
locations where violations have occurred, imposing fines on the
credit insurance agent, individual endorsees or endorsee managers,
and suspending or revoking the endorsement of a named endorsee or
endorsee manager.
   (b) If any person sells insurance in connection with or incidental
to a loan or other extension of credit or holds himself or herself
or an organization out as a credit insurance agent without obtaining
the license required by this article, as being an endorsee when that
person is not an endorsee, or as being licensed pursuant to Chapter 5
(commencing with Section 1631) without obtaining that license, the
commissioner may issue a cease and desist order pursuant to Section
12921.8.
   (c) Notwithstanding any other provision of law to the contrary,
the provisions of Section 1748.5 are applicable to both the
organization issued a license pursuant to this article and any
endorsee to that license.



1758.96.  A person licensed pursuant to this article may act as a
credit insurance agent for an authorized insurer only with respect to
the kinds of insurance specified in this section sold in connection
with and incidental to a loan or other extension of credit other than
a loan in excess of sixty thousand dollars ($60,000) relating to or
secured by real property where the repayment period does not exceed
10 years. The sale of credit insurance products as specified in this
section in excess of sixty thousand dollars ($60,000) relating to or
secured by real property where any compensation, fee, or commission
is paid dependent on the placement of credit insurance, requires a
license to act as an insurance agent or life agent pursuant to
Section 1621 or 1622.
   (a) Credit life insurance.
   (b) Credit disability insurance.
   (c) Credit involuntary unemployment insurance or credit
loss-of-income insurance.
   (d) Credit property insurance.
   (e) Guaranteed automobile protection (GAP) insurance.
   (f) Any other form of insurance declared by the commissioner to be
subject to this section pursuant to subdivision (d) of Section
1758.992.



1758.97.  A credit insurance agent shall not sell or offer to sell
insurance pursuant to this article unless all of the following
conditions are satisfied:
   (a) The credit insurance agent provides brochures or other written
materials to the prospective purchaser that do all of the following:
   (1) Summarize the material terms and conditions of coverage
offered, including the identity of the insurer.
   (2) Describe the process for filing a claim, including a toll-free
telephone number to report a claim.
   (3) Disclose any additional information on the price, benefits,
exclusions, conditions, or other limitations of those policies that
the commissioner may by rule prescribe.
   (b) The credit insurance agent makes all of the following
disclosures, either with or as part of each individual policy or
group certificate, or with a notice of proposed insurance, or, if the
insurance is sold at the same time and place as the related credit
transaction, in a statement acknowledged by the purchaser in writing
on a separate form, electronically, digitally, or by audio recording:
   (1) That the purchase of the kinds of insurance prescribed in this
article is not required in order to secure the loan or an extension
of credit.
   (2) That the insurance coverage offered by the credit insurance
agent may provide a duplication of coverage already provided by a
purchaser's other personal insurance policies or by another source of
coverage.
   (3) That the endorsee is not qualified or authorized to evaluate
the adequacy of the purchaser's existing coverages, unless the
individual is licensed pursuant to Article 3 (commencing with Section
1631).
   (4) That the customer may cancel the insurance at any time. If the
customer cancels within 30 days from the delivery of the insurance
policy, certificate, or notice of proposed insurance, the premium
will be refunded in full. If the customer cancels at any time
thereafter, any unearned premium will be refunded in accordance with
applicable law.
   (c) Evidence of coverage is provided to every person who elects to
purchase that coverage.
   (d) Costs for the insurance are separately itemized in any loan,
credit, or retail agreement.
   (e) The insurance is provided under an individual policy issued to
the purchaser or under a group or master policy issued to the
organization licensed as a credit insurance agent by an insurer
authorized to transact the applicable kinds or types of insurance in
this state. Any of the conditions and disclosures specified in this
section shall be deemed satisfied if the consumer is otherwise
provided with the information required in this section by any other
disclosures required by existing federal or state law or regulations.
   No statement, disclosure, or notice made for the purpose of
compliance with this section shall be construed to cause the policy
form, certificate of insurance, or notice of proposed insurance, by
themselves, to be considered nonstandard forms, as described in
Article 6.9 (commencing with Section 2249) of Subchapter 2 of Chapter
5 of Title 10 of the California Code of Regulations.




1758.98.  Under the authority of the credit insurance agent license,
a credit insurance agent shall not do any of the following:
   (a) Offer to sell insurance except in conjunction with, and
incidental to, a loan or extension of credit.
   (b) Advertise, represent, or otherwise portray itself or its
employees, agents, or endorsees as licensed insurers, life agents, or
fire and casualty broker-agents.
   (c) Pay any unlicensed person any compensation, fee, or commission
dependent on the placement of insurance under the agent's license.
Nothing in this subdivision shall prohibit production payments or
incentive payments to an endorsee.



1758.99.  An organization licensed as a credit insurance agent shall
prominently display its license number and the department's toll
free consumer hot line telephone number on brochures and information
sheets required by this article and on any evidence of insurance.



1758.991.  Any insurer that provides insurance to be sold by an
organization licensed as a credit insurance agent shall file a copy
of any individual policy issued to a purchaser, or any policy or
certificate issued under a group or master policy to an organization
licensed as a credit agent, with the commissioner, who shall make
that policy available to the public.



1758.992.  As used in this article, the following definitions have
the following meanings:
   (a) "Enrollment" means the process of soliciting or accepting
enrollments or applications from a debtor under a credit insurance
policy, which includes informing the debtor of the availability of
coverage, calculating the insurance charge, preparing and delivering
the certificate of insurance or notice of proposed insurance,
answering questions regarding the coverage, or otherwise assisting
the debtor in making an informed decision whether or not to elect to
purchase credit insurance.
   (b) "Creditor" means a lender of money or a vendor or lessor of
goods, services, property, rights, or privileges, for which payment
is arranged through a credit transaction, or any successor to the
right, title, or interest of that lender, vendor, or lessor, and any
affiliate, associate, subsidiary, subcontractor, director, officer,
or employee of any of them or any other person in any way associated
with any of them.
   (c) "Credit insurance agent license" means an agent license issued
to an individual or organization for the enrollment and sale of
credit insurance.
   (d) "Credit insurance" includes credit life insurance, credit
disability insurance, credit involuntary unemployment insurance,
credit loss-of-income insurance, credit property insurance, or
guaranteed automobile protection (GAP) insurance.
   Credit insurance also includes any other form of insurance offered
in connection with an extension of credit that is limited to
partially or wholly extinguishing that credit obligation that the
commissioner determines should be designated a form of credit
insurance.
   The commissioner may adopt, pursuant to Chapter 3.5 (commencing
with Section 11340) of Part 1 of Division 3 of Title 2 of the
Government Code, reasonable rules and regulations necessary to carry
out this subdivision.
   (e) (1) "Credit life insurance" means insurance on the life of a
debtor pursuant to or in connection with a specific loan or other
credit transaction, exclusive of any insurance procured at no expense
to the debtor. Insurance shall be deemed procured at no expense to
the debtor unless the cost of the credit transaction to the debtor
varies depending on whether or not the insurance is procured.
   (2) "Credit disability insurance" means insurance on a debtor to
provide indemnity for payments becoming due on a specific loan or
other credit transaction while the debtor is disabled, as defined in
the policy, exclusive of any insurance procured at no expense to the
debtor. Insurance shall be deemed to have been procured at no expense
to the debtor unless the cost of the credit transaction to the
debtor varies depending on whether or not the insurance is procured.
   (f) "Credit involuntary unemployment insurance" or "credit
loss-of-income insurance" means insurance issued to provide indemnity
for payments becoming due on a specific loan or other credit
transaction while the debtor is involuntarily unemployed, as defined
in the policy.
   (g) "Credit property insurance" means insurance that provides
coverage (1) on personal property pledged or offered as collateral
for securing a personal or consumer loan, or (2) on personal property
purchased under an installment sales agreement or through a consumer
credit transaction, but does not include any insurance that provides
theft, collision, liability, property damage, or comprehensive
insurance coverage in any automobile or any other self-propelled
vehicle that is designed primarily for operation in the air or on the
highways, waterways, or sea, and its operating equipment, or that is
necessitated by reason of the liability imposed by law for damages
arising out of the ownership, operation, maintenance, or use of those
vehicles. However, that excluded insurance does include single
interest coverage on any of those vehicles that insures the interest
of the creditor in the same manner as collateral secures a loan.
   (h) (1) "Guaranteed automobile protection" (GAP) insurance means
insurance in which a person agrees to indemnify a vehicle purchaser
or lessee for any of the difference between the actual cash value of
the insured's vehicle at the time of an unrecovered theft or total
loss and the amount owed on the vehicle pursuant to the terms of a
loan, lease agreement, or installment sales contract used to purchase
or lease the vehicle. GAP insurance may also include a promise to
pay up to five thousand dollars ($5,000) to an insured, in addition
to the sum needed to indemnify the insured for the difference between
the actual cash value and the outstanding debt, to purchase or lease
another vehicle.
   (2) GAP insurance does not include, and no insurance license of
any type under this code is required to offer, any of the following:
   (A) A promise contained in a conditional sales contract for the
sale of a vehicle by a licensed motor vehicle dealer or a promise
contained in a lease agreement for the lease of a vehicle by a
licensed motor vehicle dealer or leasing company to waive all or a
portion of the difference between the actual cash value of the
insured's vehicle at the time of an unrecovered theft or total loss
and the amount owed on the vehicle pursuant to the terms of a loan,
lease agreement, or installment sales contract used to purchase or
lease the vehicle.
   (B) A promise by a lender as part of a debt obligation to purchase
or lease a vehicle in which the lender agrees to waive all or a
portion of the difference between the actual cash value of the
insured's vehicle at the time of an unrecovered theft or total loss
and the amount owed on the vehicle pursuant to the terms of a loan,
lease agreement, or installment sales contract used to purchase or
lease the vehicle.
   (C) Coverage under subparagraphs (A) and (B) may not include a
promise to pay money to a vehicle purchaser or lessee in addition to
waiving the difference between the actual cash value and the amount
owed. For purposes of this paragraph, a promise to pay money does not
include, and a dealer shall be allowed to offer, a discount or
credit provided to a consumer as an incentive for purchasing or
leasing a new vehicle if the consumer is required to use the discount
or credit on a purchase or lease from the dealer that sold or leased
the original vehicle to the consumer.



1758.993.  Nothing in this article regulating the sale of credit
insurance shall be construed to impair or impede the application of
any other law regulating the sale of credit insurance, including, but
not limited to, the California Finance Lenders Law, Division 9
(commencing with Section 22000) of the Financial Code.




1758.994.  The commissioner shall submit a report to the Legislature
by June 30, 2004, regarding the effectiveness of this article in
protecting consumers involved in credit insurance transactions. This
report shall include, but not be limited to, the number and
categories of licensees licensed pursuant to this article, the number
and nature of enforcement actions related to credit insurance
licensing or marketing issues, and any needed legislative reforms
recommended by the commissioner.



State Codes and Statutes

State Codes and Statutes

Statutes > California > Ins > 1758.9-1758.994

INSURANCE CODE
SECTION 1758.9-1758.994



1758.9.  No person shall sell or solicit any form of credit
insurance in this state, and receive a commission for their efforts,
unless that person is licensed as an insurance agent or broker
pursuant to Article 3 (commencing with Section 1631) or is licensed
as a credit insurance agent or endorsee under this article.




1758.91.  The commissioner may issue to an applicant that has
complied with the requirements of this article, a credit insurance
agent license to offer or sell those types of insurance specified in
Section 1758.96 in connection with, and incidental to, a loan or
extension of credit, on behalf of any insurer authorized to write
those types of insurance in this state.



1758.92.  (a) An applicant for a credit insurance agent license
under this article shall submit each of the following to the
commissioner:
   (1) A written application for licensure signed by the applicant or
an officer of the applicant, in the form prescribed by the
commissioner.
   (2) A certificate by the insurer that is to be named in the credit
insurance agent license, stating that the insurer has satisfied
itself that the named applicant is trustworthy and competent to act
as its insurance agent limited to this purpose and that the insurer
will appoint the applicant to act as its agent in reference to
selling or soliciting the kind or kinds of insurance that are
permitted by this article, if the credit insurance agent license
applied for is issued by the commissioner. The certification shall be
subscribed by an officer or managing agent of the insurer on a form
prescribed by the commissioner.
   (3) An application fee, and each license period thereafter, a
renewal fee, in an amount or amounts determined by the department as
sufficient to defray the department's actual costs of processing the
application or renewal and implementing this article.
   The limitation on fee increases of 10 percent without prior
approval of the Legislature set forth in Section 12978 shall not
apply to the application or renewal fee set forth in this subdivision
during the years 2002, 2003, and 2004.
   (b) Notwithstanding any other provision of law to the contrary,
the provisions set forth in Sections 1667, 1668, 1668.5, 1669, 1670,
1720, 1738, and 1739 apply to any application for or issuance of a
license, or any application for or approval of an endorsee, pursuant
to this article.
   (c) (1) Not less than 60 days before a permanent license will
expire, the commissioner may use an electronic delivery method,
including e-mail or other similar electronic method of delivery, to
deliver, or may mail, to the latest e-mail or mailing address
appearing on his or her records, an application to the licensee to
renew the license for the appropriate succeeding license period. It
is the licensee's responsibility to renew whether or not a renewal
application is received. The commissioner may accept a late renewal
without penalty, provided the licensee's failure to comply is due to
a clerical error or inadvertence on the part of the department.
   (2) An application for renewal shall be filed on or before the
expiration date.
   (3) The application for renewal of an expired license may be filed
after the expiration date and until that same month and date of the
next succeeding year. A licensee who files a renewal application
after the license has expired shall be charged, in addition to the
renewal fee, a penalty of 50 percent of the renewal fee for the
credit insurance agent license and all endorsees.
   (d) Costs associated with any enforcement action or investigation
shall be paid for by the person or organization licensed pursuant to
this article.



1758.93.  (a) An employee of an organization that has been issued a
credit insurance agent license pursuant to this article may be an
endorsee on the license if all of the following conditions have been
met:
   (1) The employee is 18 years of age or older.
   (2) The employee submits an application to the department that
includes a signed affidavit, in a form prescribed by the
commissioner, stating the applicant has read the credit insurance
training material submitted to the commissioner and that the
applicant has received from the organization training in, and is
knowledgeable about, the credit insurance products to be sold,
ethics, and market practices.
   (3) The employee submits an application fee, and each year
thereafter, a renewal fee, in an amount or amounts determined by the
department as sufficient to defray the department's actual costs of
processing the application or renewal and implementing this article.
   (b) Prior to allowing any endorsee to offer or sell credit-related
insurance, the licensed organization shall provide training to each
endorsee about the credit insurance products to be sold, and shall
submit annually to the department the names of endorsees and a
statement of compliance with this article. Training materials used by
the organization to train endorsees shall be submitted to the
department at the time the organization applies for its credit
insurance agent license, and each year thereafter when that license
is renewed. Any changes to previously submitted training materials
shall be submitted to the department with the changes highlighted 30
days prior to their use by the licensee. Training materials and
changes to those materials submitted to the department pursuant to
this subdivision shall be deemed approved for use by the company
unless it is notified by the department to the contrary. Failure by a
credit insurance licensee to submit training materials or changes
for departmental review or use of unapproved or disapproved training
materials shall constitute grounds for denial of an application for a
license, nonrenewal of a license, or suspension of a license, as
appropriate.
   (c) The credit insurance agent shall periodically retrain its
endorsees.


1758.94.  (a) The manager at each business location of an
organization licensed as a credit insurance agent, shall be listed as
an endorsee on the organization's license and shall be responsible
for the training and supervision of each additional endorsee at that
location. Each licensee shall identify the endorsee who is the
manager at each location for the purposes of this article.
   (b) An employee of a credit insurance agent who complies with the
requirements of Section 1758.93, and is endorsed on the license of
the credit insurance agent, may act on behalf of, and under the
supervision of, the credit insurance agent in matters relating to
transacting insurance under that agent's license. The conduct of an
endorsee of a credit insurance agent acting within the scope of
employment or agency shall be deemed the conduct of the credit
insurance agent for purposes of this article.



1758.95.  (a) If a licensee or endorsee violates any provision of
this article or any other provision of this code, the commissioner
may do either of the following:
   (1) After notice and hearing, suspend or revoke the license of the
credit insurance agent.
   (2) After notice and hearing, impose other penalties that the
commissioner deems necessary and convenient to carry out the purposes
of this code, including suspending the privilege of transacting
credit insurance pursuant to this article at specific business
locations where violations have occurred, imposing fines on the
credit insurance agent, individual endorsees or endorsee managers,
and suspending or revoking the endorsement of a named endorsee or
endorsee manager.
   (b) If any person sells insurance in connection with or incidental
to a loan or other extension of credit or holds himself or herself
or an organization out as a credit insurance agent without obtaining
the license required by this article, as being an endorsee when that
person is not an endorsee, or as being licensed pursuant to Chapter 5
(commencing with Section 1631) without obtaining that license, the
commissioner may issue a cease and desist order pursuant to Section
12921.8.
   (c) Notwithstanding any other provision of law to the contrary,
the provisions of Section 1748.5 are applicable to both the
organization issued a license pursuant to this article and any
endorsee to that license.



1758.96.  A person licensed pursuant to this article may act as a
credit insurance agent for an authorized insurer only with respect to
the kinds of insurance specified in this section sold in connection
with and incidental to a loan or other extension of credit other than
a loan in excess of sixty thousand dollars ($60,000) relating to or
secured by real property where the repayment period does not exceed
10 years. The sale of credit insurance products as specified in this
section in excess of sixty thousand dollars ($60,000) relating to or
secured by real property where any compensation, fee, or commission
is paid dependent on the placement of credit insurance, requires a
license to act as an insurance agent or life agent pursuant to
Section 1621 or 1622.
   (a) Credit life insurance.
   (b) Credit disability insurance.
   (c) Credit involuntary unemployment insurance or credit
loss-of-income insurance.
   (d) Credit property insurance.
   (e) Guaranteed automobile protection (GAP) insurance.
   (f) Any other form of insurance declared by the commissioner to be
subject to this section pursuant to subdivision (d) of Section
1758.992.



1758.97.  A credit insurance agent shall not sell or offer to sell
insurance pursuant to this article unless all of the following
conditions are satisfied:
   (a) The credit insurance agent provides brochures or other written
materials to the prospective purchaser that do all of the following:
   (1) Summarize the material terms and conditions of coverage
offered, including the identity of the insurer.
   (2) Describe the process for filing a claim, including a toll-free
telephone number to report a claim.
   (3) Disclose any additional information on the price, benefits,
exclusions, conditions, or other limitations of those policies that
the commissioner may by rule prescribe.
   (b) The credit insurance agent makes all of the following
disclosures, either with or as part of each individual policy or
group certificate, or with a notice of proposed insurance, or, if the
insurance is sold at the same time and place as the related credit
transaction, in a statement acknowledged by the purchaser in writing
on a separate form, electronically, digitally, or by audio recording:
   (1) That the purchase of the kinds of insurance prescribed in this
article is not required in order to secure the loan or an extension
of credit.
   (2) That the insurance coverage offered by the credit insurance
agent may provide a duplication of coverage already provided by a
purchaser's other personal insurance policies or by another source of
coverage.
   (3) That the endorsee is not qualified or authorized to evaluate
the adequacy of the purchaser's existing coverages, unless the
individual is licensed pursuant to Article 3 (commencing with Section
1631).
   (4) That the customer may cancel the insurance at any time. If the
customer cancels within 30 days from the delivery of the insurance
policy, certificate, or notice of proposed insurance, the premium
will be refunded in full. If the customer cancels at any time
thereafter, any unearned premium will be refunded in accordance with
applicable law.
   (c) Evidence of coverage is provided to every person who elects to
purchase that coverage.
   (d) Costs for the insurance are separately itemized in any loan,
credit, or retail agreement.
   (e) The insurance is provided under an individual policy issued to
the purchaser or under a group or master policy issued to the
organization licensed as a credit insurance agent by an insurer
authorized to transact the applicable kinds or types of insurance in
this state. Any of the conditions and disclosures specified in this
section shall be deemed satisfied if the consumer is otherwise
provided with the information required in this section by any other
disclosures required by existing federal or state law or regulations.
   No statement, disclosure, or notice made for the purpose of
compliance with this section shall be construed to cause the policy
form, certificate of insurance, or notice of proposed insurance, by
themselves, to be considered nonstandard forms, as described in
Article 6.9 (commencing with Section 2249) of Subchapter 2 of Chapter
5 of Title 10 of the California Code of Regulations.




1758.98.  Under the authority of the credit insurance agent license,
a credit insurance agent shall not do any of the following:
   (a) Offer to sell insurance except in conjunction with, and
incidental to, a loan or extension of credit.
   (b) Advertise, represent, or otherwise portray itself or its
employees, agents, or endorsees as licensed insurers, life agents, or
fire and casualty broker-agents.
   (c) Pay any unlicensed person any compensation, fee, or commission
dependent on the placement of insurance under the agent's license.
Nothing in this subdivision shall prohibit production payments or
incentive payments to an endorsee.



1758.99.  An organization licensed as a credit insurance agent shall
prominently display its license number and the department's toll
free consumer hot line telephone number on brochures and information
sheets required by this article and on any evidence of insurance.



1758.991.  Any insurer that provides insurance to be sold by an
organization licensed as a credit insurance agent shall file a copy
of any individual policy issued to a purchaser, or any policy or
certificate issued under a group or master policy to an organization
licensed as a credit agent, with the commissioner, who shall make
that policy available to the public.



1758.992.  As used in this article, the following definitions have
the following meanings:
   (a) "Enrollment" means the process of soliciting or accepting
enrollments or applications from a debtor under a credit insurance
policy, which includes informing the debtor of the availability of
coverage, calculating the insurance charge, preparing and delivering
the certificate of insurance or notice of proposed insurance,
answering questions regarding the coverage, or otherwise assisting
the debtor in making an informed decision whether or not to elect to
purchase credit insurance.
   (b) "Creditor" means a lender of money or a vendor or lessor of
goods, services, property, rights, or privileges, for which payment
is arranged through a credit transaction, or any successor to the
right, title, or interest of that lender, vendor, or lessor, and any
affiliate, associate, subsidiary, subcontractor, director, officer,
or employee of any of them or any other person in any way associated
with any of them.
   (c) "Credit insurance agent license" means an agent license issued
to an individual or organization for the enrollment and sale of
credit insurance.
   (d) "Credit insurance" includes credit life insurance, credit
disability insurance, credit involuntary unemployment insurance,
credit loss-of-income insurance, credit property insurance, or
guaranteed automobile protection (GAP) insurance.
   Credit insurance also includes any other form of insurance offered
in connection with an extension of credit that is limited to
partially or wholly extinguishing that credit obligation that the
commissioner determines should be designated a form of credit
insurance.
   The commissioner may adopt, pursuant to Chapter 3.5 (commencing
with Section 11340) of Part 1 of Division 3 of Title 2 of the
Government Code, reasonable rules and regulations necessary to carry
out this subdivision.
   (e) (1) "Credit life insurance" means insurance on the life of a
debtor pursuant to or in connection with a specific loan or other
credit transaction, exclusive of any insurance procured at no expense
to the debtor. Insurance shall be deemed procured at no expense to
the debtor unless the cost of the credit transaction to the debtor
varies depending on whether or not the insurance is procured.
   (2) "Credit disability insurance" means insurance on a debtor to
provide indemnity for payments becoming due on a specific loan or
other credit transaction while the debtor is disabled, as defined in
the policy, exclusive of any insurance procured at no expense to the
debtor. Insurance shall be deemed to have been procured at no expense
to the debtor unless the cost of the credit transaction to the
debtor varies depending on whether or not the insurance is procured.
   (f) "Credit involuntary unemployment insurance" or "credit
loss-of-income insurance" means insurance issued to provide indemnity
for payments becoming due on a specific loan or other credit
transaction while the debtor is involuntarily unemployed, as defined
in the policy.
   (g) "Credit property insurance" means insurance that provides
coverage (1) on personal property pledged or offered as collateral
for securing a personal or consumer loan, or (2) on personal property
purchased under an installment sales agreement or through a consumer
credit transaction, but does not include any insurance that provides
theft, collision, liability, property damage, or comprehensive
insurance coverage in any automobile or any other self-propelled
vehicle that is designed primarily for operation in the air or on the
highways, waterways, or sea, and its operating equipment, or that is
necessitated by reason of the liability imposed by law for damages
arising out of the ownership, operation, maintenance, or use of those
vehicles. However, that excluded insurance does include single
interest coverage on any of those vehicles that insures the interest
of the creditor in the same manner as collateral secures a loan.
   (h) (1) "Guaranteed automobile protection" (GAP) insurance means
insurance in which a person agrees to indemnify a vehicle purchaser
or lessee for any of the difference between the actual cash value of
the insured's vehicle at the time of an unrecovered theft or total
loss and the amount owed on the vehicle pursuant to the terms of a
loan, lease agreement, or installment sales contract used to purchase
or lease the vehicle. GAP insurance may also include a promise to
pay up to five thousand dollars ($5,000) to an insured, in addition
to the sum needed to indemnify the insured for the difference between
the actual cash value and the outstanding debt, to purchase or lease
another vehicle.
   (2) GAP insurance does not include, and no insurance license of
any type under this code is required to offer, any of the following:
   (A) A promise contained in a conditional sales contract for the
sale of a vehicle by a licensed motor vehicle dealer or a promise
contained in a lease agreement for the lease of a vehicle by a
licensed motor vehicle dealer or leasing company to waive all or a
portion of the difference between the actual cash value of the
insured's vehicle at the time of an unrecovered theft or total loss
and the amount owed on the vehicle pursuant to the terms of a loan,
lease agreement, or installment sales contract used to purchase or
lease the vehicle.
   (B) A promise by a lender as part of a debt obligation to purchase
or lease a vehicle in which the lender agrees to waive all or a
portion of the difference between the actual cash value of the
insured's vehicle at the time of an unrecovered theft or total loss
and the amount owed on the vehicle pursuant to the terms of a loan,
lease agreement, or installment sales contract used to purchase or
lease the vehicle.
   (C) Coverage under subparagraphs (A) and (B) may not include a
promise to pay money to a vehicle purchaser or lessee in addition to
waiving the difference between the actual cash value and the amount
owed. For purposes of this paragraph, a promise to pay money does not
include, and a dealer shall be allowed to offer, a discount or
credit provided to a consumer as an incentive for purchasing or
leasing a new vehicle if the consumer is required to use the discount
or credit on a purchase or lease from the dealer that sold or leased
the original vehicle to the consumer.



1758.993.  Nothing in this article regulating the sale of credit
insurance shall be construed to impair or impede the application of
any other law regulating the sale of credit insurance, including, but
not limited to, the California Finance Lenders Law, Division 9
(commencing with Section 22000) of the Financial Code.




1758.994.  The commissioner shall submit a report to the Legislature
by June 30, 2004, regarding the effectiveness of this article in
protecting consumers involved in credit insurance transactions. This
report shall include, but not be limited to, the number and
categories of licensees licensed pursuant to this article, the number
and nature of enforcement actions related to credit insurance
licensing or marketing issues, and any needed legislative reforms
recommended by the commissioner.