Insurance: examination of insurers

The law gives the Insurance Commissioner a clearer process to require corrective action after an examination. Companies that do not act can be ordered to comply and fined up to $20,000 for each unmet corrective-action category.

What the law does ​

• Requires examined companies to correct violations of insurance laws, regulations, accounting principles, and other binding rules identified in examination or operational reports.
• Allows the Commissioner to set compliance deadlines and grant extensions for good cause.
• Authorizes penalties of up to $20,000 for each category of required corrective action a company fails to take.
• Requires the Commissioner to issue an order to show cause and hold a hearing before ordering penalties and compliance when alleged violations are justified.
• Requires the State Bureau of Audits to receive a claims-practices examination file within 10 days when the Commissioner terminates or suspends that examination.

Who it affects ​

• Insurance companies examined by the California Department of Insurance.
• Insurance agents and brokers subject to examination-based corrective-action requirements.
• The Insurance Commissioner and the California Department of Insurance.

Context ​

Hearings and review of enforcement orders follow the Administrative Procedure Act.