12 Hours of Study on Ethics and the California Insurance Code

Temario del curso

El tiempo de estudio de cada sección es proporcional a su extensión; en total suman 12 horas de estudio activo. Cada sección termina con preguntas de repaso. El curso se imparte en inglés; debajo de cada título se incluye su traducción.

1. Sección 1

   59 minutos de estudio obligatorio

   The California Insurance Regulatory System and the Role of the Producer

   El sistema regulatorio de seguros de California y el papel del productor

   Objetivos de aprendizaje

   • Define insurance, insurer, insured, and "transact" under Cal. Ins. Code §§22, 23, and 35, and identify activities that require a license under §1631.
   • Describe how the Insurance Commissioner is selected and identify the Commissioner's principal duties and conflict-of-interest restrictions.
   • Explain the Department of Insurance's complaint-handling obligations and the producer's exposure to consumer complaints.
   • Distinguish admitted insurers, nonadmitted insurers placed through surplus line brokers, the FAIR Plan, and the guarantee associations.
   • Differentiate agent, broker, broker-agent, life, accident and health, and personal lines license capacities, including the role of appointments.
   • Identify the Commissioner's disciplinary tools, including denial, suspension, revocation, restricted licenses, and monetary penalties.

2. Sección 2

   53 minutos de estudio obligatorio

   Licensing, Prelicensing Education, Continuing Education and License Maintenance

   Licencias, educación previa, educación continua y mantenimiento de la licencia

   Objetivos de aprendizaje

   • State the prelicensing education requirement under Cal. Ins. Code §1749 as amended by AB 943 effective January 1, 2026, including the one-hour insurance fraud component.
   • Identify the safeguards required for online prelicensing courses and the three-year validity of completion certificates.
   • Describe the examination, fingerprinting, and background review steps, and list major grounds for license denial under §§1668 and 1669.
   • Calculate a license term and explain the renewal, late renewal, and 60-day continued-operation rules.
   • Apply continuing education rules, including the 24-hour and three-hour ethics requirements, ethics carry-over limits, and annuity and long-term care training.
   • Identify ongoing reporting and display duties, including address changes, background changes, names, and license numbers on materials.

3. Sección 3

   46 minutos de estudio obligatorio

   Agency Law and the Producer's Ethical Duties (agent vs. broker, fiduciary duty, duty of care, disclosure)

   Derecho de agencia y deberes éticos del productor

   Objetivos de aprendizaje

   • Explain actual and ostensible agency, imputed notice, and principal liability under Civil Code §§2295-2338 as applied to insurance producers.
   • Distinguish an insurance agent from an insurance broker under Cal. Ins. Code §§31, 33, 1621, and 1623, and identify facts that create or rebut the presumption of broker status.
   • Describe the producer's duty of care in procuring requested coverage and identify circumstances that create a greater duty under California case law.
   • Apply the duties of disclosure under §§330 and 332 and the broker fee requirements of 10 CCR §2189.3 to practical scenarios.
   • Identify the statutory duty owed to prospective insureds age 65 or older and related senior protections under §§785-787.
   • Use a structured decision-making process to recognize and manage conflicts of interest.

4. Sección 4

   47 minutos de estudio obligatorio

   Fiduciary Handling of Premiums, Trust Accounts and Commissions

   Manejo fiduciario de primas, cuentas fiduciarias y comisiones

   Objetivos de aprendizaje

   • Define fiduciary funds under Cal. Ins. Code §1733, including premium, return premium, and financed premium, and state the consequence of diversion.
   • Identify the three lawful methods of holding fiduciary funds under §§1734 and 1734.5 and the limits on commingling.
   • List the principal recordkeeping requirements of 10 CCR §§2190.1-2190.7, including retention periods and location of records.
   • Apply the rules for handling return premium, including gross remittance to the person entitled and §481 refund provisions.
   • Explain when commissions may be retained and to whom they may lawfully be paid.
   • Describe criminal, administrative, and civil consequences of mishandling fiduciary funds and design internal controls to prevent them.

5. Sección 5

   51 minutos de estudio obligatorio

   Unfair Practices I: Misrepresentation, False Advertising, Defamation and Boycott

   Prácticas desleales I: tergiversación, publicidad falsa, difamación y boicot

   Objetivos de aprendizaje

   • Identify the purpose, scope, and structure of the California Unfair Insurance Practices Act (Cal. Ins. Code §§790–790.10), including which persons it covers and the subjects of each subdivision of §790.03.
   • Distinguish misrepresentation of policies and misleading comparisons under §790.03(a), §780 and §781 from false or deceptive advertising under §790.03(b), and apply the 'known or should have been known' and 'reasonable care' standards to sales scenarios.
   • Apply California's life and annuity advertising regulations (10 CCR §2547.1 et seq.), the life insurance illustration law (§10509.950 et seq.), and the senior advertising rules (§§787, 787.1) to print, digital, and lead-generation marketing.
   • Determine when business cards, quotations, print advertisements, and emails must display the license number and the word 'insurance' under §1725.5, and when a true or fictitious business name may be disapproved under §1724.5.
   • Recognize prohibited disparagement of insurers, boycott/coercion/intimidation (§790.03(c)), and false financial statements and entries (§790.03(d)–(e)).
   • Explain the Commissioner's enforcement process and penalties under §§790.04–790.07 and §790.035, and the effect of Moradi-Shalal v. Fireman's Fund (1988) on private lawsuits.

6. Sección 6

   52 minutos de estudio obligatorio

   Unfair Practices II: Rebating, Inducements, Twisting and Replacement

   Prácticas desleales II: reembolsos indebidos, incentivos, twisting y reemplazo de pólizas

   Objetivos de aprendizaje

   • Explain how Proposition 103 (1988) and current CIC §750(d) affect commission rebating in California, and distinguish commission rebating from insurer premium rebates and from the claims-referral crime in current §750.
   • Distinguish lawful lender insurance requirements from prohibited tie-ins under CIC §770, and identify when sharing compensation with others violates CIC §§1631, 1633 and 1724.
   • Recognize twisting and churning practices and apply CIC §§780–783 and §790.03(a), including the applicable criminal and license penalties.
   • Apply the definitions, exemptions and agent and insurer duties of the replacement article, CIC §§10509–10509.7, to a proposed life insurance or annuity replacement.
   • Identify violations and penalties under CIC §§10509.8–10509.9, including unnecessary replacement annuities for consumers age 65 or older, and apply the senior 30-day free look in CIC §10127.10.
   • Evaluate a proposed replacement or §1035 exchange by weighing surrender charges, new surrender and contestability periods, insurability and lost benefits, and document a recommendation honestly.

7. Sección 7

   50 minutos de estudio obligatorio

   Fair Claims Practices, Unfair Discrimination and Consumer Protection

   Prácticas justas en reclamaciones, discriminación injusta y protección al consumidor

   Objetivos de aprendizaje

   • Identify the sixteen unfair claims settlement practices in Cal. Ins. Code §790.03(h) and explain the knowing-act and general-business-practice standards and the §790.035 penalties.
   • Apply the key calendar-day deadlines of 10 CCR §§2695.5 and 2695.7 (15, 21, 40, 30-day status and 30-day payment) to claim scenarios.
   • Describe the producer's duties when receiving notice of a claim, including notice to an agent and the imputation rule, and when describing coverage to a claimant.
   • Explain the implied covenant of good faith and fair dealing at a high level using Gruenberg v. Aetna and Egan v. Mutual of Omaha.
   • Distinguish lawful risk classification from unfair discrimination under §790.03(f), §§679.71-679.72, §11628, §10140 et seq., §676.9 and Proposition 103 (§§1861.02-1861.03).
   • Direct consumers to the appropriate remedies, including the CDI complaint program (§12921.1), rate challenges (§1858) and Independent Medical Review.

8. Sección 8

   50 minutos de estudio obligatorio

   Privacy, Confidentiality and Information Security

   Privacidad, confidencialidad y seguridad de la información

   Objetivos de aprendizaje

   • Identify the entities, lines of insurance and individuals covered by the Insurance Information and Privacy Protection Act (Cal. Ins. Code §§791-791.29) and explain how the act applies to producers.
   • Apply the IIPPA rules on pretext interviews, notices of information practices, disclosure authorization forms, access, correction and adverse underwriting decisions to common producer situations, including the applicable time limits.
   • Determine whether a proposed disclosure of personal or privileged information is permitted under Cal. Ins. Code §791.13, GLBA and the California Financial Information Privacy Act, and describe the enforcement consequences of improper disclosure.
   • Distinguish the roles of the CDI privacy regulations, the CCPA/CPRA exemptions, the CMIA, HIPAA, and the special HIV and genetic-information protections in insurance transactions.
   • Describe a producer's duties under California's reasonable-security, breach-notification and records-disposal laws and the status of SB 354 (2026).
   • Select appropriate information-security practices (MFA, encryption, secure transmission, call-back verification, clean desk, vendor controls) to prevent phishing, social engineering and wire fraud.

9. Sección 9

   74 minutos de estudio obligatorio

   Seniors, Annuities, Suitability and Best Interest

   Personas mayores, anualidades, idoneidad y mejor interés

   Objetivos de aprendizaje

   • Identify the duties and prohibitions that apply when transacting insurance with persons age 65 or older under Cal. Ins. Code §§785–789.10, including advertising, senior designations and in-home meeting rules.
   • Apply the four obligations of California's annuity best interest standard (care, disclosure, conflict of interest and documentation) under Cal. Ins. Code §10509.9204 to a recommendation or replacement.
   • State the annuity training requirements of Cal. Ins. Code §§1749.8 and 10509.9205 and distinguish general annuity training from insurer product-specific training.
   • Explain the 30-day senior free look under Cal. Ins. Code §10127.10, including the treatment of variable products, and distinguish it from other cancellation periods.
   • Recognize prohibited Medi-Cal-related annuity sales, required written disclosures to elders, and prohibited personal dealings with clients under §§789.8, 789.9 and 1668.1.
   • Identify warning signs of elder financial abuse and diminished capacity and describe appropriate professional responses.

10. Sección 10

    74 minutos de estudio obligatorio

    Life, Disability and Health Insurance Provisions of the Code

    Disposiciones del Código sobre seguros de vida, discapacidad y salud

    Objetivos de aprendizaje

    • Apply the insurable interest rules of CIC §10110.1, including timing and the prohibition on stranger-originated policies, to client situations.
    • Explain how concealment and misrepresentation rules interact with the two-year incontestable clause and the impostor rule of CIC §10113.5.
    • Identify the free-look, grace-period, lapse-notice and designee rights that apply to individual life policies and describe the producer's duties at application, delivery and service.
    • Describe the uniform required provisions of individual disability policies (CIC §§10350.1–10350.12) and state their key claim deadlines.
    • Distinguish CDI-regulated health insurance from DMHC-regulated health care service plans and summarize guaranteed issue, rescission limits, parity and claims-payment rules.
    • Summarize key Medicare supplement and long-term care protections, including the birthday rule, the LTC free look and LTC training requirements.

11. Sección 11

    84 minutos de estudio obligatorio

    Property, Casualty and Personal Lines Provisions of the Code

    Disposiciones del Código sobre propiedad, responsabilidad y líneas personales

    Objetivos de aprendizaje

    • Explain how Proposition 103 (CIC §§1861.01–1861.05) requires prior approval of property and casualty rates and what that means for a producer's discussion of price.
    • Apply the mandatory automobile rating factors and Good Driver Discount criteria of CIC §§1861.02 and 1861.025 to a client's driving history.
    • State the current California minimum automobile liability limits under Vehicle Code §16056 and the UM offer and waiver rules of CIC §11580.2.
    • Identify the permitted grounds and notice periods for cancellation and nonrenewal of auto policies (CIC §§660–666, 1861.03(c)) and residential property policies (CIC §§675–678), including the wildfire moratorium of CIC §675.1.
    • Describe required residential disclosures and replacement-estimate standards (CIC §§10101–10103.4; 10 CCR §§2695.180–2695.183) and post-disaster claim protections (CIC §§2051.5, 2060, 2071, 10103.7).
    • Explain the mandatory earthquake offer (CIC §10081 et seq.) and the role and limits of the California FAIR Plan (CIC §10090 et seq.) when advising clients.

12. Sección 12

    80 minutos de estudio obligatorio

    Insurance Fraud: Recognition, Reporting, Penalties and Prevention

    Fraude de seguros: detección, denuncia, sanciones y prevención

    Hora obligatoria sobre fraude de seguros

    Objetivos de aprendizaje

    • Identify the principal California insurance fraud statutes, including Insurance Code §1871 et seq. and Penal Code §§548, 549, 550 and 551, and describe the conduct each prohibits.
    • Recognize common application, claims, workers' compensation, health, life and producer-committed fraud schemes and the red flags associated with them.
    • State the criminal, civil and licensing penalties for insurance fraud, including fines under Penal Code §550 and Insurance Code §1871.4, civil penalties under §1871.7, and license discipline under §§1668 and 1738.
    • Apply the producer reporting duty of Insurance Code §1872.41 by choosing the correct channel (Fraud Division portal before placement, insurer SIU after placement) and deadline.
    • Explain insurer obligations for special investigative units and fraud reporting (§§1872.4, 1875.20–1875.24), the §1871.2 fraud warning, and good-faith reporting immunity (§§1872.5, 1872.51, 1879.5).
    • Select fraud-prevention practices that protect clients, insurers and the producer's license in everyday application, premium-handling and claim situations.