Bonds - Insurance Adjuster Act - Insurance - CA

Section § 14050

This section of the law states that a person or business applying for a license needs to provide a $2,000 surety bond, which is like a financial guarantee, to ensure they will conduct their business honestly. The bond must be from a company authorized to operate in the state and approved by the insurance commissioner.

However, this bond is not necessary for licensed insurance adjusters or their employees if they are working under a qualified manager who has already arranged for a bond or insurance. Similarly, adjusters, employees, or managers do not need a separate bond if they work for a business entity that has filed the appropriate bond or insurance certificate.

The bond or insurance certificate must list all individuals who can work under it, and any changes to the list must be reported to the commissioner within 30 days.

(a) A license shall not be issued under this chapter unless the applicant files with the commissioner a surety bond executed by a surety company authorized to do business in the state in the sum of two thousand dollars ($2,000) conditioned for the faithful and honest conduct of business by the applicant. The bond’s form, execution, and sufficiency of the sureties shall be approved by the commissioner.

(b)

(1) Notwithstanding subdivision (a), a surety bond is not required for a licensed insurance adjuster, or an employee of a licensee, who adjusts claims on behalf of, and under the direction of, a licensee who is qualified as a manager, as described in Section 14029, and who has filed a surety bond or certificate of insurance. Notwithstanding subdivision (a), a licensed insurance adjuster, an employee of a licensee, or a qualified manager is not required to file a surety bond or certificate of insurance if that licensed insurance adjuster, employee of a licensee, or qualified manager adjusts claims for an association, organization, partnership, limited liability company, or corporation that has filed a surety bond or certificate of insurance.

(2) A surety bond or certificate of insurance filed for the purposes described in paragraph (1) shall provide the names of all licensed insurance adjusters, employees, or qualified managers who may perform duties under that surety bond or certificate of insurance on a form provided by the commissioner. Any changes, removals, or additions to the licensed insurance adjusters, employees, or qualified managers listed on the form shall be made within 30 days in the manner required by the commissioner.

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Section § 14051

This law discusses a bond required from a person or entity that acts as a principal. If someone gets hurt because the principal does something intentionally harmful, malicious, or wrong, the injured person can sue the bond to get compensated for their damages.

The bond required by this article shall be taken in the name of the people of this state and every person injured by the willful, malicious, or wrongful act of the principal may bring an action on the bond in his or her own name to recover damages suffered by reason of such willful, malicious, or wrongful act.

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Section § 14052

This law section requires any person or business with a license to act as an insurance adjuster to always keep an active surety bond or insurance certificate on file. They must also list all licensed individuals who can operate under that bond or certificate. If they fail to do so, their license will be suspended immediately and can only be reinstated once they reapply and provide the necessary bond or certificate. Additionally, the commissioner has the authority to deny their reinstatement application for any reason that would typically prevent issuing or renewing a license, or if they operated under a suspended license due to not maintaining the required bond or certificate.

(a) Every licensee who is required by this article to file a surety bond or a certificate of insurance shall at all times maintain on file the surety bond or certificate required by this article in full force and effect and shall maintain the names of all licensed insurance adjusters, employees, or qualified managers who may perform duties under that surety bond or certificate of insurance. If the licensee fails to maintain the surety bond or certificate or the names thereon, their license shall be immediately suspended and shall not be reinstated until an application therefor, in the form prescribed by the commissioner, is filed together with a proper surety bond or certificate.

(b) The commissioner may deny the application notwithstanding the applicant’s compliance with this section:

(1) For any reason that would justify a refusal to issue, or a suspension or revocation of, a license.

(2) For the performance by applicant of any practice while under suspension for failure to keep the bond or certificate in force, for which a license under this article is required.

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Section § 14053

This law section states that instead of providing a surety bond, an individual or company can deposit $2,000 with the State of California. This can be in the form of cash, a bank deposit from a federally insured bank, a savings association's investment certificate, or a credit union share account insured by the National Credit Union Administration or an approved agency.

In lieu of the surety bond required by this article there may be deposited with the State of California the sum of two thousand dollars ($2,000) in cash, or evidence of deposit of the sum of two thousand dollars ($2,000) in banks authorized to do business in this state and insured by the Federal Deposit Insurance Corporation, or investment certificates or share accounts in the amount of two thousand dollars ($2,000) issued by a savings association doing business in this state and insured by the Federal Deposit Insurance Corporation, or evidence of a certificate of funds or share account of the sum of two thousand dollars ($2,000) in a credit union, as defined in Section 14000 of the Financial Code, whose share deposits are guaranteed by the National Credit Union Administration or guaranteed by any other agency approved by the Department of Financial Protection and Innovation.

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Section § 14054

Bonds that are submitted to the commissioner continue to be valid until the surety company gives a 30-day notice to end their future responsibility.

Bonds executed and filed with the commissioner pursuant to this article shall remain in force and effect until the surety has terminated future liability by 30-day notice to the commissioner.

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