California Insurance Code

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Insurance Code - INS

DIVISION 5. INSURANCE ADJUSTERS [14000 - 16032]

( Division 5 added by Stats. 1980, Ch. 1190, Sec. 11. )

CHAPTER 1. Insurance Adjuster Act [14000 - 14099]

( Chapter 1 added by Stats. 1980, Ch. 1190, Sec. 11. )

ARTICLE 3. Regulation, Licensing, and Registration [14020 - 14047]
( Article 3 added by Stats. 1980, Ch. 1190, Sec. 11. )

14020.

(a)A person shall not engage in a business regulated by this chapter, or act or assume to act as, or represent themselves to be, a licensee unless the person is licensed under this chapter.

(b)A person shall not falsely represent that the person is employed by a licensee.

(Amended by Stats. 2019, Ch. 502, Sec. 2. (SB 240) Effective October 3, 2019.)

14021.

An insurance adjuster within the meaning of this chapter is a person other than a private investigator as defined in Section 7521 of the Business and Professions Code who, for any consideration whatsoever, engages in business or accepts employment to furnish, or agrees to make, or makes, any investigation for the purpose of obtaining, information in the course of adjusting or otherwise participating in the disposal of, any claim under or in connection with a policy of insurance on behalf of an insurer or engages in soliciting insurance adjustment business or aids an insurer in any manner with reference to:

Crime or wrongs done or threatened against the United States of America or any state or territory of the United States of America; the identity, habits, conduct, business, occupation, honesty, integrity, credibility, knowledge, trustworthiness, efficiency, loyalty, activity, movement, whereabouts, affiliations, associations, transactions, acts, reputation, or character of any person; the location, disposition, or recovery of lost or stolen property; the cause or responsibility for fires, libels, losses, accidents, or damage or injury to persons or to property; or securing evidence to be used before any court, board, officer, or investigating committee.

Notwithstanding any other provision of law, this section is in no way intended to limit the ability of a duly licensed independent insurance adjuster to perform the duties of an independent insurance adjuster for any other entity.

(Amended by Stats. 1997, Ch. 96, Sec. 1. Effective January 1, 1998.)

14022.

This chapter does not apply to:

(a)(1)A person employed exclusively and regularly by one employer in connection with the affairs of the employer only and if there exists an employer-employee relationship, except as provided in paragraph (2).

(2)After a declared state of emergency, as defined in Section 8558 of the Government Code, or other emergency declared by a public official, a person licensed under this chapter or a qualified manager shall require that all nonlicensed adjusters under the supervision of that person or manager read and understand the most recent notice and adjuster handbook prepared by the department pursuant to subdivision (a) of Section 14046 no later than 15 calendar days from the date on which the nonlicensed adjuster began claims adjusting activity in California.

(3)In enforcing this chapter, the department shall not be required to investigate whether a person is employed exclusively and regularly by one employer pursuant to paragraph (1).

(b)An officer or employee of the United States of America, or of this state or a political subdivision thereof, while that officer or employee is engaged in the performance of official duties.

(c)A person engaged exclusively in the business of obtaining and furnishing information as to the financial rating of persons.

(d)A charitable philanthropic society or association duly incorporated under the laws of this state, which is organized and maintained for the public good and not for private profit.

(e)An attorney performing the duties of an attorney.

(f)A licensed collection agency or an employee thereof acting within the scope of employment, while making an investigation incidental to the business of the agency, including an investigation of the location of a debtor or the debtor?s property if the contract with an assignor creditor is for the collection of claims owed or due or asserted to be owed or due or the equivalent thereof.

(g)Admitted insurers and agents and insurance brokers licensed by the state, performing duties in connection with insurance transacted by them.

(h)The legal owner of personal property that has been sold under a conditional sales agreement or a mortgagee under the terms of a chattel mortgage.

(i)A bank subject to the jurisdiction of the Commissioner of Financial Institutions of the State of California under Division 1 (commencing with Section 99) of the Financial Code or the Comptroller of the Currency of the United States.

(j)A person engaged solely in the business of securing information about persons or property from public records.

(k)A building contractor, engineer, technical expert, or other person who is engaged by an insurer or licensed adjuster to provide an expert or professional evaluation of the extent, cause, or origin of damage to the insured property, but who does not otherwise participate in the process of adjusting claims.

(Amended by Stats. 2019, Ch. 502, Sec. 3. (SB 240) Effective October 3, 2019.)

14022.5.

(a)In the event of an emergency situation as declared by the commissioner, claims arising out of the emergency, catastrophe, disaster, or other similar occurrence may be adjusted by a nonlicensed adjuster upon registration with the commissioner if all of the following requirements are met:

(1)The work performed by the nonlicensed adjuster is under the active direction, control, charge, or management of a licensed adjuster or an insurer authorized to do business in this state.

(2)The licensee or insurer registers the nonlicensed adjuster with the commissioner no later than 15 calendar days from the date on which the nonlicensed adjuster began claims adjusting activity in California.

(3)The nonlicensed adjuster submits to the commissioner a certification in a form or other format specified by the commissioner, under penalty of perjury, that the adjuster has read and understands the most recent notice and the handbook for adjusting disaster claims prepared by the department pursuant to subdivision (a) of Section 14046.

(b)?Registration? or ?register,? within the meaning of this section, means filing with the commissioner a notice in a form or other format specified by the commissioner, submitted by the supervising licensed adjuster or admitted insurer, naming the nonlicensed adjusters, identifying their adjuster licenses held in other jurisdictions, or, if not licensed, providing other identification specified by the commissioner, stating when their claims adjusting activity will commence or has commenced, and any other information the commissioner may require.

(c)Registration for claims adjusting activities arising out of an emergency is valid for a period of 180 days from the date of the registration letter. Before the lapse of that period, the commissioner may grant further 180-day extensions as the commissioner deems appropriate upon written request from the supervising licensed adjuster or the admitted insurer.

(d)A registration is not valid unless a current certification is on file with the commissioner.

(e)In enforcing this chapter, the department shall not be required to investigate the employment or contractor status of a person registered pursuant to this section.

(f)This section does not apply to a nonlicensed adjuster who meets the criteria described in paragraph (1) of subdivision (a) of Section 14022.

(Amended by Stats. 2019, Ch. 502, Sec. 4. (SB 240) Effective October 3, 2019.)

14023.

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.

(Amended by Stats. 2019, Ch. 502, Sec. 5. (SB 240) Effective October 3, 2019.)

14024.

An application shall be verified and shall include:

(a)The full name and business address of the applicant.

(b)The name under which 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 residence address of each of its partners, officers, and directors, and its manager.

(f)Two recent photographs of the applicant, of a 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.

(Added by Stats. 1980, Ch. 1190, Sec. 11. Operative July 1, 1981, by Sec. 13 of Ch. 1190.)

14025.

Before an application for a license is granted, the applicant, or his or her manager, shall meet all of the following:

(a)Be at least 18 years of age.

(b)Not have committed acts or crimes constituting grounds for denial of licensure under Section 480 of the Business and Professions Code.

(c)Shall have had at least two years of experience in adjusting insurance claims or the equivalent thereof as determined by the commissioner.

(d)Comply with such other qualifications as the commissioner may fix by rule.

(Added by Stats. 1980, Ch. 1190, Sec. 11. Operative July 1, 1981, by Sec. 13 of Ch. 1190.)

14026.

The commissioner may require an applicant, or his or her manager, to demonstrate his or her qualifications by a written or oral examination, or a combination of both.

(Added by Stats. 1980, Ch. 1190, Sec. 11. Operative July 1, 1981, by Sec. 13 of Ch. 1190.)

14026.5.

Where a person who is or has been licensed under this chapter has been found by the commissioner to have violated any provision of this code that would justify the suspension or revocation of a license held by the person, or where a person is applying for a license under this chapter and there exists grounds for the denial of the application by the commissioner, the commissioner may, after hearing, revoke the license held or deny the application for an unrestricted license, and in lieu thereof issue to the person a restricted license. The commissioner may impose any reasonable conditions upon the acquisition of the restricted license or conduct of the holder of the license. The holder of the restricted license has no property right in it and the commissioner may, with or without either hearing or cause, suspend or revoke a restricted license. If a hearing is held under this section, it shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. The holder of a restricted license is subject to all the provisions of this code and the license shall be kept in force and renewed in the same manner, at the same time, and subject to the same conditions and fees as are applicable to an unrestricted license to act in the same capacity.

(Added by Stats. 1996, Ch. 707, Sec. 4. Effective January 1, 1997. Operative July 1, 1997, by Sec. 8 of Ch. 707.)

14027.

Payment of the application fee prescribed by this chapter entitles an applicant, or his or her manager, 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 such subsequent examination.

(Added by Stats. 1980, Ch. 1190, Sec. 11. Operative July 1, 1981, by Sec. 13 of Ch. 1190.)

14028.

After a hearing the commissioner may deny a license unless the application makes a showing satisfactory to the commissioner that the applicant, if an individual, has not, or if the applicant is a person other than an individual, that its manager and each of its officers and partners have not:

(a)Committed any acts or crimes constituting grounds for denial of licensure under Section 480 of the Business and Professions Code.

(b)Been refused a license under this chapter or had a license revoked.

(c)Been an officer, partner, or manager of any person who has been refused a license under this chapter or whose license has been revoked.

(d)While unlicensed committed, or aided and abetted the commission of, any act for which a license is required by this chapter.

(e)Committed any act or crime constituting grounds for denial of license under Section 1668.

(Amended by Stats. 2005, Ch. 448, Sec. 5. Effective January 1, 2006.)

14028.5.

The commissioner may, without hearing, deny a license if the applicant has committed any act or crime constituting grounds for denial of license under Section 1669.

(Added by Stats. 2005, Ch. 448, Sec. 6. Effective January 1, 2006.)

14029.

(a)The business of each licensee shall be operated under the active direction, control, charge, or management of the licensee, if the licensee is qualified, or the person who has qualified to act as the licensee?s manager, if the licensee is not qualified.

(b)No person shall act as a manager of a licensee until he or she has complied with each of the following:

(1)Demonstrated his or her qualifications by a written or oral examination, or a combination of both, if required by the commissioner.

(2)Made a satisfactory showing to the commissioner that he or she has the qualifications prescribed by Section 14025 and that none of the facts stated in Section 14028 or 14028.5 exist as to him or her.

(c)If the manager, who has qualified as provided in this section, ceases for any reason whatsoever to be connected with the licensee to whom the license is issued, the licensee shall notify the commissioner in writing 30 days from the cessation. If notice is given, the license shall remain in force for a reasonable length of time to be determined by the rules of the commissioner pending the qualifications, as provided in this chapter, of another manager. If the licensee fails to notify the commissioner within the 30-day period, his or her license shall be subject to suspension or revocation and may be reinstated only upon the filing of an application for reinstatement, payment of the reinstatement fee, if any is due, and the qualification of a manager as provided herein.

(d)Every manager shall renew his or her authority by satisfying the requirements of Article 8 (commencing with Section 14090).

(Amended by Stats. 2008, Ch. 300, Sec. 16. Effective January 1, 2009.)

14030.

Whenever the individual on the basis of whose qualifications a license under this chapter has been obtained ceases to be connected with the licensee for any reason whatever, the business may be carried on for such temporary period and under such terms and conditions as the commissioner shall provide by regulation.

(Added by Stats. 1980, Ch. 1190, Sec. 11. Operative July 1, 1981, by Sec. 13 of Ch. 1190.)

14031.

Whenever a hearing is held under this chapter to determine whether an application for a license should be granted or to determine the qualifications of a licensee?s manager, the proceedings 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 of the powers granted therein.

(Added by Stats. 1980, Ch. 1190, Sec. 11. Operative July 1, 1981, by Sec. 13 of Ch. 1190.)

14032.

The form and content of the license shall be determined by the commissioner in accordance with Section 164 of the Business and Professions Code.

(Added by Stats. 1980, Ch. 1190, Sec. 11. Operative July 1, 1981, by Sec. 13 of Ch. 1190.)

14033.

The license shall at all times be posted in a conspicuous place in the principal place of business of the licenses.

(Added by Stats. 1980, Ch. 1190, Sec. 11. Operative July 1, 1981, by Sec. 13 of Ch. 1190.)

14034.

Upon the issuance of a license, a pocket card of such size, design, and content as may be determined by the commissioner shall be issued without charge to each licensee, if an individual, or if the licensee is a person other than an individual, to its manager and to each of its officers and partners, which card shall be evidence that the licensee is duly licensed pursuant to this chapter. When any person to whom a card is issued terminates his or her position, office, or association with the licensee, the card shall be surrendered to the licensee and within five days thereafter shall be mailed or delivered by the licensee to the department for cancellation.

(Added by Stats. 1980, Ch. 1190, Sec. 11. Operative July 1, 1981, by Sec. 13 of Ch. 1190.)

14035.

A licensee shall, within 30 days after such change, notify the department of any change of his or her address and of any change in the officers or partners of such licensee. The principal place of business may be at a home or at a business address, but it shall be the place at which the licensee maintains a permanent office.

Applications, on forms prescribed by the commissioner, shall be submitted by all new officers or partners. The commissioner may suspend or revoke a license issued under this chapter if he or she determines that at the time the person became an officer or partner of a licensee, any of the facts stated in Section 14028 or 14028.5 existed as to such person.

(Amended by Stats. 2005, Ch. 448, Sec. 8. Effective January 1, 2006.)

14036.

A license issued under this chapter is not assignable.

(Added by Stats. 1980, Ch. 1190, Sec. 11. Operative July 1, 1981, by Sec. 13 of Ch. 1190.)

14037.

A licensee shall at all times be legally responsible for the good conduct in the business of each of the licensee?s employees or agents, including the licensee?s manager and any nonlicensed adjusters the licensee registers pursuant to Section 14022.5.

(Amended by Stats. 2019, Ch. 502, Sec. 6. (SB 240) Effective October 3, 2019.)

14038.

(a)Any licensee or officer, director, partner, or manager of a licensee may divulge to any law enforcement officer or district attorney, or to his or her representative, any information he or she may acquire as to any criminal offense, but he or she shall not 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 client for whom the information was obtained.

(b)No licensee or officer, director, partner, manager, or employee of a licensee shall knowingly make any false report to his or her employer or client for whom information was being obtained.

(c)No written report shall be submitted to a client except by the licensee, qualifying manager, or a person authorized by one or either of them, and such person submitting the report shall exercise diligence in ascertaining whether or not the facts and information in such a report are true and correct.

(d)No licensee, or officer, director, partner, manager, or employee of a licensee shall use a badge in connection with the official activities of the licensee?s business.

(e)No licensee, or officer, director, partner, manager, or employee of a licensee, shall use a title, or wear a uniform, or use an insignia, or use an identification card, or make any statement with the intent to give an impression that he or she is connected in any way with the federal government, a state government, or any political subdivision of a state government.

(f)No licensee, or officer, director, partner, manager, or employee of a licensee, shall enter any private building or portion thereof without the consent of the owner or of the person in legal possession thereof.

(g)No licensee shall appear as an assignee party in any proceeding involving claim and delivery, replevin, or other possessory action, action to foreclose a chattel mortgage, mechanic?s lien, materialman?s lien, or any other lien.

(h)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. All business of the licensee shall be conducted in the name of and under the control of the licensee.

(i)No licensee acting as an independent automobile damage appraiser or adjuster or as an automobile insurance claims adjuster, appraiser or representative shall receive any financial benefit from an automobile repair facility. ?Financial benefit? means the receiving of any commission or gratuity, discount on repair costs, free repairs, employment by a repair facility, or possession of more than 3 percent direct ownership in an automobile repair facility located in this state.

(Amended by Stats. 1981, Ch. 657, Sec. 1.)

14039.

No person licensed as an insurance adjuster shall do any of the following:

(a)Fail to disclose his or her full financial interest in a contract or agreement executed by him or her for the adjustment of a claim prior to the execution thereof.

(b)Use any misrepresentation to solicit a contract or agreement to adjust a claim.

(c)Solicit or accept remuneration from, or have a financial interest exceeding 3 percent in, any salvage, repair, or other firm, which obtains business in connection with any claim which he or she has a contract or agreement to adjust.

(Added by Stats. 1980, Ch. 1190, Sec. 11. Operative July 1, 1981, by Sec. 13 of Ch. 1190.)

14040.

Any badge or cap insignia worn by a person who is a licensee, officer, director, partner, manager, or employee of a licensee shall be of a design approved by the commissioner, and shall bear on its face a distinctive word indicating the name of the licensee and an employee number by which such person may be identified by the licensee.

(Added by Stats. 1980, Ch. 1190, Sec. 11. Operative July 1, 1981, by Sec. 13 of Ch. 1190.)

14041.

Each licensee shall maintain a record containing such information relative to his or her employees as may be prescribed by the commissioner.

(Added by Stats. 1980, Ch. 1190, Sec. 11. Operative July 1, 1981, by Sec. 13 of Ch. 1190.)

14042.

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.

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 of that used by another licensee that the public may be confused or misled thereby.

The authorization shall require, as a condition precedent to the use of any 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.

A licensee desiring to conduct his or her business under more than one fictitious business name shall obtain the authorization of the commissioner in the manner prescribed in this section for the use of each name.

The licensee shall pay a fee of twenty-five dollars ($25) for each authorization to use an additional fictitious business 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 twenty-nine dollars ($29) for that authorization.

(Amended by Stats. 2017, Ch. 534, Sec. 92. (AB 1699) Effective January 1, 2018.)

14043.

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 purpose of identifying such principal place of business.

(Added by Stats. 1980, Ch. 1190, Sec. 11. Operative July 1, 1981, by Sec. 13 of Ch. 1190.)

14044.

Every advertisement by a licensee soliciting or advertising business shall contain his or her name, address, and 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.

(Added by Stats. 1980, Ch. 1190, Sec. 11. Operative July 1, 1981, by Sec. 13 of Ch. 1190.)

14045.

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 such location after compliance with the provisions of this chapter and such 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 after closing or changing the location of a branch office.

(Added by Stats. 1980, Ch. 1190, Sec. 11. Operative July 1, 1981, by Sec. 13 of Ch. 1190.)

14046.

(a)(1)The department shall annually prepare and deliver to every person licensed under this chapter and every insurer admitted in this state a notice describing the most significant California laws pertaining to property insurance policies, including those related to a declared state of emergency, as defined in Section 8558 of the Government Code, or other emergency declared by a public official.

(2)The department shall prepare and deliver to every person licensed under this chapter a handbook for adjusting in California that includes information relevant to evaluating damage caused by an emergency, catastrophe, disaster, or other similar occurrence, including wildfires. The handbook shall be the similar or equivalent to one hour of continuing education for licensees.

(b)For a claim under a policy of residential property insurance arising as a result of a declared state of emergency, as defined in Section 8558 of the Government Code, or other emergency declared by a public official, an insurer shall provide the claimant with a copy of the most recent notice described in paragraph (1) of subdivision (a) no later than 15 calendar days from the date on which the insurer received notice of the claim.

(c)After a declared state of emergency, as defined in Section 8558 of the Government Code, or other emergency declared by a public official, a supervising licensed adjuster shall require any nonlicensed adjuster it has registered with the department pursuant to subdivision (b) of Section 14022.5 and any nonlicensed adjuster exempted from this chapter pursuant to subdivision (a) of Section 14022 to read and understand the most recent notice described in paragraph (1) of subdivision (a) and the most recent handbook described in paragraph (2) of subdivision (a) no later than 15 calendar days from the date on which the nonlicensed adjuster began claims adjusting activity in California.

(d)The commissioner shall make the notice described in paragraph (1) of subdivision (a), the handbook described in paragraph (2) of subdivision (a), and the certification process required pursuant to paragraph (3) of subdivision (a) of Section 14022.5 accessible through a dedicated page on the department?s internet website.

(Added by Stats. 2019, Ch. 502, Sec. 7. (SB 240) Effective October 3, 2019.)

14047.

(a)For a claim under a policy of residential property insurance arising as a result of a state of emergency, as defined in subdivision (b) of Section 8558 of the Government Code, if, within a six-month period, an insurer assigns a third or subsequent first-party real or personal property claims adjuster to be primarily responsible for a claim, the insurer, in a timely manner, shall provide the insured with a written status report, establish a primary point of contact for the insured, and provide the insured with one or more direct means of communication with the primary point of contact.

(b)The primary point of contact shall be available to respond to inquiries by the insured related to the residential property insurance claim. Other claims personnel, vendors, or professionals, including clerical staff members and call center staff members, may work on portions of the insured?s claim. Once assigned, the primary point of contact shall remain assigned to the insured?s claim until the insurer determines that the residential property claim is closed or litigation has been filed.

(c)The insurer shall ensure that the primary point of contact refers and transfers an insured to the appropriate supervisor with a span of control over the primary point of contact upon the request of the insured. This process shall be satisfied by a referral to a first-tier or second-tier manager with authority over claim handling.

(d)For purposes of this section:

(1)?Policy of residential property insurance? has the same meaning as defined in Section 10087.

(2)?Primary point of contact? means a first-party real or personal property claims adjuster or team employed as a member or members of the insurer?s staff who are knowledgeable about the claim and its current status.

(Added by Stats. 2019, Ch. 502, Sec. 8. (SB 240) Effective October 3, 2019.)