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State of California
Department of insurance
300 capitol mall, 17th floor
Sacramento, California 95814

RH-01-016450

CALIFORNIA CODE OF REGULATIONS, TITLE 10.

CHAPTER 5, SUBCHAPTER 1

ADOPT Article 4.5 TO READ:

Article 4.5 PROCEDURES GOVERNING PERSONS SUBJECT TO

SECTION 2175 PROCEDURES GOVERNING PROHIBITED PERSONS

Section 2175.1 Purpose

Section 2175.2 Definitions

Section 2175.3 Who Must Comply

Section 2175.4 Prohibited Persons Currently Engaged in or Transacting the Business of Insurance

Section 2175.5 Responsibility of Insurers and Other Employers to Identify Prohibited Persons

Section 2175.6 Application for Written Consent

Section 2175.7 Consideration of Applications for Written Consent

Section 2175.8 Written Consent is a Prerequisite for Licensing

Section 2175.9 Standard Form of Application for Requesting Written Consent

Section 2175.10 Requirements for Character References

SECTION 2176 DENIAL, EXPIRATION OR TERMINATION OF WRITTEN CONSENT

Section 2176.1 Effect of False or Misleading Statements

Section 2176.2 Written Consent Effective for Specified Positions and Responsibilities Only


Section 2176.3 Expiration of Temporary Written Consent

Section 2176.4 Subsequent Convictions of Prohibited Persons Previously Granted Written Consent

SECTION 2177 HEARING PROCEDURES

Section 2177.1 Time Limit in Which to Request a Hearing

Section 2177.2 Form of Request for Hearing and Information Required

Section 2177.3 Filing and Service Requirements

Section 2177.4 Time of Hearing

Section 2177.5 Continuances; Good Cause

Section 2177.6 Role of Department of Insurance

Section 2177.7 Representation of Prohibited Person at the Hearing

Section 2177.8 Administrative Law Judge's Authority

Section 2177.9 Burden of Proof

Section 2177.10 Evidence

Section 2177.11 Additional Evidence or Briefing

Section 2177.12 Official Notice

Section 2177.13 Hearing Reporter

Section 2177.14 Costs

SECTION 2175 PROCEDURES GOVERNING PROHIBITED PERSONS

Section 2175.1 Purpose

The purpose of these regulations is to implement the provisions of Title 18 United States Code sections 1033 and 1034 "(the Act"), as well as California Insurance Code sections 1723 and 1742.2.

NOTE: Authority cited: SEC. 3 and 5 of Senate Bill 941, Chapter 782, Statutes of 1999. Reference: 1723 and 1742.2 of the California Insurance Code and 18 U.S.C §1033 and 1034.


Section 2175.2 Definitions

For the purpose of these regulations, the following definitions shall apply:

NOTE: Authority cited: SEC. 3 and 5 of Senate Bill 941, Chapter 782, Statutes of 1999. Reference: 1723 and 1742.2 of the California Insurance Code and 18 U.S.C §1033.

Section 2175.3 Who Must Comply

Any and all Prohibited Persons who are currently transacting, or engaging in, the business of insurance, or who intend to transact, or engage in, the business of insurance, must submit a completed Request for Consent to the California Department of Insurance (Department).

Section 2175.4 Prohibited Persons Currently Engaged in or Transacting the Business of Insurance

NOTE: Authority cited: SEC. 3 and 5 of Senate Bill 941, Chapter 782, Statutes of 1999. Reference: 1723 and 1742.2 of the California Insurance Code and 18 U.S.C §1033.

Section 2175.5. Responsibility of Insurers and Other Employers to Identify Prohibited Persons

NOTE: Authority cited: SEC. 5 of Senate Bill 941, Chapter 782, Statutes of 1999. Reference: 1742.2 of the California Insurance Code.

Section 2175.6. Applications for Written Consent

The Prohibited Person must file an Application for Written Consent with the Department as set forth herein.

(1) A credit report that has been prepared within thirty days of the date that the Application for Written Consent is submitted to the Department. The credit report must be obtained from a recognized Credit Bureau.

(2) Fingerprint impressions on Form #FD-258, including a check in the amount of $74.00 made payable to "Sylvan/Identix Fingerprinting Centers."

(3) An application processing fee in the amount of $124.00.

(4) Two 2" by 2" recent passport photographs attached to the upper right hand corner of the first page of the application for written consent.

(5) Certified copies of all court documents setting forth the initial conviction and any subsequent disposition, together with any other relevant documents or information that the Prohibited Person would like to have considered. All such documents must be submitted within 30 days of the Department's receipt of the application.

(6) Any amendment to the application must be filed immediately upon the occurrence of any event that would change any answer on the application. Failure to file a timely amendment may result in denial of the Request for Written Consent or the immediate withdrawal of previously granted consent.

NOTE: Authority cited: SEC. 3 and 4 of Senate Bill 941, Chapter 782, Statutes of 1999. Reference: 1723, 1727, and 1742.2 of the California Insurance Code.

Section 2175.7. Consideration of Applications for Written Consent

NOTE: Authority cited: SEC. 2 and 3 of Senate Bill 941, Chapter 782, Statutes of 1999. Reference: 1629 (a) through (d), 1723 (a) and (b) and 1742.2 of the California Insurance Code.

Section 2175.8 Written Consent as a Prerequisite for Licensing

NOTE: Authority cited: SEC. 3 and 4 of Senate Bill 941, Chapter 782, Statutes of 1999. Reference: 1723, 1727, and 1742.2 of the California Insurance Code.

Section 2175.9. Standard Form of Application for Requesting Written Consent

NOTE: Authority cited: SEC. 2, 3, 4, and 5 of Senate Bill 941, Chapter 782, Statutes of 1999. Reference: 1669, 1723, 1727 and 1742.2 of the California Insurance Code.

Section 2175.10. Requirements for Character References

Character references may be submitted to the Department for the Commissioner's consideration. Character references shall state how long and in what capacity the person making the reference has known the applicant. References shall also expressly state that the person providing the reference is aware that the reference is being provided in connection with a Request for Written Consent to engage in or transact the business of insurance despite the existence of a relevant felony criminal conviction.

NOTE: Authority cited: SEC. 2, 3 and 5 of Senate Bill 941, Chapter 782, Statutes of 1999. Reference: 1723, 1727 and 1742.2 of the California Insurance Code.

SECTION 2176 DENIAL, EXPIRATION OR TERMINATION OF WRITTEN CONSENT

Section 2176.1. Effect of False or Misleading Statements

Section 2176.2 Written Consent Effective for Specified Positions and Responsibilities Only

Section 2176.3 Temporary Written Consent

NOTE: Authority cited: SEC. 1, 2, and 5 of Senate Bill 941, Chapter 782, Statutes of 1999. Reference: 1065.3, 1669 and 1742.2 of the California Insurance Code.

Section 2176.4 Subsequent Convictions of Prohibited Persons Previously Granted Written Consent

Any Prohibited Person given a Written Cnsent to participate in the business of insurance shall immediately notify the Department if the Prohibited Person is subsequently convicted of an offense under 18 U.S.C. §1033, or any felony offense involving dishonesty or breach of trust making them once again subject to the provisions of 18 U.S.C. §1033 and these regulations. The consent previously issued is terminated automatically upon conviction for the subsequent offense. The Prohibited Person shall be informed in writing, via certified mail, return receipt requested, that the consent previously issued has been withdrawn and that engaging in the business of insurance again violates the Act.

NOTE: Authority cited: SEC. 1, 2, and 5 of Senate Bill 941, Chapter 782, Statutes of 1999. Reference: 1065.3, 1669 and 1742.2 of the California Insurance Code.

SECTION 2177 HEARING PROCEDURE

Section 2177.1 Time Limit in Which to Request a Hearing

Applicants who have received a Notice of Denial of Consent may request a hearing, in writing, within sixty (60) calendar days after the issue date of the Notice.

Section 2177.2 Form of Request for Hearing and Information Required

A Request for Hearing shall be in writing and must include:

Section 2177.3 Filing and Service Requirements

Section 2177.4 Time of Hearing

The Chief Administrative Law Judge of the Administrative Hearing Bureau shall assign the case to an Administrative Law Judge for hearing. An administrative law judge shall hold a hearing within sixty (60) days of the Administrative Hearing Bureau's receipt of the Department's response to the Request for Hearing. The hearing may be held on a later date upon agreement of both parties. The Administrative Law Judge shall give the parties not less than 10 days written notice of the date on which a hearing is scheduled.

Section 2177.5 Continuances; Good Cause

Section 2177.6 Role of Department of Insurance

The Department of Insurance is a party in the hearing, representing the Commissioner. The Administrative Hearing Bureau shall notify the Department within 20 days of its receipt of any complete and appropriately filed, Request for Hearing. The Department shall file an original and one copy of its response to the underlying issues raised by the Prohibited Person in the Request as well as an original and one copy of any documents upon which it plans to rely at the hearing. Copies of the Department's response and any documents filed with the Administrative Hearing Bureau shall also be served on the Prohibited Person and/or their representative, if any.

Section 2177.7 Representation of Prohibited Person at the Hearing

A Prohibited Person may be represented in the proceedings before the Administrative Hearing Bureau. A representative is not required and the representative need not be an attorney.

Section 2177.8 Administrative Law Judge's Authority

Section 2177.9. Burden of Proof

The burden of proof at a hearing on a Request for Written Consent is on the Prohibited Person seeking the Commissioner's Written Consent to engage in or transact the business of insurance in this State.

NOTE: Authority cited: SEC. 3, 4, and 5 of Senate Bill 941, Chapter 782, Statutes of 1999. Reference: 1723, 1727 and 1742.2 of the California Insurance Code.

Section 2177.10 Evidence

Section 2177.11. Additional Evidence or Briefing

(a) The Administrative Law Judge may require the production of further evidence or briefing on any issue. If the administrative law judge determines that specific evidence or briefing is necessary as a part of the record, he or she shall set a deadline for the parties to file the requested evidence or briefing.

(b) Unless ordered by the Administrative Law Judge, or upon written motion for good cause shown, no additional evidence shall be introduced after the close of the evidentiary hearing.

Section 2177.12 Official Notice

In reaching a decision, official notice may be taken, either before or after submission of the case for decision, of any fact that may be judicially noticed by the courts of this state. All parties shall be informed of the matters to be noticed, and those matters shall be noted in the record, referred to therein, or appended thereto. Pursuant to a written request, all parties shall be given a reasonable opportunity to refute the officially noticed matters, either by evidence or by written or oral presentation to the Administrative Law Judge.

Section 2177.13 Hearing Reporter

The proceedings at the hearing shall be reported by a hearing reporter. However, upon the consent and agreement of all parties, the proceedings may be reported electronically. Parties must make their own arrangements for payment with the hearing reporter if they wish to obtain a copy of the reporter's transcript.


Section 2717.14 Costs

All parties shall bear their own costs.

NOTE: Authority cited: SEC. 3, 4, and 5 of Senate Bill 941, Chapter 782, Statutes of 1999. Reference


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Last Revised - February 05, 2002
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