California Senate Bill SB488 Introduced / Bill

 BILL NUMBER: SB 488INTRODUCED BILL TEXT INTRODUCED BY Senator Block FEBRUARY 26, 2015 An act to amend Sections 1722, 1751.5, 14000, 14001, 14020, 14022, 14022.5, 14024, 14025, 14028, 14031, 14032, 14038, 14039, 14040, 14042, 14061, 14063, 14064, 14080, 14090.1, 14097, 14099, 15001, 15008, 15010, 15011, 15013, 15017, 15020, 15027, 15027.1, 15031, 15036, 15053, 15056, 15060, and 15062 of, to add Sections 14025.1, 14079, and 15009.1 to, to repeal Sections 14027, 14030, 14037, and 15015 of, and to repeal and add Sections 14010, 14021, 14026, 14029, 14078, 15007, and 15016 of, the Insurance Code, relating to insurance. LEGISLATIVE COUNSEL'S DIGEST SB 488, as introduced, Block. Independent insurance adjusters: public insurance adjusters. (1) Existing law, the Insurance Adjuster Act, sets forth various requirements with respect to operation as an insurance adjuster in this state, including, but not limited to, that the person be licensed, licensing qualifications and application requirements, codes of conduct, disciplinary actions, and nonresident and emergency licenses. The act defines the term, "insurance adjuster," to include a person, other than a private investigator, 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. Any person who knowingly falsifies the fingerprints or photographs submitted as part of the application process is guilty of a felony, and any person who violates any other provision governing insurance adjusters is guilty of a misdemeanor punishable by a fine not to exceed $500, or by imprisonment in the county jail not to exceed one year, or by both that fine and imprisonment. This bill would revise and recast the above provisions by, among other things, changing the name of the act to the Independent Insurance Adjuster Act and redefining an "independent insurance adjuster" to mean an individual, a business entity, an independent contractor, or an employee of a contractor, who contracts for compensation with insurers or self-insurers, a person whose tax treatment by the insurers or self-insurers is consistent with that of an independent contractor rather than as an employee, and a person that investigates, negotiates, or settles property, casualty, or workers' compensation claims for insurers or for self-insurers. The bill would expand the categories of persons exempt from the act to include, among others, an individual who is employed to investigate suspected fraudulent insurance claims but who does not adjust losses or determine claims payments, and a person who solely performs executive, administrative, managerial, or clerical duties or any combination thereof, and who does not investigate, negotiate, or settle claims with policyholders, claimants, or their legal representative. The bill would impose additional information and educational requirements on applicants and would impose additional code of conduct requirements on licensees. The bill would revise the provisions relating to nonresident and emergency licenses with regards to qualifying for those licenses. The bill would also create an apprentice independent insurance adjuster license to facilitate the experience, education, and training necessary to ensure reasonable competency in the responsibilities and duties of an independent insurance adjuster and would set forth the various terms and conditions of the license, including an application fee to be fixed by the commissioner and reasonably related to the actual cost to the department in performing its duties. The bill would make an apprentice independent insurance adjuster subject to a felony conviction if he or she knowingly falsifies the fingerprints or photograph submitted as part of his or her application for a license. The bill would also make conforming changes. Because the bill would create a new crime, it would impose a state-mandated local program. (2) Existing law, the Public Insurance Adjusters Act, sets forth various requirements with respect to operation as a public insurance adjuster in this state, including, but not limited to, that the person be licensed and licensing qualifications and application requirements for public insurance adjusters, nonresident public insurance adjusters, and interim public insurance adjusters. The act defines the term "public insurance adjuster" to mean a person who, for compensation, acts on behalf of, or aids in any manner, an insured in negotiating for or effecting the settlement of a claim or claims for loss or damage under any policy of insurance covering real or personal property or any person who advertises, solicits business, or holds himself or herself out to the public as an adjuster of those claims and any person who, for compensation, investigates, settles, adjusts, advises, or assists an insured with reference to claims for those losses on behalf of any public insurance adjuster. Any person who knowingly falsifies the fingerprints or photographs submitted as part of the application process is guilty of a felony, and any person who violates any other provision governing public insurance adjusters is guilty of a misdemeanor punishable by a fine not to exceed $500 or by imprisonment in the county jail not to exceed one year, or by both that fine and imprisonment. This bill would revise and recast the above provisions by, among other things, redefining a "public insurance adjuster" to include any person who, for compensation or any other thing of value on behalf of an insured, acts or aids, solely in relation to first party claims arising under insurance contracts that insure the real or personal property of the insured, on behalf of an insured in negotiating for, or effecting the settlement of, a claim for loss or damage coverage by an insurance contract, or advertises for employment as a public adjuster of insurance claims or solicits business or represents himself or herself to the public as a public adjuster of first party insurance claims for losses or damages arising out of policies of insurance that insure real or personal property. The bill would expand the categories of persons exempt from the act to include, among others, a person who negotiates or settles claims arising under a life or health insurance policy or an annuity contract and a person who settles subrogation claims between insurers. The bill would place additional eligibility requirements on applicants for a nonresident license. The bill would also repeal the provisions relating to an interim license, and would instead create an apprentice public insurance adjuster license to facilitate the training necessary to ensure reasonable competency in the responsibilities and duties of a public insurance adjuster, and would set forth the various terms and conditions of the license. The bill would make an apprentice public insurance adjuster subject to a felony conviction if he or she knowingly falsifies the fingerprints or photograph submitted as part of his or her application for a license. Because the bill would create a new crime, it would impose a state-mandated local program. (3) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 1722 of the Insurance Code is amended to read: 1722. If a natural person while licensed pursuant to the provisions of this chapter or  Chapters   Chapter  6 (commencing with Section 1760), 7 (commencing with Section 1800), or 8 (commencing with Section 1831) of this part,  or  Part 5 (commencing with Section 12140) of Division 2  , or Chapter 1 (commencing with Section 14000) or 2 (commencing with Section 15000) of Division 5  enters the military service of the United States and is in  such   that  service at a time prescribed for the filing of a renewal application, the filing of  such   that  application is waived, and the license held by  such   that  licensee at the time of his  or her  entry into military service shall remain in force during the period of  such   that  military service and until the end of the license year in which he  or she  is released from  such   that  service but not for less than six months after  such   that  release. During  such   that  period  such   , that  person may secure a license of the type held by him  or her  on his  or her  entry into military service upon the filing of an application and paying the fee therefor without the necessity of taking any examination or paying any penalty. SEC. 2. Section 1751.5 of the Insurance Code is amended to read: 1751.5. The fees required by this chapter and by Chapter 6 (commencing with Section 1760), Chapter 7 (commencing with Section 1800), and Chapter 8 (commencing with Section 1831) of this part  and by   Chapter 1 (commencing with Section 14000) and Chapter 2 (commencing with Section 15000) of Division 5  are filing fees, no portion of which shall be refunded whether or not the application is acted upon or the examination is taken. SEC. 3. Section 14000 of the Insurance Code is amended to read: 14000. This chapter may be cited as the  Independent  Insurance Adjuster Act. SEC. 4. Section 14001 of the Insurance Code is amended to read: 14001. As used in this chapter  , the following terms have the following meanings  :  (a) "Catastrophe" means an event that results in a large number of deaths or injuries, causes extensive damage or destruction of facilities that provide and sustain human needs, produces an overwhelming demand on state and local response resources and mechanisms, causes a severe long-term effect on general economic activity, or severely affects state, local, and private sector capabilities to begin and sustain response activities.   (a)   (b)  "Commissioner" means the Insurance Commissioner.  (b)   (c)  "Department" means the Department of Insurance.  (d) "Fingerprints" means an impression of the lines on the finger taken for the purposes of identification.   (e) "Home state" means the District of Columbia and any state or territory of the United States in which an independent insurance adjuster maintains his, her, or its principal place of residence or business and is licensed to act as a resident independent insurance adjuster. If the resident state does not license independent insurance adjusters, the independent insurance adjuster may designate California as his, her, or its home state, provided that the independent insurance adjuster is licensed and in good standing.   (f) "Individual" means a natural person.   (c)   (g)  "Licensee" means a person licensed under this chapter.  (d)   (h)  "Manager" means the individual under whose direction, control, charge, or management the business of a licensee is operated.  (i) "Nonresident" means a person who is not a resident of California at the time of the performance of the act referred to in Section 14071.   (e)  (j)  "Person" includes any individual, firm, company, association, organization, partnership, limited liability company, and corporation. SEC. 5. Section 14010 of the Insurance Code is repealed.  14010. The department succeeds to and is vested with all the duties, powers, purposes, responsibilities, and jurisdiction previously vested in the Bureau of Collection and Investigative Services with respect to the licensing of insurance adjusters. Any reference to prior licensing shall be deemed to licensing under the Private Investigator and Adjuster Act. The commissioner shall administer and enforce the provisions of this chapter. SEC. 6. Section 14010 is added to the Insurance Code, to read: 14010. The commissioner shall administer and enforce the provisions of this chapter. SEC. 7. Section 14020 of the Insurance Code is amended to read: 14020. No person shall   (a)     A person shall not  engage in a business regulated by this chapter, or act or assume to act as, or represent himself or herself to be, a licensee unless he or she is licensed  under   as an independent insurance adjuster in accordance with  this chapter.  No   (b)     A person shall  not  falsely represent that he or she is employed by a licensee. SEC. 8. Section 14021 of the Insurance Code is repealed.  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.  SEC. 9. Section 14021 is added to the Insurance Code, to read: 14021. An independent insurance adjuster, for purposes of this chapter, is all of the following: (a) An individual, a business entity, an independent contractor, or an employee of a contractor, who contracts for compensation with insurers or self-insurers. (b) A person whose tax treatment by the insurers or self-insurers is consistent with that of an independent contractor rather than an employee, as defined in Section 3121 of Title 26 of the United States Code. (c) A person who investigates, negotiates, or settles property, casualty, or workers' compensation claims for insurers or for self-insurers. SEC. 10. Section 14022 of the Insurance Code is amended to read: 14022. This chapter does not apply to  any of the following  :  (a) A person employed exclusively and regularly by one employer in connection with the affairs of such employer only and where there exists an employer- employee relationship.   (b)   (a) An officer or employee of the United States of America, or of this state or a political subdivision thereof, while  such   that  officer or employee is engaged in the performance of his or her official duties.  (c)   (b)  A person engaged exclusively in the business of obtaining and furnishing information as to the financial rating of persons.  (d)   (c)  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)   (d)  An attorney at law  in performing his or her duties as such attorney at law.   admitted to practice in California, when acting in his or her professional   capacity as an attorney.   (f)  (e)  A licensed collection agency or an employee thereof while acting within the scope of his or her employment, while making an investigation incidental to the business of the agency, including an investigation of the location of a debtor or his or her property where 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.   (f) An officer, director, manager, or employee of an authorized insurer, surplus line insurer, a risk retention group, or an attorney-in-fact of a reciprocal insurer.   (g) A licensed insurance agent or broker, attorney-in-fact of a reciprocal insurer, or managing general agent of the insurer to whom claim authority has been granted by the insurer.  (h) The legal owner of personal property  which   that  has been sold under a conditional sales agreement or a mortgagee under the terms of a chattel mortgage. (i) Any bank subject to the jurisdiction of the Commissioner  of Financial Institutions of the State of California   of Business Oversight  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.   employed solely to obtain facts surrounding a claim or to furnish technical assistance to a licensed independent insurance adjuster.  (k) Any building contractor, engineer, technical expert, or other person who is engaged by an insurer or licensed  independent insurance  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.  (l) An individual who is employed to investigate suspected fraudulent insurance claims but who does not adjust losses or determine claims payments.   (m) A person who solely performs executive, administrative, managerial, or clerical duties or any combination thereof and who does not investigate, negotiate, or settle claims with policyholders, claimants, or their legal representative.   (n) A licensed health care provider or its employee who provides managed care if the services do not include the determination of compensability.   (o) A managed care organization or any of its employees who provide managed care services if the services do not include the determination of compensability.   (p) A person who settles only reinsurance or subrogation claims.   (q) A United States manager of the United States branch of an alien insurer.   (r) A person who investigates, negotiates, or settles life, accident and health, annuity, or disability insurance claims.   (s) An individual employee, under a self-insured arrangement, who adjusts claims on behalf of his or her employer.  SEC. 11. Section 14022.5 of the Insurance Code is amended to read: 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  independent insurance  adjuster upon registration with the commissioner if all of the following requirements are met: (1) The work performed by the nonlicensed  independent insurance  adjuster is under the active direction, control, charge, or management of a licensed independent insurance  adjuster or an insurer authorized to do business in this state. (2) Registration with the commissioner is accomplished within  15   five  working days from the date on which the nonlicensed  independent insurance  adjuster commences the claims adjusting activity in connection with the emergency situation. (b) "Registration," within the meaning of this section,  shall mean   means  a written letter to the commissioner, submitted by the supervising licensed  independent insurance  adjuster or admitted insurer, naming the nonlicensed  independent insurance  adjusters, identifying their  independent insurance  adjuster licenses held in other jurisdictions, and stating when their claims adjusting activity commenced. (c) Registration under this section is valid for a period of  180   90  days from the date of the registration letter. Before the lapse of that period, the commissioner may grant further  180-day   90-day  extensions as he or she deems appropriate upon written request from the supervising licensed  independent insurance  adjuster or the admitted insurer. SEC. 12. Section 14024 of the Insurance Code is amended to read: 14024.  An   (a)     An individual  application shall be verified and shall include  all of the following  :  (a)   (1)  The full  legal  name and  business address   business, resident, and mailing addresses  of the applicant.  (b)   (2)  The name under which  the  applicant intends to do business.  (3) The applicant's birth date and social security number.   (4) The application fees set forth in Section 14097.   (c)   (5)  A statement as to the general nature of the business in which the applicant intends to engage.  (d)   (6)  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)   (7)  Two recent photographs of the applicant, of a type prescribed by the commissioner, and  two   one  classifiable  sets   set  of his or her  fingerprints.   fingerprints, to be sent to a live scan fingerprint provider as directed by the department, if fingerprints are not submitted in person with a live scan fingerprinting service provider certified by the Department of Justice.   (g)   (8)  A verified statement of his or her experience  qualifications.   qualifications, unless applying for an apprentice independent insurance adjuster license.   (h) Such other information, evidence, statements, or documents as may be required by the commissioner.   (9) Other information, evidence, statements, or documents as may be required by the commissioner.   (b) A business entity application shall be verified and shall include all of the following:   (1) The full legal name and residence address of each of its partners, officers, and directors, and its manager.   (2) The name under which the applicant intends to do business.   (3) The name of a licensed independent insurance adjuster who is responsible for the business entities compliance with this chapter.   (4) That the applicant paid the fees set forth in Section 14097.   (5) A statement as to the general nature of the business in which the applicant intends to engage.   (6) A statement as to the classifications under which the applicant desires to be qualified.   (7) Other information, evidence, statements, or documents as may be required by the commissioner.  SEC. 13. Section 14025 of the Insurance Code is amended to read: 14025. Before  an application for  a license is granted, the applicant , or his or her manager,  shall meet all of the following  requirements : (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.   Sections 1668 and 1669.  (c) Shall have had at least two years of experience in adjusting insurance claims or the equivalent thereof as determined by the  commissioner.   commissioner, unless applying for an apprentice independent insurance adjuster license.   (d) If the applicant resides in a state that does not license independent insurance adjusters, he or she is required to be licensed in good standing to designate California as his or her home state.   (e) (1) Completed a 20-hour prelicensing education course of study.   (2) A nonresident applicant currently licensed as a home state independent insurance adjuster in another state who has met that state's prelicensing education requirements is exempt from completing the prelicensing education requirement.   (f) Successfully passed the examination for the independent insurance adjuster license, unless he or she qualifies for an exemption in Section 14026.   (d)   (g)  Comply with  such   those  other qualifications  as   that  the commissioner may  fix by rule.   require by regulation.  SEC. 14. Section 14025.1 is added to the Insurance Code, to read: 14025.1. (a) The apprentice independent insurance adjuster license is a license to facilitate the experience, education, and training necessary to ensure reasonable competency in the responsibilities and duties of an independent insurance adjuster. (b) An individual applying for an apprentice independent insurance adjuster license shall submit an application in a format prescribed by the commissioner and shall declare under penalty of suspension, revocation, or refusal of the license that the statements made in the application are true, correct, and complete to the best of the individual's knowledge and belief. Before approving the application, the commissioner shall determine that the individual meets all of the following: (1) Is at least 18 years of age. (2) Is a resident of California and has designated California as his or her home state. (3) Has a business or mailing address in California for the acceptance of service of process. (4) Has not committed any act that is a ground for suspension, revocation, or denial of licensure as set forth in Sections 1668, 1668.1, and 1669. (5) Is trustworthy, reliable, and of good reputation, evidence of which may be determined by the commissioner. (6) Has paid the fees set forth in subdivision (h) of Section 14097. (c) The apprentice independent insurance adjuster license shall be subject to the following terms and conditions: (1) The applicant shall submit, with the apprentice independent insurance adjuster application, an attestation from a licensed independent insurance adjuster certifying that the apprentice will be subject to training, direction, and control by the licensed independent insurance adjuster and further certifying that the licensed independent insurance adjuster assumes responsibility for the actions of the apprentice in the apprentice's capacity as an independent insurance adjuster. (2) The apprentice independent insurance adjuster is only authorized to adjust claims in California. (3) The apprentice independent insurance adjuster is restricted to participation in the investigation, settlement, and negotiation of claims subject to the review and final determination of the claim by a supervising licensed independent insurance adjuster. (4) Compensation of an apprentice independent insurance adjuster shall only be on a salaried or hourly basis. (5) The apprentice independent insurance adjuster shall not be required to take and successfully complete the independent insurance adjuster examination to adjust claims as an apprentice independent insurance adjuster. At any time during the apprenticeship, the apprentice independent insurance adjuster may choose to take the examination. If the individual takes and successfully completes the independent insurance adjuster exam, the apprentice independent insurance adjuster license shall automatically terminate and an independent insurance adjuster license shall be issued to that individual in its place. (6) The apprentice independent insurance adjuster license is valid for a period not to exceed 12 months and is nonrenewable. (7) The licensee shall be subject to suspension, revocation, or denial pursuant to Sections 1668, 1668.1, and 1669. (8) The applicant shall submit two recent photographs of the applicant, of a type prescribed by the commissioner, and one classifiable set of his or her fingerprints, to be sent to a live scan fingerprint provider as directed by the department, if fingerprints are not submitted in person with a live scan fingerprinting service provider certified by the Department of Justice. SEC. 15. Section 14026 of the Insurance Code is repealed.  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.  SEC. 16. Section 14026 is added to the Insurance Code, to read: 14026. (a) An applicant for an independent insurance adjuster license, unless applying for an apprentice independent insurance adjuster license or crop insurance adjuster license, shall pass a written examination. (1) The examination shall test the knowledge of the applicant concerning the duties and responsibilities of an independent insurance adjuster and this code. (2) An applicant applying for an examination shall remit a nonrefundable fee as prescribed by the commissioner in Section 14097. (b) An individual who applies for an independent insurance adjuster license in California who holds a home state license in another state as an independent insurance adjuster shall not be required to complete the examination if he or she successfully passed an examination as a condition of receiving an independent insurance adjuster license in his or her home state. This exemption applies to individuals who are currently licensed in their home state or if the home state license expired and the application is received by the commissioner within 90 days of expiration. (c) An individual who applies for an apprentice independent insurance adjuster license pursuant to Section 14025.1, and who adjusts claims in that capacity, shall not be required to take and successfully complete the independent insurance adjuster examination. SEC. 17. Section 14027 of the Insurance Code is repealed.  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.  SEC. 18. Section 14028 of the Insurance Code is amended to read: 14028. After a  hearing   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  done any of the following  :  (a) Committed any acts or crimes constituting grounds for denial of licensure under Section 480 of the Business and Professions Code.   (b)   (a)  Been refused a license under this chapter or had a license revoked.  (c)  (b)  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)   (c) While unlicensed committed, or aided and abetted the commission of, any act for which a license is required by this chapter.  (e)   (d)  Committed any act or crime constituting grounds for denial of  license   licensure  under Section 1668. SEC. 19. Section 14029 of the Insurance Code is repealed.  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).  SEC. 20. Section 14029 is added to the Insurance Code, to read: 14029. Each organization licensed under this chapter shall designate an individual also licensed as an independent insurance adjuster to be responsible for the organization's compliance with state law. SEC. 21. Section 14030 of the Insurance Code is repealed.  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.  SEC. 22. Section 14031 of the Insurance Code is amended to read: 14031.  Whenever a   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. SEC. 23. Section 14032 of the Insurance Code is amended to read: 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.   commissioner.  SEC. 24. Section 14037 of the Insurance Code is repealed.  14037. A licensee shall at all times be legally responsible for the good conduct in the business of each of his or her employees or agents, including his or her manager.  SEC. 25. Section 14038 of the Insurance Code is amended to read: 14038. (a) Any licensee or officer, director,  partner, or manager   or partner  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   A   licensee  or officer, director,  partner, manager, or employee   or partner  of a licensee shall  not  knowingly make any false report to his or her employer or client for whom information was being obtained. (c)  No written   A written  report shall  not  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   licensee who  shall exercise diligence in ascertaining whether or not the facts and information in  such a   that  report are true and correct. (d)  No licensee,   A licensee  or officer, director,  partner, manager, or employee   or partner  of a licensee shall  not  use a badge in connection with the official activities of the licensee's business. (e)  No licensee,   A 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 partner of a licensee shall not use   a title, wear a uniform, use an insignia, 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,   A licensee  or officer, director,  partner, manager, or employee   or partner  of a licensee, shall  not  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   A   licensee shall not  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   A licensee shall not permit an  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   A   licensee  acting as an independent automobile damage appraiser or adjuster or as an automobile insurance claims adjuster,  appraiser   appraiser,  or representative shall  not  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. SEC. 26. Section 14039 of the Insurance Code is amended to read: 14039.  No   A  person licensed as an  independent  insurance adjuster shall  not  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   that  obtains business in connection with any claim  which   that  he or she has a contract or agreement to adjust. SEC. 27. Section 14040 of the Insurance Code is amended to read: 14040. Any badge or cap insignia worn by a person who is a licensee, officer, director,  partner, manager, or employee   or partner  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.   licensee.  SEC. 28. Section 14042 of the Insurance Code is amended to read: 14042.  No licensee shall   (a)     A licensee shall not  conduct a business under a fictitious or other business name unless and until he or she has obtained the written authorization of the commissioner to do so.  The   (b)     The  commissioner shall not authorize the use of a fictitious or other business name  which   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   (c)     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.   1724.5.   A   (d)     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 such   that  name.  The   (e)     The  licensee shall pay a fee of ten dollars ($10) 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 twelve dollars ($12) for  such   that  authorization. SEC. 29. Section 14061 of the Insurance Code is amended to read: 14061. The commissioner may suspend or revoke a license issued under this chapter or may issue a restricted license in accordance with Section 14026.5 if he or she determines that the  licensee, or his or her manager, if an individual,   licensee  or if the licensee is a person other than an individual, that any of its officers, directors, partners, or its  manager,   designated responsible person  has  done any of the following  : (a) Made any false statement or given any false information in connection with an application for a license or a renewal or reinstatement of a license. (b) Violated any provisions of this chapter. (c) Violated any rule of the commissioner adopted pursuant to the authority contained in this chapter. (d) Been convicted of any crime substantially related to the qualifications,  functions   functions,  and duties of the holder of the registration or license in question. (e) Impersonated, or permitted or aided and abetted an employee to  impersonate   impersonate,  a law enforcement officer or employee of the United States of America, or of any state or political subdivision thereof. (f) Committed or permitted any employee to commit any act, while the license was expired  which   that  would be cause for the suspension or revocation of a license, or grounds for the denial of an application for a license. (g) Willfully failed or refused to render to a client services or a report as agreed between the parties and for which compensation has been paid or tendered in accordance with the agreement of the parties. (h) Committed assault, battery, or kidnapping, or used force or violence on any person, without proper justification. (i) Knowingly  violated,   violated  or advised, encouraged, or assisted the violation of any court order or injunction in the course of business as a licensee. (j) Acted as a runner or capper for any attorney. (k) Committed any act  which   that  is a ground for denial of an application for license under this chapter. (  l  ) Purchased, possessed, or transported any tear gas weapon except as authorized by law. A violation of this subdivision may be punished by the suspension of a license for a period to be determined by the commissioner. SEC. 30. Section 14063 of the Insurance Code is amended to read: 14063. The commissioner may suspend or revoke a license issued under this chapter or may issue a restricted license in accordance with Section 14026.5 if the commissioner determines that the  licensee, or his or her manager,   licensee,  if an individual, or if the licensee is a person other than an individual, that any of its officers, directors, partners, or its  manager, has   designated responsible person has done any of the following  : (a) Used any letterhead, advertisement, or other printed matter, or in any matter whatever represented that he or she is an instrumentality of the federal government,  or of  a state or any political subdivision thereof. (b) Used a name different from that under which he or she is currently licensed in any advertisement, solicitation, or contract for business. SEC. 31. Section 14064 of the Insurance Code is amended to read: 14064.  (a)    The commissioner may suspend or revoke a license issued under this chapter or may issue a restricted license in accordance with Section 14026.5 if the commissioner determines that the  licensee, or his or her manager,   licensee,  if an individual, or if the licensee is a person other than an individual, that any of its officers, directors, partners, or its  manager,   designated responsible person  has committed any act in the course of the licensee's business constituting dishonesty or fraud.  "Dishonesty   (b)     "Dishonesty  or fraud" as used in this section includes, in addition to other acts not specifically enumerated herein, all of the following:  (a)   (1)  Knowingly making a false statement relating to evidence or information obtained in the course of employment, or knowingly publishing a slander or a libel in the course of business.  (b)   (2)  Using illegal means in the collection or attempted collection of a debt or obligation.  (c)   (3)  Manufacture of evidence.  (d)   (4)  Acceptance of employment adverse to a client or former client relating to a matter with respect to which the licensee has obtained confidential information by reason of or in the course of his or her employment by  such  that  client or former client.  (e)   (5)  Impersonating, or permitting or aiding and abetting an employee to  impersonate   impersonate,  a law enforcement officer or employee of the United States of America, or of any state or political subdivision thereof. SEC. 32. Section 14078 of the Insurance Code is repealed.  14078. As used in this article, "nonresident" means a person who is not a resident of this state at the time of the performance of the act referred to in Section 14071.  SEC. 33. Section 14078 is added to the Insurance Code, to read: 14078. (a) Unless refused licensure pursuant to Sections 14060 to 14065, inclusive, a nonresident person shall receive a nonresident independent insurance adjuster license if all of the following apply: (1) The applicant is currently licensed in good standing as an independent insurance adjuster in his, her, or its resident or home state. (2) The applicant paid the fees required by Section 14097. (3) The applicant submitted to the commissioner the completed application for licensure. (4) The applicant's home state awards nonresident independent insurance adjuster licenses to residents of California on the same basis. (b) The commissioner may verify the independent insurance adjuster' s licensing status through any appropriate database, including the Producer Database maintained by the National Association of Insurance Commissioners, its affiliates or subsidiaries, or may request certification of good standing. (c) As a condition to the continuation of a nonresident independent insurance adjuster license, the licensee shall maintain a resident independent insurance adjuster license in his, her, or its home state. (1) The nonresident independent insurance adjuster license issued under this chapter shall terminate and be surrendered immediately to the commissioner if the resident independent insurance adjuster license terminates for any reason, unless the termination is due to the independent insurance adjuster being issued a new resident independent insurance adjuster license in his, her, or its new home state. (2) The nonresident independent insurance adjuster license shall terminate if the person's home state does not award nonresident independent insurance adjuster licenses to residents of California on the same basis. (3) (A) The licensee is required to give notice of resident independent insurance adjuster license termination to any state that issued a nonresident independent insurance adjuster license. (B) The notice is required to be given within 30 days of the termination date. If the resident independent insurance adjuster license was terminated for change in resident home state, then the notice is required to include both the previous and current address. (4) Maintaining a resident independent insurance adjuster license is required for the nonresident independent insurance adjuster license to remain valid. SEC. 34. Section 14079 is added to the Insurance Code, to read: 14079. (a) An independent insurance adjuster shall be honest and fair in all communications with the insured, the insurer, and the public. (b) An independent insurance adjuster shall provide policyholders and claimants with prompt and knowledgeable service and courteous, fair, and objective treatment at all times. (c) An independent insurance adjuster shall not give legal advice and shall not deal directly with any policyholder or claimant who is represented by legal counsel without the consent of the legal counsel involved. (d) An independent insurance adjuster shall comply with all local, state, and federal privacy and information security laws. (e) An independent insurance adjuster shall identify himself or herself as an independent insurance adjuster and, if applicable, shall identify his or her employer when dealing with any policyholder or claimant. (f) An independent insurance adjuster shall not have any financial interest in any adjustment or shall not acquire for himself, herself, or any person any interest or title in salvage, without first receiving written authority from the principal. SEC. 35. Section 14080 of the Insurance Code is amended to read: 14080. Any person who knowingly falsifies the fingerprints or photographs submitted under  paragraph (7) of  subdivision  (f)   (a)  of Section 14024  or paragraph (8) of subdivision (c) of Section 14025.1  is guilty of a felony. Any person who violates any of the other provisions of this chapter is guilty of a misdemeanor punishable by fine not to exceed five hundred dollars ($500), or by imprisonment in the county jail not to exceed one year, or by both  such   the  fine and imprisonment. SEC. 36. Section 14090.1 of the Insurance Code is amended to read: 14090.1. (a) An individual who holds an  independent  insurance adjuster license and who is not exempt under subdivision (b) shall satisfactorily complete a minimum of 24 hours, of which three hours are to be in ethics, of continuing education courses pertinent to the duties and responsibilities of an  independent  insurance adjuster  license reported   license and shall report the completion of this coursework  to the insurance commissioner on a biennial basis in conjunction with his or her license renewal cycle. (b) This section does not apply to any of the following: (1) A licensee not licensed for one full year prior to the end of the applicable continuing education biennium. (2) A licensee holding a nonresident  independent  insurance adjuster license who has met the continuing education requirements of his or her designated  resident   home  state. (3) An individual licensed as an  independent  insurance adjuster and as a property or casualty broker-agent, pursuant to Section 1625, who has met the continuing education requirements specified in Section 1749.3.  (4) An individual licensed as an apprentice independent insurance adjuster pursuant to Section 14025.1.  SEC. 37. Section 14097 of the Insurance Code is amended to read: 14097. The amount of fees prescribed by this chapter, unless otherwise fixed, is that fixed in the following schedule: (a) The application fee  for the qualifying examination  for an original license is twenty-nine dollars ($29). (b) The application fee for an original branch office certificate is eighteen dollars ($18). (c) The fee for an original license  application  is an amount equal to the renewal fee in effect on the last regular renewal date before the date on which the license is issued, except that, if the license will expire less than one year after its issuance, then the fee is an amount equal to 50 percent of the renewal fee in effect on the last regular renewal date before the date on which the license is issued. The commissioner may, by appropriate regulation, provide for the waiver or refund of the initial license fee where the license is issued less than 45 days before the date on which it will expire. (d) The renewal fee shall be fixed by the commissioner as follows: (1) For a license as an  independent  insurance adjuster, not more than one hundred eighteen dollars ($118). (2) For a branch office certificate, not more than twenty-four dollars ($24). (e) The application and license fee for classifications prescribed by the commissioner, in addition to those provided for in this chapter, and the application and license fees for a change in the type of business organization of a licensee, shall be in the amount prescribed by rule and regulation of the commissioner. (f) The delinquency fee shall be 50 percent of the renewal fee in effect on the date of  expiration, but not more than twenty-nine dollars ($29).   expiration.  (g) The fee for reexamination of an applicant  or his manager  is twelve dollars ($12).  (h) The application fee for an apprentice independent insurance adjuster license shall be fixed by the commissioner by regulation and shall be reasonably related to the actual cost to the department in performing its duties under this chapter.  SEC. 38. Section 14099 of the Insurance Code is amended to read: 14099. Application or license fee   fees  shall not be refunded  except in accordance with Section 158 of the Business and Professions Code.   pursuant to Section 1751.5. SEC. 39. Section 15001 of the Insurance Code is amended to read: 15001. As used in this chapter  the following terms have the following meanings  : (a) "Commissioner" means the Insurance Commissioner. (b) "Department" means the Department of Insurance.  (c) "Fingerprints" means an impression of the lines on the finger taken for the purposes of identification   (d) "Home state" means the District of Columbia and any state or territory of the United States in which the public insurance adjuster' s principal place of residence or principal place of business is located. If neither the state in which the public insurance adjuster maintains the principal place of residence nor the state in which the public insurance adjuster maintains the principal place of business has a substantially similar law governing public insurance adjusters, the public insurance adjuster may declare another state in which it becomes licensed and acts as a public insurance adjuster to be the "home state."   (c)   (e)  "Licensee" means a person licensed under this chapter.  (d)   (f)  "Person" includes any individual, firm, company, association, organization, partnership, limited liability company, and corporation. SEC. 40. Section 15007 of the Insurance Code is repealed.  15007. A public insurance adjuster within the meaning of this chapter is a person who, for compensation, acts on behalf of or aids in any manner, an insured in negotiating for or effecting the settlement of a claim or claims for loss or damage under any policy of insurance covering real or personal property or any person who advertises, solicits business, or holds himself or herself out to the public as an adjuster of those claims and any person who, for compensation, investigates, settles, adjusts, advises, or assists an insured with reference to claims for those losses on behalf of any public insurance adjuster.  SEC. 41. Section 15007 is added to the Insurance Code, to read: 15007. "Public insurance adjuster," for purposes of this chapter, means any person who, for compensation or any other thing of value on behalf of an insured, does any of the following: (a) Acts or aids, solely in relation to first party claims arising under insurance contracts that insure the real or personal property of the insured, on behalf of an insured in negotiating for, or effecting the settlement of, a claim for loss or damage coverage by an insurance contract. (b) Advertises for employment as a public adjuster of insurance claims or solicits business or represents himself or herself to the public as a public insurance adjuster of first party insurance claims for losses or damages arising out of policies of insurance that insure real or personal property. (c) Directly or indirectly solicits business, investigates, or adjusts losses, or advises an insured about first party claims for losses or damages arising out of policies of insurance that insure real or personal property for another person engaged in the business of adjusting losses or damages covered by an insurance policy, for the insured. SEC. 42. Section 15008 of the Insurance Code is amended to read: 15008. This chapter does not apply to  any of the following  : (a) An officer or employee of the United States of  America   America,  or of the state or of a political subdivision thereof while the officer or employee is engaged in the performance of his or her official duties. (b) A charitable philanthropic society duly incorporated under the laws of this state  which   that  is organized and maintained for the public good and not for private profit. (c) An attorney at law in performing his or her duties as an attorney at law. (d) Admitted insurers, agents, and insurance brokers licensed by the state performing duties in connection with insurance transactions by them. (e) The legal owner of personal property  which   that  has been sold under a conditional sales agreement or a mortgagee under the terms of a chattel mortgage. (f) Any salaried office employee who performs exclusively clerical and administrative duties attendant to the disposition of the business regulated by this chapter. (g) Photographers, estimators, appraisers, engineers, and arbitrators, who are employed exclusively by a public insurance adjuster for the purpose of furnishing technical assistance to a licensed public insurance adjuster. (h) A private investigator licensed pursuant to Chapter  11.5   11.3  (commencing with Section 7512) of Division 3 of the Business and Professions Code while acting within the scope of that license.  (i) A person who negotiates or settles claims arising under a life or health insurance policy or an annuity contract.   (j) A licensed health care provider, or employee of a licensed health care provider, who prepares or files a health claim form on behalf of a patient.   (k) A person who settles subrogation claims between insurers.  SEC. 43. Section 15009.1 is added to the Insurance Code, to read: 15009.1. (a) The applicant shall complete a 20-hour prelicensing course of study for the lines of authority for a public insurance adjuster license. (b) An applicant who resides in another state that does not license public insurance adjusters is eligible to designate California as his or her home state. He or she is required to complete the prelicensing education, pass the public insurance adjuster examination, and meet the license application requirements before a license can be issued. (c) An applicant licensed as a public insurance adjuster in another state is exempt from completing a prelicensing education course to apply for a California public insurance adjuster license if, at the time of application, the applicant's out-of-state license is current or was canceled within 90 calendar days. The applicant is required to be a licensee in good standing in his or her home state. SEC. 44. Section 15010 of the Insurance Code is amended to read: 15010. An application shall be verified and shall include all of the following: (a) The full name and business address of the applicant. (b) The name under which the applicant intends to do business. (c) A statement as to the general nature of the business in which the applicant intends to engage. (d) A statement as to the  classification or  classifications under which the applicant desires to be qualified. (e) If the applicant is a person other than an individual, the full name and resident address of each of its partners, officers, and directors. (f) Two recent photographs of the applicant, of  the   a  type prescribed by the commissioner, and  two   one  classifiable  sets   set  of his or her  fingerprints.   fingerprints, to be sent to a live scan fingerprint provider as directed by the department, if fingerprints are not submitted in person with a live scan fingerprinting service provider certified   by the Department of Justice.  (g) A verified statement of his or her experience qualifications. (h)  Such other   Other  information, evidence,  statements   statements,  or documents as may be required by the commissioner. SEC. 45. Section 15011 of the Insurance Code is amended to read: 15011. Before an application for a license is granted, the applicant shall meet all of the following  requirements  : (a) Be at least 18 years of age. (b) Be a bona fide resident of the State of California. (c)  Must be   Be  of good character and shall not have committed acts or crimes constituting grounds for denial of licensure under Section 1668 or 1669. (d) Shall have had sufficient experience, or special education or training, or both, in the handling of loss claims under insurance contracts as determined by regulations adopted by the commissioner, and  is   be  competent to transact business and discharge the responsibilities of a public insurance adjuster in  such  a manner as to safeguard the interests of the public. (e)  Must maintain   Maintain  an office in the State of California with public access during regular business hours. (f) Pass an exam given by the commissioner in regard to property loss adjusting. (g) Post a surety bond executed by a surety company authorized to do business in this state in the sum of twenty thousand dollars ($20,000).  (h) For an organization applicant, designate a licensed individual public insurance adjuster to be responsible for the organization's compliance with the insurance laws, rules, and regulations of this state.   (i) For an organization applicant, authorize only licensed individual public insurance adjusters to exercise authority under the organization's license.   (h)   (j)  Comply with any other qualifications as required by the commissioner. SEC. 46. Section 15013 of the Insurance Code is amended to read: 15013. Each applicant for a license as a public insurance  adjuster, except as provided in Section 15014,   adjuster  shall, prior to issuance of the license, personally take and pass, to the satisfaction of the commissioner, an examination given by the department as follows: (a) The examination shall be prescribed by the commissioner and shall be of sufficient scope  to  reasonably  to  test the applicant's  knowlege  knowledge  , among other things, of basic insurance theory, essential elements of contracts, technical competence in the handling of the various lines for which the applicant is being tested, claims ethics and knowledge of the Unfair  Claims  Practices Act, and the duties and responsibilities of public insurance adjusters under the law. (b)  Such   The  examination shall be given to applicants under the supervision of the  department of this state,   department or the department's   examination contractor  and shall be in written form. (c) The commissioner shall, within a reasonable period of time, not to exceed 30 days, transmit the results of the examination and action taken on the application to the applicant. (d) In the event an  applicant,   applicant  who is otherwise  qualified,   qualified  fails the examination, the commissioner may administer a  reexamination,   reexamination  after a waiting period not to exceed six months. (e) The examination shall be given at those times and places within the state as the commissioner deems reasonably necessary to serve the convenience of the department and applicants. SEC. 47. Section 15015 of the Insurance Code is repealed.  15015. Payment of the application fee prescribed by this chapter entitles the applicant to one examination without further charge. If the person fails to pass the examination, he or she shall not be eligible for any subsequent examination except upon payment of the reexamination fee prescribed by this chapter for each subsequent examination.  SEC. 48. Section 15016 of the Insurance Code is repealed.  15016. (a) The commissioner shall issue an interim license to all qualified individuals for the purpose of training so long as the persons meet all of the following requirements: (1) Are employed and under the direct supervision of a person licensed under the provisions of this chapter. (2) Qualify under the applicable provisions of Section 15011. (3) Pay a license fee of one hundred dollars ($100). (4) Comply with any other qualifications required by the commissioner. (b) An interim license may be issued for a period not to exceed one year and may not be renewed.  SEC. 49. Section 15016 is added to the Insurance Code, to read: 15016. (a) The apprentice public insurance adjuster license is a license to facilitate the training necessary to ensure reasonable competency to fulfill the responsibilities of a public insurance adjuster as defined in Section 15007. (b) The apprentice public insurance adjuster license is subject to the following terms and conditions: (1) The applicant shall submit, with an application for an initial apprentice public insurance adjuster license, an attestation or certification from a licensed public insurance adjuster assuming responsibility for all actions of that applicant. (2) The apprentice public insurance adjuster is authorized to adjust claims only in California. (3) The applicant is required to qualify under the applicable provisions of Section 15011. (4) The applicant is required to pay a license fee of one hundred dollars ($100). (5) The applicant is required to comply with any other qualifications required by the commissioner. (6) The apprentice public insurance adjuster shall not be required to take and successfully complete the prescribed public insurance adjuster examination. (7) The licensee shall at all times be an employee of a public insurance adjuster and be subject to training, direction, and control by a licensed public insurance adjuster. (8) The apprentice public insurance adjuster license is for a period not to exceed 12 months, and the license shall not be renewed. (9) The licensee is restricted to participation in factual investigation, tentative closing, and solicitation of losses subject to the review and final determination of a licensed public insurance adjuster. (10) Compensation of an apprentice public insurance adjuster shall only be on a salaried or hourly basis. (11) The licensee shall be subject to suspension, revocation, or conditions in accordance with Section 1668. (12) The applicant shall submit two recent photographs of the applicant, of a type prescribed by the commissioner, and one classifiable set of his or her fingerprints, to be sent to a live scan fingerprint provider as directed by the department, if fingerprints are not submitted in person with a live scan fingerprinting service provider certified by the Department of Justice. SEC. 50. Section 15017 of the Insurance Code is amended to read: 15017.  (a)    A nonresident license shall be issued by the commissioner to qualified persons who meet the requirements of this chapter as set forth in subdivisions (a), (c), (d), (e), (f), (g), and  (h)   (j)  of Section  15011   15011,  and who have appointed the commissioner as an agent for service of process in this state.  (b) Unless denied licensure pursuant to Sections 15018, 15018.5, and 15019, a nonresident person shall receive a nonresident public insurance adjuster license if all of the following apply:  (1) The person is currently licensed in good standing as a public insurance adjuster in his or her home state.   (2) The person has paid the fees required by Section 15060.   (3) The person has provided proof of financial responsibility as required by Section 15033.   (4) The individual has submitted to the commissioner the completed application for licensure.   (5) The person's home state awards nonresident public insurance adjuster licenses to residents of California on the same basis.  SEC. 51. Section 15020 of the Insurance Code is amended to read: 15020. The form and content of the license shall be determined by the  commissioner in accordance with Section 164 of the Business and Professions Code.   commissioner.  SEC. 52. Section 15027 of the Insurance Code is amended to read: 15027. (a)  No   A  licensee shall  not  , directly or indirectly, act within this state as a public insurance adjuster without having first entered into a contract, in writing, on a form approved by the insurance commissioner and executed in duplicate by the public adjuster and the insured or a duly authorized representative. One original contract shall be kept on file by the licensee, available at all times for inspection, without notice, by the commissioner or his or her duly authorized representative, and one original contract shall be given to the insured. (b) The written contract between the licensee and the insured shall contain each of the following: (1) Title of "Public Adjuster Contract." (2) The name, business name, license number, telephone number, and address of the licensee. (3) The name and address of the insured. (4) A description of the loss and its location, if applicable. (5) The name of the insurer and the policy number, if known. (6) The full salary, fee, commission, or other consideration the licensee is to receive for services under the contract.  (7) The following statement: "No public adjuster shall charge a fee, commission, or other valuable consideration based, in whole or in part, on any amount paid to the insured by the insurer prior to the date of the written contract between the insured and the public adjuster."   (7)   (8)  A description of the services to be provided to the insured.  (8)   (9)  Signatures of the licensee and the insured.  (9)   (10)  The date the contract was signed by the licensee and the date the contract was signed by the insured.  (10)   (11)  The following statement: "As a public adjuster, I am required by the California Insurance Code to post a surety bond in the sum of $20,000 to cover certain kinds of claims made by you, the insured. If you have any questions concerning the surety bond, you may contact the California Department of Insurance Producer Licensing Call Center at 1-800-967-9331 or www.insurance.ca.gov."  (11)   (12)  A statement of the compensation to the licensee, including the percentage and base to which the percentage applies.  (12)   (13)  A statement that the insured has the right to rescind the contract within  three business   seven calendar  days of signing it. (c) A contract covered by this section shall not contain a contract term that does any of the following: (1) Allows the licensee's fee to be collected when money is due from an insurer, but not paid, or allows a licensee to collect the entire fee from the first payment issued by an insurer, rather than as a percentage of each payment issued by an insurer. (2) Requires the insured to authorize an insurer to issue a payment only in the name of the licensee. (3) Imposes late fees or collection costs on the insured. (d)  No   A  licensee shall  not  solicit or attempt to solicit a client for employment during  the progress of  a loss-producing occurrence.  A loss-producing occurrence continues to exist under any of the following   conditions:   (1) Any of the circumstances that caused the loss are present.   (2) Emergency responders are present.   (3) An evacuation order is still in effect.  (e)  No   A  licensee or any other person or entity offering, for a fee, service regulated by this chapter shall  not  solicit a  client   policyholder  for employment or initiate any contact with a policyholder between the hours of 6 p.m. and 8 a.m. (f)  No   A  licensee shall  not  use any form of contract other than that approved by the commissioner and  which   that  contains each of the following: (1) A provision allowing the client to rescind the contract by written notice sent or delivered by certified mail, return receipt requested, or other form of mailing  which   that  provides proof of mailing, to the licensee by midnight of the  third business   seventh calendar  day after the day on which the client signs a contract  which   that  complies with this section. Each copy of the contract shall contain a completed form, captioned "Notice of Cancellation,"  which   that  shall be placed at the end of the contract and be separated from the remainder of the contract by a printed line. Nothing shall be printed on the reverse side of the notice form. The notice form shall be completed by the licensee, and shall contain in type of at least 10-point the following statement written in the same language, e.g., Spanish, as used in the contract: Notice of Cancellation _____________________________ (Date of Contract) You may cancel this contract within  three business   seven calendar  days from the above date without any penalty or obligation to pay your public adjuster, other than for reimbursement of moneys paid by your public adjuster for out-of-pocket emergency expenses for you or on your behalf. If your public adjuster seeks reimbursement from you for out-of-pocket emergency expenses, your public adjuster shall provide you with an itemized statement of those emergency expenses advanced to you or on your behalf if the cancellation is made within the first  three business   seven calendar  days after the contract was initiated. Nothing in this contract permits your public adjuster to recover any costs, except for out-of-pocket emergency expenses advanced to you. If you cancel, any money or other consideration paid by you will be returned within five business days following the receipt of your cancellation notice, and any security interest arising out of the transaction will be canceled. To cancel this contract, mail or deliver by certified mail, return receipt requested, or other form of mailing  which   that  provides proof of mailing, a signed and dated copy of this cancellation notice, or any other written notice, or send a telegram to: _________________________________________________ (name of public adjuster) at _________________________________________________ (address of public adjuster's place of business) not later than midnight of_______________________ (Date) I hereby cancel this contract____________________ (Date) _________________________________________________ (Client's signature) (2) The statement "WE REPRESENT THE INSURED ONLY" prominently displayed in at least 10-point type. (3) A provision disclosing the percentage of the insured's claim, or other fee, that the licensee will charge for his or her services. The licensee shall obtain the initials of the insured next to this provision. (4) A conspicuous statement in at least 10-point type in immediate proximity to the space reserved for the client's signature, as follows: "You may cancel this contract at any time before midnight of the  third business   seventh calendar  day after the date of this contract. See the notice of cancellation form at the end of this contract for an explanation of this right." (g)  No   A    licensee shall  not  knowingly make any false report to his or her employer or divulge to any other person, except as he or she may be required by law to do so, any information acquired by him or her except at the direction of the employer or a client for whom the information is obtained. (h)  No   A  licensee shall  not  use a badge in connection with the official activities of the licensee's business. (i)  No   A    licensee shall  not  permit an employee or agent in his or her own name to advertise, engage clients, furnish reports, or present bills to clients, or in any manner whatever to conduct business for which a license is required under this chapter. (j) Pursuant to subdivisions (a) and (c) of Section 15006, the commissioner shall have the authority to enforce the provisions of this chapter and prosecute violations thereunder committed by unlicensed persons or entities that hold themselves out or act as public insurance adjusters. (k) For purposes of this section, "business day" shall have the same meaning given to that term in subdivision (e) of Section 1689.5 of the Civil Code, as in effect on the operative date of this statute. (l) The contract and the notice of cancellation set forth in paragraph (1) of subdivision (f) shall be written in the same language, e.g., Spanish, as principally used in the negotiation of the contract. (m) Within five business days after a contract has been canceled, the licensee shall tender to the client any payments made by the client and any note or other evidence of indebtedness, including an itemized statement of all amounts tendered to the client. (n) The licensee is not entitled to compensation for services performed prior to cancellation, other than for reimbursement of moneys paid by the licensee for out-of-pocket emergency expenses for the client or on behalf of the client. If the licensee seeks reimbursement from the client for out-of-pocket emergency expenses, and if the cancellation is made within the first  three business   seven calendar  days after the contract was initiated, the licensee shall provide the client with an itemized statement of those emergency expenses advanced to the client or on behalf of the client by the licensee. Nothing in this subdivision shall permit the licensee to recover any costs, except for out-of-pocket emergency expenses advanced to the client. Any security interest shall be canceled upon cancellation of the contract. (o) Notice of cancellation given by the client need not take the particular form specified in paragraph (1) of subdivision (f). Notice of cancellation, however expressed, is effective if it indicates the intention of the client not to be bound by the contract. (p) Cancellation occurs when the client gives written notice of cancellation by certified mail, return receipt requested, or other form of mailing  which   that  provides proof of mailing, to the licensee at the address specified in the contract. (q) Notice of cancellation, if given by mail, is effective when sent by certified mail, return receipt requested, or other form of mailing  which   that provides proof of mailing, properly addressed with postage prepaid. (r) Until the licensee has complied with this section, the client may cancel the contract. (s) The contracts shall be executed in duplicate. The licensee shall retain one original contract, and shall provide the insured with an original contract. (t) The licensee shall provide the client with an original contract and notice of cancellation at the time the client signs the contract. (u) Any confession of judgment or waiver of the provisions of this chapter shall be deemed contrary to public policy and shall be void and unenforceable. (v) Prior to the signing of the contract, the licensee shall provide the insured with a separate printed disclosure document in the following form that bears the name and license number of the licensee: "DISCLOSURE There are three types of insurance adjusters that could be involved in the processing of your insurance claim. The definitions of the three types are as follows: (1) Public adjusters means the insurance adjusters who do not work for your insurance company. They work for you, the insured, to assist in the preparation, presentation, and settlement of your claim. You hire them by signing a contract and agreeing to pay them a fee or commission based on a percentage of the settlement, or other method of compensation. Public adjusters are required to be licensed, bonded, and tested by the State of California to represent your interest only. (2) Company adjusters means the insurance adjusters who are employees of your insurance company. They represent your insurance company and are paid by your insurance company. They will not charge you a fee and are not individually licensed or tested by the State of California. (3) Independent adjusters means the insurance adjusters who are hired on a contract basis by your insurance company to represent the company in the settlement of the claim. They are paid by your insurance company. They will not charge you a fee. You have the right, but are not required, to use the services of a public adjuster in the preparation and handling of your insurance claim. Public adjusters cannot solicit your business while the loss is underway, or between the hours of 6 p.m. and 8 a.m. Your "Public Adjuster Contract," with a public adjuster representing you, should clearly indicate the amount of the fee you will be paying to your public adjuster. Your contract, with this fee percentage, should be acknowledged by your initials on the "Public Adjuster Contract." The salary, fee, commission, or other consideration is to be paid by you (the insured), not the insurance company (insurer). You have the right to cancel the contract with your public adjuster, without any penalty or obligation, within  three business   seven calendar  days from the date the contract is signed. If you cancel the contract with your public adjuster, any money or other consideration paid by you will be returned within five business days following the receipt of your cancellation notice, and any security interest arising out of the transaction will be canceled. To cancel the contract with your public adjuster, mail or deliver by certified mail, return receipt requested, or other form of mailing  which   that  provides proof of mailing, a signed and dated copy of the cancellation notice, or any other written notice, or send a telegram to the public adjuster at the address in the contract. You have the right to, and may, communicate with your insurance company at any time if you feel the need during the claims process. If you have any concerns or questions, the officers at the California Department of Insurance Consumer Hotline are there to help you. Please call them at 1-800-927-HELP (4357), or www.insurance.ca.gov." (w) No later than  three business   seven calendar  days after the cancellation has expired, the public adjuster shall notify the insurer, its adjuster, or its attorney, that he or she has entered into a written contract with the insured. (x) If the licensee misrepresents or conceals a material fact from the insured prior to execution of the contract, the insured is entitled to rescind the contract without time limit. SEC. 53. Section 15027.1 of the Insurance Code is amended to read: 15027.1. (a)  Notwithstanding  In addition to the restrictions in  subdivision (e) of Section 15027, a licensee shall not solicit a contract of engagement for residential properties under this chapter until seven calendar days have elapsed  after the occurrence of a disaster.   from the conclusion of a loss-producing occurrence as defined in subdivision (d) of Section 15027.  (b) Subdivision (a) shall not apply if the licensee is contacted directly by the insured or the insured's representative.  (c) For the purposes of this section, "disaster" means a loss-producing event that damages or destroys more than 25 dwellings, or a "disaster" as that term is defined in subdivision (b) of Section 1689.14 of the Civil Code.  SEC. 54. Section 15031 of the Insurance Code is amended to read: 15031. (a) A licensee shall not conduct a business under a fictitious or other business name unless and until he or she has obtained the written authorization of the commissioner to do so. (b) The commissioner shall not authorize the use of a fictitious or other business name that is so similar to that of a public officer or agency or that  is  used by another licensee that the public may be confused or misled thereby. (c) The authorization shall require, as a condition precedent to the use of a fictitious name, that the licensee comply with Section  1724.5 of this code and Chapter 5 (commencing with Section 17900) of Part 3 of Division 7 of the Business and Professions Code.   1724.5.  (d) A licensee desiring to conduct his or her business under more than one fictitious name shall obtain the authorization of the commissioner in a manner prescribed in this section for the use of additional fictitious names. (e) The licensee shall pay a fee of ten dollars ($10) for each authorization to use an additional fictitious name and for each change in the use of a fictitious business name. If the original license is issued in a nonfictitious name and authorization is requested to have the license reissued in a fictitious business name, the licensee shall pay a fee of ten dollars ($10) for that authorization. SEC. 55. Section 15036 of the Insurance Code is amended to read: 15036. In lieu of the surety bond required by this chapter there may be deposited with the State of California the sum of twenty thousand dollars ($20,000) in cash, or evidence of deposit of the sum of twenty thousand dollars ($20,000) in banks authorized to do business in this state and insured by the Federal Deposit Insurance Corporation, or investment certificates or share accounts in the amount of twenty thousand dollars ($20,000) issued by a savings association doing business in this state and insured by the Federal Deposit Insurance Corporation, or evidence of a certificate of funds or share account of the sum of twenty thousand dollars ($20,000) in a credit union as defined in Section  14000   14002  of the Financial Code whose share deposits are guaranteed by the National Credit Union Administration or guaranteed by any other agency approved by the Department of  Financial Institutions.  Business Oversight.  SEC. 56. Section 15053 of the Insurance Code is amended to read: 15053. Any person who knowingly falsifies the fingerprints or photographs submitted under subdivision (f) of Section 15010  or paragraph (12) of subdivision (b) of Section 15016  is guilty of a felony. Any person who violates any of the other provisions of this chapter is guilty of a misdemeanor punishable by fine not to exceed five hundred dollars ($500) or by imprisonment in the county jail not to exceed one year, or by both that fine and imprisonment. SEC. 57. Section 15056 of the Insurance Code is amended to read: 15056.  (a)    Except as otherwise provided in this article, an expired license or branch office certificate may be renewed at any time within one year after its expiration on the filing of an application for renewal on a form prescribed by the commissioner, and the payment of a renewal fee in effect on the  last preceding regular   actual  renewal date. If the license or certificate is renewed  more than 30 days  after its expiration, the licensee, as a condition precedent to renewal, shall also pay the delinquency fee prescribed by this chapter. Renewal under this section shall be effective on the date on which the application is filed, on the date on which the renewal fee is paid, or on the date on which the delinquency fee, if any, is paid, whichever  last  occurs  last  . If so renewed, the license or certificate shall continue in effect through the date provided in Section  15044 which   15054 that  next occurs after the effective date of the renewal, when it shall expire if it is not again renewed.  Renewal   (b)     Renewal  of a license or certificate  shall   does  not prohibit the bringing of disciplinary proceedings for an act committed before the effective date of the renewal. SEC. 58. Section 15060 of the Insurance Code is amended to read: 15060. The amount of fees prescribed by this chapter, unless otherwise fixed, is that fixed in the following schedule: (a) The application fee  for the qualifying examination  for an original license is twenty-five dollars ($25). (b) The application fee for an original branch office certificate is fifteen dollars ($15). (c) The fee for an original license  application  in the amount equal to the renewal fee in effect on the last regular renewal date before the date on which the license is issued, except that, if the license will expire less than one year after its issuance, then the fee is an amount equal to 50 percent of the renewal fee in effect on the last regular renewal date before the date on which the license is issued.  The commissioner may, by appropriate regulation, provide for the waiver or refund of the original licensee fee where the license is issued less than 45 days before the date on which it will expire.  (d) The renewal fee shall be fixed by the commissioner as follows:  (1) for a license as a public insurance adjuster, not more than one hundred dollars ($100) (2) for a branch office certificate, not more than twenty dollars ($20).   (1) For a license as a public insurance adjuster, not more than one hundred dollars ($100).   (2) For a branch office certificate, not more than twenty dollars ($20).  (e) The application and license fee for applications prescribed by the commissioner, in addition to those in this chapter, and the application and license fee for a change in the type of business organization of the licensee, shall be in the amount prescribed by rule and regulation of the commissioner. (f) The delinquency fee shall be 50 percent of the renewal fee in effect on the date of  expiration, but not more than twenty-five dollars ($25).   expiration.  (g) The fee for reexamination of an applicant is ten dollars ($10). SEC. 59. Section 15062 of the Insurance Code is amended to read: 15062. Application or license  fee   fees  shall not be refunded  except in accordance with Section 158 of the Business and Professions Code.   pursuant to Section 1751.5.  SEC. 60. No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.