Insurance Commissioner Dave Jones Applauds Governor for Signing Insurance Streamlining Bill
News: 2011 Press Release
Insurance Commissioner Dave Jones today announced that Governor Jerry Brown signed AB 1416, which makes several changes to various Insurance Code sections regarding agent licensing and training, administrative processes relating to insurance companies, and previously enacted legislation. The measure, which received unanimous, bipartisan support, was sponsored by Insurance Commissioner Dave Jones and authored by the Assembly Committee on Insurance.
Of particular note, AB 1416 permits the Insurance Commissioner to remove a life agent's authority to transact variable life insurance contracts upon learning that the agent is no longer registered to transact securities with the U.S. Securities and Exchange Commission or the Financial Industry Regulatory Authority. The current process is time consuming, leaving the door open for a life agent to continue selling these insurance products when they are no longer authorized to do so.
"I am very pleased to have this new authority," said Commissioner Jones. "Timelier removal of a life agent's variable contract authority helps me to better protect consumers from agents who are not authorized to sell annuities or the other complex variable life contract products. In light of the enactment of AB 689 - the landmark annuity suitability bill that I sponsored - this particular measure is especially important."
Additionally, AB 1416 revises several insurer-related filing requirements which will enhance the Department's operational efficiencies and enable Department staff to focus on critical issues relating to consumer protection and maintaining a vibrant and solvent California insurance market.
AB 1416 also makes several changes in law relating to insurance producer licenses, including clarifying the bond requirement for an agent or broker who holds both property and casualty licenses. Legislation enacted last year that created the two license types was unclear on the bonding requirements and, as written, the law could be interpreted that a separate bond was required for each license. AB 1416 clarifies that only one bond is required.
AB 1416 goes into effect January 1, 2012.
The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $310 billion in premiums annually in California. Since 2011 the California Department of Insurance received more than 1,000,000 calls from consumers and helped recover over $469 million in claims and premiums. Please visit the Department of Insurance website at www.insurance.ca.gov. Non-media inquiries should be directed to the Consumer Hotline at 800.927.4357. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.