Misrepresentation Of Policies - General Regulations - Insurance - CA

Section § 780

This law prohibits insurance companies, their officers, agents, brokers, or solicitors from releasing or using any statements that they know or should know are false regarding insurance policies. This includes lying about the terms of a policy, the benefits or privileges it offers, or any future dividends it may provide.

An insurer or officer or agent thereof, or an insurance broker or solicitor shall not cause or permit to be issued, circulated or used, any statement that is known, or should have been known, to be a misrepresentation of the following:

(a) The terms of a policy issued by the insurer or sought to be negotiated by the person making or permitting the misrepresentation.

(b) The benefits or privileges promised thereunder.

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Section § 781

In California, it is illegal to knowingly make false statements to influence someone's decision about insurance. This includes trying to convince someone to take out a new policy, reject an existing one in favor of a different insurer, or give up their current insurance. Additionally, you cannot provide misleading information comparing insurers or policies to sway someone to change or cancel their policy.

(a) A person shall not make any statement that is known, or should have been known, to be a misrepresentation (1) to any other person for the purpose of inducing, or tending to induce, such other person either to take out a policy of insurance, or to refuse to accept a policy issued upon an application therefor and instead take out any policy in another insurer, or (2) to a policyholder in any insurer for the purpose of inducing or tending to induce him or her to lapse, forfeit or surrender his or her insurance therein.

(b) A person shall not make any representation or comparison of insurers or policies to an insured which is misleading, for the purpose of inducing or tending to induce him or her to lapse, forfeit, change or surrender his or her insurance, whether on a temporary or permanent plan.

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Section § 782

If someone breaks the rules in Section 780 or 781, they can face serious penalties. They might pay a fine up to $25,000 or, if the victim lost more than $10,000, the fine could be up to three times the victim's loss. They could also spend up to a year in county jail or face both penalties. Importantly, if they owe any restitution to the victim, they must pay that before any fines.

Any person who violates the provisions of Section 780 or 781 is punishable by a fine not exceeding twenty-five thousand dollars ($25,000), or in a case in which the loss of the victim exceeds ten thousand dollars ($10,000), by a fine not exceeding three times the amount of the loss suffered by the victim, by imprisonment in a county jail for a period not to exceed one year, or by both a fine and imprisonment. Restitution to the victim ordered pursuant to Section 1202.4 of the Penal Code shall be satisfied before any fine imposed by this section is collected.

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Section § 783

This law states that if an insurance agent, broker, or solicitor knowingly breaks certain rules found in Sections 780 or 781, the commissioner can hold a hearing. If they're found guilty, their license can be suspended for up to three years.

Whenever any insurance agent, broker, or solicitor knowingly violates any provisions of Sections 780 or 781, the commissioner, after a hearing in accordance with the procedure provided in Article 13 of Chapter 5 of this part, may suspend the license of any such person for not exceeding three years.

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Section § 783.5

If an insurance company breaks rules from sections 780 or 781 on purpose, or lets its staff do so, the insurance commissioner can hold a hearing. If the company is found guilty, the commissioner can suspend its license to sell the type of insurance involved in the violation.

If an insurer knowingly violates any provision of Sections 780 or 781, or knowingly permits any officer, agent, or employee so to do, the commissioner, after a hearing in accordance with the procedure provided in Section 704, may suspend the insurer’s certificate of authority to do the class of insurance in respect to which the violation occurred.

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Section § 784

This law says that if you're called as a witness in a trial involving certain violations, you have to testify and provide any documents requested, even if it might make you look guilty. However, you won't be charged for the things you admit to during your testimony, with the exception of lying under oath, which can still get you prosecuted for perjury.

Any person may be compelled to testify and produce books and writings at the trial or hearing of any person charged with violating any provision of sections 780 or 781 even though such testimony or evidence may incriminate him. A person shall not be prosecuted for any act concerning which he is compelled so to testify or produce evidence, except for perjury committed in so testifying.

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