California Insurance Code 1776 – Any surplus line broker who willfully fails or refuses to report to …
Any surplus line broker who willfully fails or refuses to report to the commissioner any insurance on subject matter located within this state placed under his or her name with nonadmitted insurers, or who, by willful omission from the records required to be maintained by him or her for that purpose, attempts to evade the payment of taxes on any such insurance, is, in addition to being required to pay the tax, together with a penalty equal in amount to the tax, guilty of a misdemeanor.
It is a misdemeanor for any surplus line broker or special lines’ surplus line broker to accept or pay directly or indirectly any consideration or remuneration for or in connection with the placing of insurance that, if done by a person within this state, is governed by the provisions of this chapter, when the placing was not done by a person licensed therefor pursuant to this chapter.
Terms Used In California Insurance Code 1776
- Commissioner: means the Insurance Commissioner of this State. See California Insurance Code 20
- Insurance agent: means a person authorized, by and on behalf of an insurer, to transact all classes of insurance other than life, disability, or health insurance, on behalf of an admitted insurance company. See California Insurance Code 31
- Insurance broker: means a person who, for compensation and on behalf of another person, transacts insurance other than life, disability, or health with, but not on behalf of, an insurer. See California Insurance Code 33
- licensee: means an insurer, agent, broker, or any other person who is required to be licensed by the department. See California Insurance Code 38.6
- Person: means any person, association, organization, partnership, business trust, limited liability company, or corporation. See California Insurance Code 19
- State: means the State of California, unless applied to the different parts of the United States. See California Insurance Code 28
- Surplus line broker: means a person licensed under Section 1765 and authorized to do business under Chapter 6 (commencing with Section 1760) of Part 2 of Division 1. See California Insurance Code 47
It is a misdemeanor for any agent or broker to solicit, negotiate, or effect any insurance governed by the provisions of this chapter in nonadmitted insurers, except by and through a surplus line broker or special lines’ surplus line broker licensed pursuant to this chapter. Except in the case of insurance specified in subdivision (b) of Section 1760.5, it is a misdemeanor for any surplus line broker or special lines’ surplus line broker to accept, place, pay, or permit the payment of commission or other remuneration on insurance placed by him or her under authority of his or her license to any person other than one holding a license to act as an insurance agent, insurance broker, surplus line broker, or special lines’ surplus line broker, except that the business may be accepted by such surplus line broker or special lines’ surplus line broker directly from an insured or other person who would likewise be entitled to place the business directly with an admitted insurer without the solicitation, negotiation, or effecting thereof by an insurance agent or broker.
The commissioner may deny, suspend, or revoke any license issued pursuant to this code if he or she finds after notice and hearing in accordance with the procedure provided in Article 13 (commencing with Section 1737) of Chapter 5 that the licensee has violated any provisions of this section.
The permission granted in this chapter to place any insurance in a nonadmitted insurer shall not be deemed or construed to authorize any insurer to do business in this state.
Placement activities of a licensed surplus line broker in accordance with this chapter, including, but not limited to, policy issuance, shall not be deemed or construed to be business done by the insurer in this state.
(Amended by Stats. 2004, Ch. 183, Sec. 240. Effective January 1, 2005.)