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CA Department of Insurance

Types of Violations

The Investigation Division investigates the following violations:
  • Premium Theft - The theft of insurance premiums is the most prevalent type of misconduct in the insurer producer area. Instances ranging from single theft to multi-million dollar scams victimize the insurance industry and competitive businesses.
  • Senior Citizen Abuse - Certain segments of the insurance industry target their marketing efforts toward senior citizens.  Some agents and insurers abuse elderly customers by churning and twisting existing policies or by selling them new, unsuitable insurance products.  At times, the misconduct is criminal, involving theft, false documents, Ponzi schemes and confidence games.
  • Health Insurance Violations - This type of fraud encompasses the deceptive sale of long term care products; Medicare supplements, Medicare Advantage Plans - Part C, Medicare Prescription Drug Plans - Part D; medical discount card scams and "mini-med" plans; as well as other health insurance schemes and violations of the Affordable Care Act/Covered California program perpetrated by licensees.
  • Deceptive Sales and Marketing Practices - The failure of some insurers to properly monitor and control their sales force can lead to unethical and misleading marketing practices such as bait and switch schemes, misrepresentation and the use of misleading titles and designations.
  • Unauthorized Insurance Companies - This type of fraud includes everything from phony insurance cards sold in DMV parking lots to fully-operational offshore insurance companies issuing policies they have no intention of honoring.
  • Public Adjuster Misconduct - Public adjusters represent insurance claimants in the settlement of claims with their insurance companies.  Misconduct in this area includes high-pressure sales, overcharging, conflicts of interest with vendors, and failure to account for claims proceeds.
  • Title Company Rebates and Kick-Backs - Kick-backs and commercial bribery are among the anti-competitive practices used to gain business from realtors.
  • Bail Agent Activity - A bail agent is a person permitted to solicit, negotiate, and transact undertakings of bail on behalf of a surety insurer.  Some unscrupulous bail agents fail to return collateral, aid and abet unlicensed bail agents or apprehend arrestees with the intent to extort premium payments.
In addition to these types of violations, the Division investigates other complaints and alleged violations of laws relating to the transaction of insurance by individuals and entities conducting business within the State as provided in the California Insurance Code, California Business and Professions Code, California Code of Regulations, California Penal Code, and Title 18 of the United States Code.
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