INDUSTRY NEWS
California Department of Insurance Issues 2024 Reminder About Background Reporting Requirements
All individuals holding a license or applying for one with the California Department of Insurance (CDI) are obligated to promptly report any changes in their background to the CDI within 30 days, as mandated by California Insurance Code section 1729.2.
This reporting obligation extends to any natural person listed under a business entity license or application, irrespective of their licensure status.
Individuals must report any of the following changes in background status within 30 days:
- Any felony or misdemeanor conviction, encompassing citations or traffic violations categorized as such;
- A filing of felony criminal charges in state or federal court;
- Administrative actions against any professional or occupational license;
- Discharge or attempt to discharge obligations related to insurance premiums or fiduciary funds in a personal or organizational bankruptcy proceeding;
- Any admission, judicial finding, filing of liability in a civil action, or determination of fraud, misappropriation, conversion of funds, misrepresentation, or breach of fiduciary duty; or
- Any finding of liability in a civil action involving allegations of elder or dependent abuse.
Failure to adhere to the reporting timeframe may lead to disciplinary action, potentially resulting in license revocation, suspension, or restrictions for existing licensees. Applicants may face denial or issuance of a restricted license, accompanied by fines.
Reportable changes should be submitted using the Background Change Disclosure Form and Instructions available on the CDI website or the National Insurance Producer Registry (NIPR) warehouse for Reporting of Actions.
As a recommended practice, insurance companies are advised to conduct periodic background checks or ongoing monitoring of their agents and licensees. Regular searches for criminal, civil, sanctions, and professional license or designation issues are crucial to promptly identify and report any concerns.
BIG clients with questions about this bulletin related to their background screening program, or would like more information on our ongoing criminal monitoring service, should contact their account management team for support. Questions may also be directed to the CDI's Licensing Background Bureau at (916) 492-3650.
Source: California Department of Insurance Bulletin
Posted: March 8, 2024
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