AB 1578: Insurance licensees.
- Session Year: 2023-2024
- House: Assembly
- Latest Version Date: 2023-09-30
Current Status:
Passed
(2023-09-30: Chaptered by Secretary of State - Chapter 280, Statutes of 2023.)
Introduced
In Committee
First Chamber
In Committee
Second Chamber
Enacted
What does this bill do?
The bill changes where an organization’s insurance license number must appear in emails, requiring the license number to be next to or on the line below the organization’s name only when the email is sent by the organization (not by an individual agent) and the message involves an activity that needs a license. It keeps the rule that individual licensees must show their license number next to or below their own name in such emails.
The summary is provided by generative AI which can make mistakes. For original language, please view the details in the table below.
Existing law generally regulates the business of insurance in the state, including the conduct of insurance licensees. Existing law requires a specified licensee to include their license number in an email that involves an activity for which a license is required. Existing law requires the license number of an organizational licensee in an email to be included adjacent to or on the line below the organizations name.
This bill, instead, would require the license number of an organizational licensee to appear adjacent to or on the line below the organizations name if the email is sent from the organization and not an individual licensee, and the communication involves an activity for which a license is required.
Existing law generally regulates the business of insurance in the state, including the conduct of insurance licensees. Existing law requires a specified licensee to include their license number in an email that involves an activity for which a license is required. Existing law requires the license number of an organizational licensee in an email to be included adjacent to or on the line below the organizations name.
This bill, instead, would require the license number of an organizational licensee to appear adjacent to or on the line below the organizations name if the email is sent from the organization and not an individual licensee, and the communication involves an activity for which a license is required.
Existing law generally regulates the business of insurance in the state, including the conduct of insurance licensees. Existing law requires a specified licensee to include their license number in an email that involves an activity for which a license is required. Existing law requires the license number of an organizational licensee in an email to be included adjacent to or on the line below the organizations name.
This bill would delete the requirement that the license number of an organizational licensee appear adjacent to or on the line below the organizations name. bill, instead, would require the license number of an organizational licensee to appear adjacent to or on the line below the organizations name if the email is sent from the organization and not an individual licensee, and the communication involves an activity for which a license is required.
Existing law generally regulates the business of insurance in the state, including the conduct of insurance licensees. Existing law requires a specified licensee to include their license number in an email that involves an activity for which a license is required. Existing law requires the license number of an organizational licensee in an email to be included adjacent to or on the line below the organizations name.
This bill would delete the requirement that the license number of an organizational licensee appear adjacent to or on the line below the organizations name.
(a)A person licensed under Section 1625, 1625.5, 1625.55, 1626, 1758.1, 1765, 1800, 14020, or 15006, or Chapter 8 (commencing with Section 1831), shall affix, type, or print on business cards, written price quotations for insurance products, and print advertisements distributed exclusively in this state for insurance products, its license number in a type size that is at least as large as any indicated telephone number, address, or fax number or in 12-point type, or in 8-point type for business cards, whichever is larger. If a licensee includes the names of multiple licensed organizations on a business card, written price quotation, or print advertisement distributed exclusively in this state, affixing, typing, or printing the license number of any one of the organizations complies with the requirements of this section.
(b)A person licensed under Section 1625, 1625.5, 1625.55, 1626, 1758.1, 1765, 14020, or 15006, or Chapter 8 (commencing with Section 1831), shall affix, type, or print on business cards, written price quotations for insurance products, and print advertisements distributed in this state for insurance products, the word Insurance in a type size that is at least as large as the smallest telephone number or in 12-point type, or in 8-point type for business cards, whichever is larger.
(c)A person licensed under Section 1625, 1625.5, 1625.55, 1626, 1758.1, 1765, 14020, or 15006, or Chapter 8 (commencing with Section 1831), shall include the persons license number in the emails the person sends that involve an activity for which a license is required. A persons license number shall be in a type size that is no smaller than the largest of any telephone number, street address, or email address of the person included in the email. The license number of an individual licensee shall appear adjacent to or on the line below the individuals name or title. The license number of an organizational licensee shall appear adjacent to or on the line below the organizations name if the email is sent from the organization and not an individual licensee, and the communication involves an activity for which a license is required.
(d)A natural person who is a solicitor, as defined in Section 1624, working exclusively as an employee of a motor club agent, or working exclusively for a property broker-agent or casualty broker-agent on behalf of a motor club, shall use the organizational licensee number of that persons employer.
(e)A person in violation of this section shall be subject to a fine levied by the commissioner in the amount of two hundred dollars ($200) for the first offense, five hundred dollars ($500) for the second offense, and one thousand dollars ($1,000) for the third and subsequent offenses. The penalty shall not exceed one thousand dollars ($1,000) for any one offense. These fines shall be deposited into the Insurance Fund.
(f)A separate penalty shall not be imposed upon each piece of printed material that fails to conform to the requirements of this section.
(g)If the commissioner finds that the failure of a licensee to comply with the provisions of subdivision (a) or (b) is due to reasonable cause or circumstance beyond the licensees control, and occurred notwithstanding the exercise of ordinary care and in the absence of willful neglect, the licensee may be relieved of the penalty in subdivision (e).
(h)A licensee seeking to be relieved of the penalty in subdivision (e) shall file with the department a statement with supporting documents setting forth the facts upon which the licensee bases its claims for relief.
(i)This section does not apply to a person or entity that is not currently required to be licensed by the department or that is exempted from licensure.
(j)This section does not apply to general advertisements of motor clubs that merely list insurance products as one of several services offered by the motor club, and do not provide any details of the insurance products.
(k)This section does not apply to life insurance policy illustrations required by Chapter 5.5 (commencing with Section 10509.950) of Part 2 of Division 2 or to life insurance cost indexes required by Chapter 5.6 (commencing with Section 10509.970) of Part 2 of Division 2.
(a)A person licensed under Section 1625, 1625.5, 1625.55, 1626, 1758.1, 1765, 1800, 14020, or 15006, or Chapter 8 (commencing with Section 1831), shall affix, type, or print on business cards, written price quotations for insurance products, and print advertisements distributed exclusively in this state for insurance products, its license number in a type size that is at least as large as any indicated telephone number, address, or fax number or in 12-point type, or in 8-point type for business cards, whichever is larger. If a licensee includes the names of multiple licensed organizations on a business card, written price quotation, or print advertisement distributed exclusively in this state, affixing, typing, or printing the license number of any one of the organizations complies with the requirements of this section.
(b)A person licensed under Section 1625, 1625.5, 1625.55, 1626, 1758.1, 1765, 14020, or 15006, or Chapter 8 (commencing with Section 1831), shall affix, type, or print on business cards, written price quotations for insurance products, and print advertisements distributed in this state for insurance products, the word Insurance in a type size that is at least as large as the smallest telephone number or in 12-point type, or in 8-point type for business cards, whichever is larger.
(c)A person licensed under Section 1625, 1625.5, 1625.55, 1626, 1758.1, 1765, 14020, or 15006, or Chapter 8 (commencing with Section 1831), shall include the persons license number in the emails the person sends that involve an activity for which a license is required. A persons license number shall be in a type size that is no smaller than the largest of any telephone number, street address, or email address of the person included in the email. The license number of an individual licensee shall appear adjacent to or on the line below the individuals name or title. The license number of an organizational licensee shall appear adjacent to or on the line below the organizations name if the email is sent from the organization and not an individual licensee, and the communication involves an activity for which a license is required.
(d)A natural person who is a solicitor, as defined in Section 1624, working exclusively as an employee of a motor club agent, or working exclusively for a property broker-agent or casualty broker-agent on behalf of a motor club, shall use the organizational licensee number of that persons employer.
(e)A person in violation of this section shall be subject to a fine levied by the commissioner in the amount of two hundred dollars ($200) for the first offense, five hundred dollars ($500) for the second offense, and one thousand dollars ($1,000) for the third and subsequent offenses. The penalty shall not exceed one thousand dollars ($1,000) for any one offense. These fines shall be deposited into the Insurance Fund.
(f)A separate penalty shall not be imposed upon each piece of printed material that fails to conform to the requirements of this section.
(g)If the commissioner finds that the failure of a licensee to comply with the provisions of subdivision (a) or (b) is due to reasonable cause or circumstance beyond the licensees control, and occurred notwithstanding the exercise of ordinary care and in the absence of willful neglect, the licensee may be relieved of the penalty in subdivision (e).
(h)A licensee seeking to be relieved of the penalty in subdivision (e) shall file with the department a statement with supporting documents setting forth the facts upon which the licensee bases its claims for relief.
(i)This section does not apply to a person or entity that is not currently required to be licensed by the department or that is exempted from licensure.
(j)This section does not apply to general advertisements of motor clubs that merely list insurance products as one of several services offered by the motor club, and do not provide any details of the insurance products.
(k)This section does not apply to life insurance policy illustrations required by Chapter 5.5 (commencing with Section 10509.950) of Part 2 of Division 2 or to life insurance cost indexes required by Chapter 5.6 (commencing with Section 10509.970) of Part 2 of Division 2.
(a)A person licensed under Section 1625, 1625.5, 1625.55, 1626, 1758.1, 1765, 1800, 14020, or 15006, or Chapter 8 (commencing with Section 1831), shall affix, type, or print on business cards, written price quotations for insurance products, and print advertisements distributed exclusively in this state for insurance products, its license number in a type size that is at least as large as any indicated telephone number, address, or fax number or in 12-point type, or in 8-point type for business cards, whichever is larger. If a licensee includes the names of multiple licensed organizations on a business card, written price quotation, or print advertisement distributed exclusively in this state, affixing, typing, or printing the license number of any one of the organizations complies with the requirements of this section.
(b)A person licensed under Section 1625, 1625.5, 1625.55, 1626, 1758.1, 1765, 14020, or 15006, or Chapter 8 (commencing with Section 1831), shall affix, type, or print on business cards, written price quotations for insurance products, and print advertisements distributed in this state for insurance products, the word Insurance in a type size that is at least as large as the smallest telephone number or in 12-point type, or in 8-point type for business cards, whichever is larger.
(c)A person licensed under Section 1625, 1625.5, 1625.55, 1626, 1758.1, 1765, 14020, or 15006, or Chapter 8 (commencing with Section 1831), shall include the persons license number in the emails the person sends that involve an activity for which a license is required. A persons license number shall be in a type size that is no smaller than the largest of any telephone number, street address, or email address of the person included in the email. The license number of an individual licensee shall appear adjacent to or on the line below the individuals name or title. The license number of an organizational licensee shall appear adjacent to or on the line below the organizations name if the email is sent from the organization and not an individual licensee, and the communication involves an activity for which a license is required.
(d)A natural person who is a solicitor, as defined in Section 1624, working exclusively as an employee of a motor club agent, or working exclusively for a property broker-agent or casualty broker-agent on behalf of a motor club, shall use the organizational licensee number of that persons employer.
(e)A person in violation of this section shall be subject to a fine levied by the commissioner in the amount of two hundred dollars ($200) for the first offense, five hundred dollars ($500) for the second offense, and one thousand dollars ($1,000) for the third and subsequent offenses. The penalty shall not exceed one thousand dollars ($1,000) for any one offense. These fines shall be deposited into the Insurance Fund.
(f)A separate penalty shall not be imposed upon each piece of printed material that fails to conform to the requirements of this section.
(g)If the commissioner finds that the failure of a licensee to comply with the provisions of subdivision (a) or (b) is due to reasonable cause or circumstance beyond the licensees control, and occurred notwithstanding the exercise of ordinary care and in the absence of willful neglect, the licensee may be relieved of the penalty in subdivision (e).
(h)A licensee seeking to be relieved of the penalty in subdivision (e) shall file with the department a statement with supporting documents setting forth the facts upon which the licensee bases its claims for relief.
(i)This section does not apply to a person or entity that is not currently required to be licensed by the department or that is exempted from licensure.
(j)This section does not apply to general advertisements of motor clubs that merely list insurance products as one of several services offered by the motor club, and do not provide any details of the insurance products.
(k)This section does not apply to life insurance policy illustrations required by Chapter 5.5 (commencing with Section 10509.950) of Part 2 of Division 2 or to life insurance cost indexes required by Chapter 5.6 (commencing with Section 10509.970) of Part 2 of Division 2.
(a)A person licensed under Section 1625, 1625.5, 1625.55, 1626, 1758.1, 1765, 1800, 14020, or 15006, or Chapter 8 (commencing with Section 1831), shall affix, type, or print on business cards, written price quotations for insurance products, and print advertisements distributed exclusively in this state for insurance products, its license number in a type size that is at least as large as any indicated telephone number, address, or fax number or in 12-point type, or in 8-point type for business cards, whichever is larger. If a licensee includes the names of multiple licensed organizations on a business card, written price quotation, or print advertisement distributed exclusively in this state, affixing, typing, or printing the license number of any one of the organizations complies with the requirements of this section.
(b)A person licensed under Section 1625, 1625.5, 1625.55, 1626, 1758.1, 1765, 14020, or 15006, or Chapter 8 (commencing with Section 1831), shall affix, type, or print on business cards, written price quotations for insurance products, and print advertisements distributed in this state for insurance products, the word Insurance in a type size that is at least as large as the smallest telephone number or in 12-point type, or in 8-point type for business cards, whichever is larger.
(c)A person licensed under Section 1625, 1625.5, 1625.55, 1626, 1758.1, 1765, 14020, or 15006, or Chapter 8 (commencing with Section 1831), shall include the persons license number in the emails the person sends that involve an activity for which a license is required. A persons license number shall be in a type size that is no smaller than the largest of any telephone number, street address, or email address of the person included in the email. The license number of an individual licensee shall appear adjacent to or on the line below the individuals name or title. The license number of an organizational licensee shall appear adjacent to or on the line below the organizations name.
(d)A natural person who is a solicitor, as defined in Section 1624, working exclusively as an employee of a motor club agent, or working exclusively for a property broker-agent or casualty broker-agent on behalf of a motor club, shall use the organizational licensee number of that persons employer.
(e)A person in violation of this section shall be subject to a fine levied by the commissioner in the amount of two hundred dollars ($200) for the first offense, five hundred dollars ($500) for the second offense, and one thousand dollars ($1,000) for the third and subsequent offenses. The penalty shall not exceed one thousand dollars ($1,000) for any one offense. These fines shall be deposited into the Insurance Fund.
(f)A separate penalty shall not be imposed upon each piece of printed material that fails to conform to the requirements of this section.
(g)If the commissioner finds that the failure of a licensee to comply with the provisions of subdivision (a) or (b) is due to reasonable cause or circumstance beyond the licensees control, and occurred notwithstanding the exercise of ordinary care and in the absence of willful neglect, the licensee may be relieved of the penalty in subdivision (e).
(h)A licensee seeking to be relieved of the penalty in subdivision (e) shall file with the department a statement with supporting documents setting forth the facts upon which the licensee bases its claims for relief.
(i)This section does not apply to a person or entity that is not currently required to be licensed by the department or that is exempted from licensure.
(j)This section does not apply to general advertisements of motor clubs that merely list insurance products as one of several services offered by the motor club, and do not provide any details of the insurance products.
(k)This section does not apply to life insurance policy illustrations required by Chapter 5.5 (commencing with Section 10509.950) of Part 2 of Division 2 or to life insurance cost indexes required by Chapter 5.6 (commencing with Section 10509.970) of Part 2 of Division 2.
|
Date
|
Status
|
|---|---|
| Sep 30, 2023 | Chaptered by Secretary of State - Chapter 280, Statutes of 2023. |
| Sep 30, 2023 | Approved by the Governor. |
| Sep 13, 2023 | Enrolled and presented to the Governor at 3 p.m. |
| Sep 6, 2023 | In Assembly. Ordered to Engrossing and Enrolling. |
| Sep 6, 2023 | Read third time. Passed. Ordered to the Assembly. (Ayes 40. Noes 0. Page 2395.). |
| Aug 15, 2023 | Read second time. Ordered to third reading. |
| Aug 14, 2023 | From committee: Be ordered to second reading pursuant to Senate Rule 28.8. |
| Jun 29, 2023 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 7. Noes 0.) (June 28). Re-referred to Com. on APPR. |
| May 31, 2023 | Referred to Com. on INS. |
| May 18, 2023 | In Senate. Read first time. To Com. on RLS. for assignment. |
| May 18, 2023 | Read third time. Passed. Ordered to the Senate. (Ayes 74. Noes 0. Page 1597.) |
| May 11, 2023 | Read second time. Ordered to Consent Calendar. |
| May 10, 2023 | From committee: Do pass. To Consent Calendar. (Ayes 14. Noes 0.) (May 10). |
| Apr 26, 2023 | From committee: Do pass and re-refer to Com. on APPR. with recommendation: To Consent Calendar. (Ayes 14. Noes 0.) (April 26). Re-referred to Com. on APPR. |
| Apr 19, 2023 | Re-referred to Com. on INS. |
| Apr 18, 2023 | From committee chair, with author's amendments: Amend, and re-refer to Com. on INS. Read second time and amended. |
| Mar 9, 2023 | Referred to Com. on INS. |
| Feb 18, 2023 | From printer. May be heard in committee March 20. |
| Feb 17, 2023 | Read first time. To print. |
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Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Sep 6, 2023 | Assembly 3rd Reading AB1578 Valencia By Rubio | Senate Floor |
Passed |
|
| Jun 28, 2023 | Do pass, but first be re-referred to the Committee on [Appropriations] | Senate Standing Committee on Insurance |
Passed |
|
| May 18, 2023 | AB 1578 Valencia Consent Calendar Second Day Regular Session | Assembly Floor |
Passed |
|
| May 10, 2023 | Do pass. To Consent Calendar. | Assembly Standing Committee on Appropriations |
Passed |
|
| Apr 26, 2023 | Do pass and be re-referred to the Committee on [Appropriations] with recommendation: To Consent Calendar | Assembly Standing Committee on Insurance |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| American Council Of Life Insurers | ** Support | |
| American Property Casualty Insurance Association | ** Support | |
| Anaheim Chamber Of Commerce | ** Support | |
| Association Of California Life And Health Insurance Companies | ** Support | |
| Independent Insurance Agents & Brokers of California | ** Support | |
| National Association Of Insurance And Financial Advisors | ** Support | |
| National Association of Mutual Insurance Companies | ** Support | |
| Personal Insurance Federation Of California | ** Support |
SENATE RULES COMMITTEE Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | AB 1578 |
THIRD READING
Bill No: AB 1578
Author: Valencia (D)
Amended: 4/18/23 in Assembly
Vote: 21
SENATE INSURANCE COMMITTEE: 7-0, 6/28/23
AYES: Rubio, Nguyen, Ashby, Jones, McGuire, Niello, Portantino
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 74-0, 5/18/23 (Consent) - See last page for vote
SUBJECT: Insurance licensees
SOURCE: Independent Insurance Agents & Brokers of California
National Association of Insurance and Financial Advisors
DIGEST:
This bill clarifies a provision enacted last year that the license number of an organizational licensee must appear adjacent to or below the organization’s name in an email only if the email is sent from the organization and not an individual licensee.
ANALYSIS:
Existing law:
- Requires specified insurance licensees to print their license number on any business card, written price quotation for insurance products, or print advertisements in the same type and size as any telephone number, address or fax number.
- Specifies that if the licensee maintains more than one organization license, one of the organization license numbers is sufficient for compliance with this requirement.
- Requires specified insurance licensees to include their license number in an email that involves an activity for which a license is required.
- Requires the license number of an organizational licensee in an email to be included adjacent to or on the line below the organization’s name.
This bill clarifies that the license number of an organizational insurance licensee must appear adjacent to or below the organization’s name only if the email is sent from the organization and not an individual licensee, and the communication involves an activity for which a license is required.
Background
Last year, the annual insurance committee omnibus bill added a requirement that the numbers of both individual licensee and organizational licensee must appear next to their names in emails sent involving activities for which an insurance license is required. This requirement applies to the following licensees: property broker-agents, casualty broker-agents, life agents, variable life and variable annuity agents, accident and health or sickness agents, personal lines agents, limited lines automobile insurance agents, surplus lines brokers, independent insurance adjusters, public insurance adjusters, and life and disability insurance analysts. The change implemented in the omnibus bill was intended to modernize the outdated code section established in 1995, which didn’t take email communications into consideration.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No
SUPPORT: (Verified 8/14/23)
Independent Insurance Agents & Brokers of California (co-source)
National Association of Insurance and Financial Advisors (co-source)
American Council of Life Insurers
American Property Casualty Insurance Association
Anaheim Chamber of Commerce
Association of California Life and Health Insurance Companies
National Association of Mutual Insurance Companies
Personal Insurance Federation of California
OPPOSITION: (Verified 8/14/23)
None received
ARGUMENTS IN SUPPORT: According to the author, AB 1578 clarifies the language to require a licensee to include their individual license number on emails sent by them individually and to require agency license numbers to be included on emails that are sent by the insurance agency. It is duplicative to include both license numbers since the agency number will simply result in the consumer needing to click on the individual’s license number to see if the licensee is in good standing.
According to the National Association of Insurance and Financial Advisors and the Independent Insurance Agents & Brokers of California, while they supported last year’s bill that established this requirement for email communications, the California Department of Insurance has subsequently issued guidance to licensees that they must include both their individual agent license number and agency license number if the agency name is also included in the email. This interpretation differs from and is inconsistent with the longstanding requirement for license numbers in printed correspondence.
ASSEMBLY FLOOR: 74-0, 5/18/23
AYES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Megan Dahle, Davies, Dixon, Essayli, Flora, Mike Fong, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Holden, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, Mathis, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Wallis, Ward, Weber, Wicks, Wood, Zbur, Rendon
NO VOTE RECORDED: Cervantes, Vince Fong, Friedman, Villapudua, Waldron, Wilson
Prepared by: Erin Ryan / INS. / (916) 651-4110
8/16/23 10:25:00
**** END ****
SENATE COMMITTEE ON INSURANCE
Senator Susan Rubio, Chair
2023 - 2024 Regular
Bill No: AB 1578 Hearing Date: June 28, 2023
Author: | Valencia | ||
Version: | April 18, 2023 | ||
Urgency: | No | Fiscal: | Yes |
Consultant: | Erin Ryan | ||
SUBJECT: Insurance licensees
DIGEST:
Would clarify a provision enacted last year that the license number of an organizational licensee must appear adjacent to or below the organization’s name in an email only if the email is sent from the organization and not an individual licensee.
ANALYSIS:
Existing law:
- Requires specified insurance licensees to print their license number on any business card, written price quotation for insurance products, or print advertisements in the same type and size as any telephone number, address or fax number.
- Specifies that if the licensee maintains more than one organization license, one of the organization license numbers is sufficient for compliance with this requirement.
- Requires specified insurance licensees to include their license number in an email that involves an activity for which a license is required.
- Requires the license number of an organizational licensee in an email to be included adjacent to or on the line below the organization’s name.
This bill:
- Would specify that the license number of an organizational licensee must appear adjacent to or below the organization’s name only if the email is sent from the organization and not an individual licensee, and the communication involves an activity for which a license is required.
Background
Last year, the annual insurance committee omnibus bill added a requirement that the numbers of both individual licensee and organizational licensee must appear next to their names in emails sent involving activities for which an insurance license is required. This requirement applies to the following licensees: property broker-agents, casualty broker-agents, life agents, variable life and variable annuity agents, accident and health or sickness agents, personal lines agents, limited lines automobile insurance agents, surplus lines brokers, independent insurance adjusters, public insurance adjusters, and life and disability insurance analysts. The change implemented in the omnibus bill was intended to modernize the outdated code section established in 1995, which didn’t take email communications into consideration.
Related/Prior Legislation
SB 1242 (Senate Insurance Committee, Chap. 424, Statutes of 2022) included the language at issue in this bill requiring insurance licensees to include their license numbers in emails the licensees send if the email involves an activity for which a license is required.
ARGUMENTS IN SUPPORT:
According to the author, AB 1578 would clarify the language to require a licensee to include their individual license number on emails sent by them individually and to require agency license numbers to be included on emails that are sent by the insurance agency. It is duplicative to include both license numbers since the agency number will simply result in the consumer needing to click on the individual’s license number to see if the licensee is in good standing.
According to the National Association of Insurance and Financial Advisors and the Independent Insurance Agents and Brokers of California, while they supported last year’s bill that established this requirement for email communications, the California Department of Insurance has subsequently issued guidance to licensees that they must include both their individual agent license number and agency license number if the agency name is also included in the email. This interpretation differs from and is inconsistent with the longstanding requirement for license numbers in printed correspondence.
ARGUMENTS IN OPPOSITION:
None received
SUPPORT:
American Council of Life Insurers
American Property Casualty Insurance Association
Anaheim Chamber of Commerce
Association of California Life and Health Insurance Companies
Independent Insurance Agents & Brokers of California (sponsor)
National Association of Insurance and Financial Advisors (sponsor)
National Association of Mutual Insurance Companies
Personal Insurance Federation of California
OPPOSITION:
None received
-- END --
Date of Hearing: May 10, 2023
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Chris Holden, Chair
ABPCA Bill Id:AB 1578
Author:(Valencia) – As Amended Ver:April 18, 2023
Policy Committee: | Insurance | Vote: | 14 - 0 |
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| ||
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Urgency: No State Mandated Local Program: No Reimbursable: No
SUMMARY:
This bill provides that the existing requirement for the insurance license number of an organizational licensee to appear adjacent to or on the line below the organization’s name applies only if the email is sent from the organization and not an individual licensee.
FISCAL EFFECT:
No cost to the Department of Insurance.
COMMENTS:
- Purpose. The author notes existing law requiring licensed insurance agents, brokers, and adjusters to print their license numbers on specified correspondence was recently updated to include email correspondence. However, the author states an “ambiguity in the language has led to a confusing interpretation” that an individual licensee must include both their individual license number and the license number of the individual’s insurance agency on the email. According to the author, “It is duplicative to include both license numbers since the agency number will simply result in the consumer needing to click on the individual’s license number to see if the licensee is in good standing.”
This bill clarifies that individual licensees must include their individual license number on emails sent by the licensee individually, and that an agency’s license number must only be included on emails sent by an insurance agency and when the communication involves an activity for which a license is required. This bill is supported by various insurer organizations.
- Prior Legislation. SB 1242 (Committee on Insurance), Chapter 424, Statutes of 2022, made several technical changes to the Insurance Code, including the requirement that the numbers of both the individual licensee and organizational licensee appear next to their respective names in email correspondence involving activities for which an insurance license is required.
Analysis Prepared by: Irene Ho / APPR. / (916) 319-2081
Date of Hearing: April 26, 2023
ASSEMBLY COMMITTEE ON INSURANCE
Lisa Calderon, Chair
ABPCA Bill Id:AB 1578 (
Author:Valencia) – As Amended Ver:April 18, 2023
SUBJECT: Insurance licensees
SUMMARY: Clarifies that the license number of an organizational licensee to appear adjacent to or on the line below the organization’s name if the email is sent from the organization and not an individual licensee, and the communication involves an activity for which a license is required.
EXISTING LAW requires a licensee to include the person’s license number in the emails the person sends that involve an activity for which a license is required. Specifies the license number of an individual licensee shall appear adjacent to or on the line below the individual’s name or title. Additionally, requires the license number of an organizational licensee to appear adjacent to or on the line below the organization’s name. (Insurance Code, Section 1725.5)
FISCAL EFFECT: Unknown
COMMENTS:
Purpose: According to the author,
California law requires various types of agents, brokers and adjusters (licensees) to print their license numbers on specified print correspondence distributed exclusively in California for insurance products. This law protects consumers by making it easier for the California Department of Insurance (CDI) to identify licensees who are doing business without a license, in violation of the Insurance Code.
Recently this law was updated to include email correspondence; however ambiguity in the language has led to a confusing interpretation.
AB 1578 would clarify the language to require a licensee to include their individual license number on emails sent by them individually and to require agency license numbers to be included on emails that are sent by the insurance agency. It is duplicative to include both license numbers since the agency number will simply result in the consumer needing to click on the individual’s license number to see if the licensee is in good standing.
Background: Last year, the annual insurance committee omnibus bill added a requirement that the numbers of both the individual licensee and the organizational licensee must appear next to their names in emails sent involving activities for which an insurance license is required. This requirement applies to the following licensees: property broker-agents, casualty broker-agents, life agents, variable life and variable annuity, accident and health or sickness agents, personal lines agents, limited lines automobile insurance agents, surplus lines brokers, independent insurance adjusters, public insurance adjusters, and life and disability insurance analysts. The change implemented in the omnibus bill was necessary to modernize the outdated code section established in 1995, which back then, didn’t take email communications into consideration. AB 1578 eliminates confusion for consumers by making clear that individual licensees must include their individual license number on emails sent by them individually and for agency license numbers to be included on emails that are sent by insurance agencies.
Previous legislation: SB 1242 (Sen. Insurance Committee) Chapter 424, Statutes of 2022: This measure made several changes that were non-controversial, technical, or otherwise classified as code cleanup. More specifically, as it relates to this bill, the measure required insurance licensees to print their license numbers on e-mails the licensees send, which involve an activity for which a license is required.
REGISTERED SUPPORT / OPPOSITION:
Support
American Council of Life Insurers
American Property Casualty Insurance Association
Anaheim Chamber of Commerce
Association of California Life & Health Insurance Companies
Independent Insurance Agents & Brokers of California, INC.
National Association of Insurance and Financial Advisors - California
National Association of Mutual Insurance Companies
Personal Insurance Federation of California
Opposition
None on file.
Analysis Prepared by: Kathleen O'Malley / INS. / (916) 319-2086
Discussed in Hearing
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Bill Author
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