California Insurance Code 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.
