The California Department of Insurance (DOI or CDI) regulates California insurance brokers, insurance adjusters, bail bondsmen, annuity salespeople and others. The California Department of Insurance License Background Bureau processes applications for insurance brokers, agents, adjusters, and bondsmen. The Producer Background Licensing Section investigates and evaluates adverse actions, such as convictions, in applicant’s backgrounds. The Department of Insurance issues the following main types of licenses:
- accident and health agents
- independent adjusters
- public insurance adjusters
- bail agents
- life agents
- life settlement brokers
- personal lines broker-agents
- property and casualty broker-agents
- surplus lines brokers
The Department of Insurance investigates misconduct through three divisions of its Enforcement Branch: its Investigative Division, which has over 90 investigative staff assigned to seven regional offices; the Fraud Division, which has over 275 staff based in nine regional offices; and the Special Investigative Unit Compliance Program, or SIU, which works Special Investigative Units of insurance companies to address reported allegations of insurance fraud.
DOI investigative and fraud units work with the DOI Legal Department and district attorneys offices to pursue civil, administrative and criminal cases arising from investigations. Civil cases can involve injunctions to close businesses, and seeking restitution, fines and penalties. The Department of Insurance uses administrative cases to seek punishment against brokers, agents and others through license restriction, license suspension, license revocation, cease and desist orders and bar orders under Insurance Code section 1748.5. Criminal cases involve misdemeanor and felony prosecutions sought by each county’s district attorney.
At Ray & Bishop, PLC, we defend Department of Insurance brokers and agents, including any individual or business licensee, in administrative proceedings. Administrative actions include:
- summary order of revocation
- summary order of denial
- 1033 consent application appeals
- order of immediate suspension pursuant to section 1748.5
- order to cease and desist
- statement of issues
- special notice of defense
California Department of Insurance licensing is unique in a number of ways. First, the elected state official, the Insurance Commissioner, heads the Department of Insurance, unlike most state licensing boards, bureaus or agencies which have an appointed governing body. The accountability of the agency head to the voters makes DOI very responsive to consumer complaints and susceptible to political and public pressure. Second, the Department of Insurance has extremely broad discretion to discipline its licensees. Insurance Code section 1668 (which applies to license applications), which is also applied to existing licensees under Insurance Code section 1738, permits the Department to revoke, suspend, restrict or deny a license based upon vague grounds such as a license being “against the public interest” or if the applicant or licensee is “not of good business reputation” or “lacking in integrity”. Third, in certain cases, particularly involving felony convictions or a history of prior license revocation or denial, the Department can discipline or deny a license without a hearing (although there are other remedies for this situation). Fourth, DOI investigations may work extensively with industry (insurance companies) and the criminal justice system to enforce the insurance laws.
Ray & Bishop, PLC, offers defense unique solutions to insurance license applicants and license holders. Our extensive experience with very serious disciplinary matters, with an emphasis on solutions for DOI-specific administrative processes such as summary denials, summary license revocations, 1033 consent appeals and 1748.5 bar order appeals, makes us uniquely experienced and qualified for these very serious matters. We have extensive experience with insurance-carrier initiated broker complaints, insurance carrier internal broker appeals, and multi-agency broker investigations. Our portfolio of successful disciplinary outcomes include saving licenses or achieving licenses after felony convictions, successful appeals by writ of administrative mandamus, and resolution of seven-figure monetary fine and recovery actions for a fraction of the money sought by DOI.
We believe that Ray & Bishop, PLC, stands alone as the experienced and authoritative law firm defending brokers, brokerages, agents and entities in the commercial and retail insurance industry in California.