Insurance.

The bill from the Committee on Insurance weaves author and policy substance into a comprehensive rethinking of California’s insurance-licensing framework, starting with a shift in terminology and scope. It reframes the traditional role of “agent” as a “stock agent” and realigns definitions across the licensing landscape, while also removing the requirement to submit fingerprint records for certain license applicants. The measure then expands the universe of licenses subject to automatic-denial procedures and background-information reporting, and it broadens how background information must be tracked and communicated to the regulatory authority.

Among the substantive changes, the legislation distinguishes brokers from stock agents and tightens the oversight of who may issue or sell securities on behalf of insurers, including new certificate and permit requirements for stock agents and related bond obligations. It introduces a bond requirement for broker applicants and strengthens the commissioner’s authority to suspend or revoke licenses for bad business practices or fraudulent activity. It also expands the fees and cost-recovery provisions tied to licensing activities and examinations, while reshaping the fingerprinting regime by deleting the current requirement for certain license streams.

The bill adds and clarifies several license categories to reflect evolving practice and risk management. It creates or updates limited licenses for cargo-related activities, including licenses for cargo owners and shippers and a streamlined approach for cargo-shipper licensing, with reduced or waived examination requirements and a modest application fee. It expands the blanket-insurance framework to cover volunteers for participating organizations such as schools, sports teams, and related entities. It broadens the definitions and disclosure requirements around background information, including actions concerning conduct for which a license was required but not possessed and civil actions by governmental or regulatory agencies alleging misconduct. It also extends the State Compensation Insurance Fund’s investment authority indefinitely, broadening permissible investment types and mechanisms, subject to specified limits.

In addition, the measure revises or adds provisions related to bail licensing, including requirements for bail licenses and the prohibition on certain bail-activities unless properly licensed, and strengthens enforcement and penalties related to improper practices in the bail and related insurance markets. It updates provisions governing alternative remedies and enforcement mechanisms for unfair or fraudulent practices, including procedures for civil actions and allocation of proceeds when private parties, district attorneys, or the state pursue claims. Finally, the bill makes targeted changes to health care claim payment timelines and related advertising disclosures for accelerated-benefit products, with phased operative dates; it also repeals and re‑adds one regulatory provision to harmonize cross‑references and clarify the licensing regime.

Together, these changes alter the regulator’s oversight of licensing, expand or reallocate certain lines of business (notably cargo, bail, and volunteer coverage), adjust risk-management tools (including investments by a state fund), and refine consumer-facing obligations around claims payment and advertising, all within a framework that remains subject to later regulatory implementation and transition. The provisions interact with existing licensing, consumer-protection, and financial-regulation structures, and several components carry phased or indefinite implementation timelines.