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CA Department of Insurance

Exception to Name Approval

Exceptions to Insurance Producer Name Approval Requirements

Title 10, California Insurance Code of Regulations, Section 2052.4 (c) (1), (2), (3) and (4).

California Insurance Code Section 1724.5 and California Code of Regulations Sections 2050 - 2052.5 set forth the statutory and regulatory standards for naming criteria for insurance producers. For example, a name cannot be the same as the name of a well-known company, whether or not that well-known company is regulated by the Department, or imply affiliation with a federal, state, or local government authority or program. One objective of the name approval criteria is to ensure that consumers are not misled about the business entity. 

There are, however, certain exceptions to the name approval criteria specified in Section 2052.4(c)(2)(A) and (B), (3), and (4) of the California Code of Regulations, as set forth below:

(c)  The name fails to state or clearly indicate that the applicant or licensed producer is or will be an insurance producer and the name states or implies, or would lead reasonable persons to infer:

(1)  That the applicant or licensee is primarily engaged in some line of business other than the insurance business, and the applicant cannot qualify for any of the exceptions set forth in paragraphs (2), (3), and (4) of this subsection.

(2)  That the applicant or licensee has expertise in the area of investment, tax shelter, financial or estate planning or computer programming. An applicant may overcome this objection by showing that he qualifies under either of the two following exceptions:

(A)  An exception to this rule may be made on a case by case basis where the applicant or licensee holds a certificate as a broker/dealer under California Corporations Code Section 25210 and/or where the applicant holds a certificate as an investment adviser under the provisions of California Corporations Code Section 25230 and the applicant has submitted evidence satisfactory to the Commissioner that in excess of 80 percent of the applicant's net income from the said business entity for which name approval is being sought is derived from sources of business other than insurance. The foregoing exception is not available to an agent of a broker-dealer, as the word "agent" is defined in California Corporations Code Section 25003.

(B)  An exception to this rule may be made on a case by case basis where a licensee is seeking approval for the use as a corporate name, the same name, whether true or fictitious, in which he is licensed as an unincorporated producer, provided the said licensee is an officer owning 10 percent or more of the shares of the corporate applicant for license. The foregoing exception, however, shall not be available to an applicant or a licensee who purchases the unincorporated business or businesses of another licensed producer subsequent to the adoption of these regulations.

(3)  That the applicant or licensee is a regulated finance or mortgage company. An exception to this rule may be made where the applicant presents evidence satisfactory to the Commissioner that the applicant's principal business is that of a regulated finance or mortgage company and that 80 percent of the applicant's net income from said business entity is derived from sources of business other than insurance or where the applicant presents a verified statement to the effect that insurance coverage will be written only on those persons who are customers of the finance or mortgage company generally identified with the name for which approval is sought. This exception to the rule shall apply whether the applicant is a regulated finance or mortgage company or is held or controlled by a regulated finance or mortgage company.

(4)  That the applicant or licensee is engaged in retail sales. An exception to this rule may be made where the applicant presents evidence satisfactory to the Commissioner that the applicant's principal business is that of retail sales having nothing to do with insurance and that 80 percent of the applicant's net income from said business entity is derived from sources of business other than insurance or where the applicant presents a verified statement to the effect that insurance coverage will be written only on those persons who are customers of the retail business generally identified with the name for which approval is sought. This exception to the rule shall apply whether the applicant is the said retail business entity or is held or controlled by such business entity.

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If you have any questions about this form or the license information you retrieved, please see the most commonly asked questions in our License Questions and Answers section. If you need further assistance, please call our Business Entity Licensing Inquiry line at (916) 492-3069. You may also send an e-mail to the Producer Licensing Bureau. Please be sure to include your name, telephone number, license number and e-mail address in all correspondence with the CDI.

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