SECTIONS 1685-1700 - California Statutes

INSURANCE CODE

SECTION 1685-1700

1685. The commissioner may issue to a person eligible therefor a
certificate of convenience to act as any of the following:
(a) Any type of a licensee under this chapter or Chapter 6
(commencing with Section 1760), 7 (commencing with Section 1800), or
Part 5 (commencing with Section 121401) of Division 2 to administer
the business of a licensed person who has died or who has been
declared incompetent by the judgment of a court of competent
jurisdiction. That certificate of convenience may be denominated an
estate certificate of convenience.
(b) Any type of a licensee under this chapter or Chapter 6
(commencing with Section 1760), 7 (commencing with Section 1800), or
Part 5 (commencing with Section 121401) of Division 2 to conserve the
business of a licensed natural person who enters the military
service of the United States or to conserve the business of an
organization under the conditions specified in Section 1697. That
certificate of convenience may be denominated a military service
certificate.
(c) An industrial debit collection certificate holder to transact
industrial life and industrial disability insurance.
(1) "Industrial life insurance" means life insurance with an
aggregate face amount sold to any one insured and in force at any one
time in an amount not exceeding ten thousand dollars ($10,000);
premiums are payable at least monthly; premiums are collected in
person and not by mail or otherwise by the industrial debit
collection certificate holder with a written receipt delivered to the
insured, and the words "INDUSTRIAL LIFE POLICY" or "MONTHLY DEBIT
ORDINARY" are printed on the policy as part of the descriptive
matter.
(2) "Industrial disability insurance" means disability insurance
with premiums payable at least monthly at a rate not greater than
fifteen dollars ($15) per person, per month; premiums are collected
in person and not by mail or otherwise by the industrial debit
collection certificate holder with a written receipt delivered to the
insured and with the words "INDUSTRIAL POLICY" printed on the policy
as part of the descriptive matter.
(3) An industrial debit collection certificate holder may collect
premiums on insurance policies not solicited by him or her so long as
the premiums are collected in person and not by mail or otherwise by
the certificate holder at least once a month and the insured is
issued a written receipt for the premium payment thereof.
(4) An industrial debit collection certificate holder shall be
subject to the provisions of this code regulating the conduct of life
agents.
Certificates of convenience issued pursuant to subdivision (c) may
be denominated certificates of convenience pending examination.

1686. To be eligible for an estate certificate of convenience, a
person must be one of the following:
(a) The executor or administrator of the estate of a deceased fire
and casualty broker-agent or life agent.
(b) If no executor or administrator has been appointed, the
surviving spouse or heir otherwise entitled to conduct the business
of the deceased fire and casualty broker-agent or life agent.
(c) The conservator of the estate of a fire and casualty
broker-agent or life agent.

1687. Except as provided in Section 1637, to be eligible for a
military service certificate of convenience, a person must be
nominated therefor by the holder of a permanent license who, while
the holder thereof, entered the military service of the United
States. "Military service" and "persons in the military service" have
the meanings ascribed to them by Section 101 of the Soldiers' and
Sailors' Relief Act of 1940.

1688. To be eligible for a certificate of convenience to act as an
industrial debit collection certificate holder, a person must be an
applicant for a permanent license to act as a life-only agent or an
accident and health agent. An industrial debit collection certificate
shall be issued only to act in the capacity for which the license is
sought.

1689. (a) A person is not eligible for a certificate of convenience
pending examination if the person has ever been issued in California
a certificate of convenience or permanent license, nor unless
appointing insurers, certify to the commissioner that the person is
enrolled in and will pursue a course of study and instruction
previously approved by the commissioner.
(b) In the event the applicant obtains more than one appointment,
all appointing insurers shall certify that the applicant is enrolled
in, and pursues, the training course. Each appointing insurer
subsequently appointing the applicant shall be equally responsible
for the continuation of the study and instruction.

1691. (a) Every insurer shall have an approved training program on
file with the commissioner or have filed a blanket authorization to
certify to enrollment in an approved course of instruction before
appointing any certificate of convenience holder. No training course
may be used to qualify an applicant for a certificate of convenience
unless it is first approved by the commissioner. Before approving any
such course the commissioner shall be satisfied that it meets all
the following requirements:
(1) That it covers the fundamentals of insurance, insurance
regulation, and instruction in those classes of insurance in which
the applicant will be licensed.
(2) That it contains a system of examinations or progress checks
whereby it can be determined whether the person is taking the course
in good faith and obtaining information and training. That
examinations or progress checks shall be in writing, be completed by
the certificate holder, and be kept on file in the state for a period
of two years.
(b) The approval of a course of study and instruction may be
withdrawn by the commissioner if he or she finds after notice and
hearing that either:
(1) The course as administered does not meet the requirements for
its approval.
(2) The content of the course is not then adequate to meet the
requirements hereinabove set forth.
(c) Upon withdrawal of approval of the course the commissioner
shall after notice and hearing forthwith call all holders of
certificates of convenience who are enrolled in the course for
examination and shall not issue any certificate of convenience to any
person enrolled in the course until the course has been revised,
resubmitted to, and reapproved by the commissioner.

1692.1. (a) The privilege of an insurer to certify to the
enrollment of applicants in any course of study and instruction shall
be automatically suspended without any action by the commissioner
whenever more than 66 2/3 percent of its holders of certificates of
convenience during the calendar year fail to qualify for permanent
licenses during a period of six months following issuance of a
certificate of convenience to each such holder. Any suspension shall
continue until the commissioner is satisfied that the insurer has
taken adequate action to prevent a recurrence of the failure to
qualify the requisite percentage of certificate of convenience
holders for permanent licenses.
(b) Each insurer who has an approved training course on file with
the commissioner pursuant to Section 1691 or a blanket authorization
to certify enrollment in an approved course of instruction, shall
keep and maintain complete records on each appointed certificate of
convenience holder and shall file annually with the commissioner on
or before August 15 a written report which shall contain, by type of
certificate specified in Section 1685, all of the following:
(1) The number of certificate of convenience holders appointed
during the preceding calendar year.
(2) The number of certificate of convenience holders who qualified
for permanent licenses within the specified six-month period.
(3) The percentage of certificate of convenience holders who
qualified for permanent licenses within the specified six-month
period.
(c) Any such insurer who fails to report on or before August 15 or
who files an incomplete report shall automatically be suspended
until a complete report is filed in accordance with subdivision (b).
All suspensions pursuant to this section shall commence on the final
date the report is required to be filed. During any period of
suspension of the privilege the insurer or broker-agent is also
prohibited from appointing any holder of a certificate of convenience
appointed by another insurer. The commissioner may, after notice and
hearing suspend the privilege of any parent, subsidiary, affiliate
or controlled insurer to prevent avoidance of the suspension.
(d) At the time of filing the written report required by this
section, an insurer which has failed to qualify the required
percentage of certificate of convenience holders for permanent
licenses may as a part of the report do any of the following:
(1) Furnish written evidence of mitigating relevant facts.
(2) Furnish written evidence of corrective action taken, or a
written description of action proposed, which should result in future
compliance with this section.
(3) Request termination of the automatic suspension for specified
reasonable cause.
(4) Request that a hearing be held to determine whether the
automatic suspension should be annulled or confirmed.
(e) The commissioner may after notice and hearing stay, annul,
reduce, terminate or confirm the time of the automatic suspension
otherwise required in this section upon a showing, satisfactory to
the commissioner, that there is good cause therefor, and that
corrective action has been taken to prevent a recurrence of the
failure to qualify the requisite percentage of certificate of
convenience holders for permanent licenses. The preventive measures
shall include the establishment of procedures both to assure proper
training to enable certificate holders to pass the qualifying license
examination and to insure proper selection of prospective
certificate holders to the end that a reasonable proportion of those
selected will in good faith pursue the course of study and pass the
qualifying examination.
(f) Except for subdivisions (b) and (c), this section shall not
apply to an insurer during any calendar year in which the insurer
appointed 25 or fewer of those certificate of convenience holders.
(g) Any hearing under this article shall be conducted in
accordance with the provisions of Chapter 5 (commencing with Section
11500) of Part 1 of Division 3 of Title 2 of the Government Code, and
the commissioner shall have all the powers granted therein.
(h) The commissioner's power of termination of the certificate of
convenience privilege pursuant to Section 1692.1 shall be exercised
when 50 percent or more of the holders of certificates of convenience
issued during the calendar year beginning January 1, 1978, fail to
qualify for permanent licenses. That power of termination shall be
exercised when 25 percent or more of the holders of certificates of
convenience issued during the calendar year beginning January 1,
1979, fail to qualify for permanent licenses.

1693. An estate certificate of convenience expires upon the
happening of any of the following events, whichever occurs first:
(a) Upon the filing with the commissioner of a certified copy of
an order appointing an executor or administrator, if the certificate
of convenience has been issued to a person other than the person so
appointed executor or administrator.
(b) Upon the filing with the commissioner of a certified copy of
an order appointing a new conservator of the estate of a fire and
casualty broker-agent or life agent.
(c) Upon the disposal of the business of the fire and casualty
broker-agent or life agent who is deceased or for whom a conservator
of the estate has been appointed.
(d) Upon the expiration of one year after the death of the
deceased fire and casualty broker-agent or life agent; provided,
however, that if during the said year the holder of the certificate
of convenience files an application for a license to act as a fire
and casualty broker-agent or life agent in his or her individual
capacity, then the certificate of convenience may remain in force
until the holder thereof has been given an opportunity to take the
qualifying examination for the license.
(e) Upon the termination of the conservatorship of the estate of
the fire and casualty broker-agent or life agent.

1694. A military service certificate of convenience shall terminate
upon the relicensing of the nominating licensee, but in no event
shall it remain in force beyond the period set forth in Section 1722.

1695. A certificate of convenience to act as an industrial debit
certificate holder or pending examination expires at one of the
following times, whichever occurs first:
(a) Two days after the mailing of notice of failure of the
qualifying examination; or
(b) Six months after the issuance of the certificate of
convenience.

1697. A military service certificate of convenience may be issued
to an organization only under the following circumstances:
(a) Such organization is the holder of a permanent license, and
(b) The person entering the military service of the United States
is the only natural person named on the license of such organization.

1698. The military service certificate of convenience referred to
in Section 1697 expires at one of the following times, whichever
occurs first:
(a) Upon the qualification of a natural person to be named on the
permanent license of the organization; or
(b) Six months after the issuance of the certificate of
convenience.

1699. A person holding a certificate of convenience pending
examination who passes the qualifying examination and is otherwise
eligible for the permanent license applied for is eligible to receive
such permanent license provided that, if such permanent license is
to be issued for a license period for which the license fee has not
been paid, such license shall not be issued until the required fee
has been paid; and provided further that unless such fee is paid
within 60 days after mailing to him of a notice of such eligibility
such fee shall be increased by an amount equal to the fee for one
license year for such license and eligibility for such license shall
in all events terminate unless exercised within one year following
passing of the qualifying examination. This section shall not operate
to extend any certificate of convenience pending examination beyond
six months after the issuance thereof and the person who held the
same shall be deemed unlicensed for all purposes during the period
between the termination of such certificate and the actual issuance
of such permanent license.

1700. If the holder of any certificate of convenience pending
examination fails the qualifying examination by reason of his failure
to appear for examination, the commissioner may after notice and
hearing require the cancellation of any or all contracts of insurance
transacted by or through the holder of such certificate of
convenience and may cancel the certificate of authority of any
insurer which fails to comply with such order.