California Department of Insurance
Encyclopedia
The California Department of Insurance (CDI), established in 1868, is the agency charged with overseeing the regulation of insurance
regulations, enforcing statute
s mandating consumer protections, educating consumers, and fostering the stability of insurance markets in the state of California
. The CDI has authority over how the insurance industry conducts business within California, and licenses and regulates the rates and practices of insurance companies, agents, and brokers in the state.
CDI has over 1,300 employees charged with the responsibility of protecting consumer
interests. Its budget is primarily derived from funds generated by licensing and other fees, premium taxes, and Proposition 103 recoupment fees. The CDI licenses over 1,500 insurance companies and more than 340,000 insurance agents and insurance broker
s. The current California Insurance Commissioner
is Dave Jones
.
transformed the CDI into a law enforcement agency when it passed new anti-fraud
insurance legislation. The legislation provided sworn peace officers to investigate and arrest those who commit fraud.
, automobile insurance, life insurance
and other types of casualty
coverages, including a requirement that the property and casualty insurance premium rates must be pre-approved by the Department. Proposition 103 also changed the status of the California Insurance Commissioner
to that of an elected official, from being a Governor-appointed position. Proposition 103 also expanded the Department's important role in consumer affairs.
In 2001, the CDI implemented and began overseeing the Slavery Era Insurance Registry, as per new legislation requirements signed into law in 2000. The registry was created to require insurance companies to disclose any historical data regarding slavery
insurance policies they might have from the early days of California for the purposes of historical research, genealogy, and to preserve any evidence which might be material to reparations
claims.
(CIC) requires that the CDI provides licensing examinations for brokers and agents, and that the department must investigate suspected violations of the CIC by businesses and individuals who possess CDI licenses. The CDI also oversees the licensing of bail bond agents
.
, in order to protect the public from loss and distress. Claimant, agent, and insurance company fraud is investigated and prosecuted by the agency. The agency maintains criminal investigators in many parts of the state.
s, business and community fairs, and professional association events.
Insurance
In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the...
regulations, enforcing statute
Statute
A statute is a formal written enactment of a legislative authority that governs a state, city, or county. Typically, statutes command or prohibit something, or declare policy. The word is often used to distinguish law made by legislative bodies from case law, decided by courts, and regulations...
s mandating consumer protections, educating consumers, and fostering the stability of insurance markets in the state of California
California
California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...
. The CDI has authority over how the insurance industry conducts business within California, and licenses and regulates the rates and practices of insurance companies, agents, and brokers in the state.
CDI has over 1,300 employees charged with the responsibility of protecting consumer
Consumer
Consumer is a broad label for any individuals or households that use goods generated within the economy. The concept of a consumer occurs in different contexts, so that the usage and significance of the term may vary.-Economics and marketing:...
interests. Its budget is primarily derived from funds generated by licensing and other fees, premium taxes, and Proposition 103 recoupment fees. The CDI licenses over 1,500 insurance companies and more than 340,000 insurance agents and insurance broker
Insurance broker
An insurance broker finds sources for contracts of insurance on behalf of their customers. The three largest insurance brokers in the world, by revenue, are Aon, Marsh & McLennan, and Willis Group Holdings.-Purpose of insurance brokers:...
s. The current California Insurance Commissioner
California Insurance Commissioner
California Insurance Commissioner is an elected executive office position in California. The officeholder is in charge of the California Department of Insurance.The current Insurance Commissioner is Democrat Dave Jones.- Duties :...
is Dave Jones
Dave Jones (politician)
David Evan "Dave" Jones is an American politician. He represented California's 9th assembly district December 2004 through 2011...
.
History
In the early 1900s, the California State LegislatureCalifornia State Legislature
The California State Legislature is the state legislature of the U.S. state of California. It is a bicameral body consisting of the lower house, the California State Assembly, with 80 members, and the upper house, the California State Senate, with 40 members...
transformed the CDI into a law enforcement agency when it passed new anti-fraud
Fraud
In criminal law, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation...
insurance legislation. The legislation provided sworn peace officers to investigate and arrest those who commit fraud.
Proposition 103 (1988)
On November 8, 1988, California voters passed Proposition 103, by a narrow margin (51%), on the promise of providing consumers with a 20% rate rollback. It also broadened the Department of Insurance's responsibility for enforcement to include property insuranceProperty insurance
Property insurance provides protection against most risks to property, such as fire, theft and some weather damage. This includes specialized forms of insurance such as fire insurance, flood insurance, earthquake insurance, home insurance or boiler insurance. Property is insured in two main...
, automobile insurance, life insurance
Life insurance
Life insurance is a contract between an insurance policy holder and an insurer, where the insurer promises to pay a designated beneficiary a sum of money upon the death of the insured person. Depending on the contract, other events such as terminal illness or critical illness may also trigger...
and other types of casualty
Casualty insurance
Casualty insurance, often equated to liability insurance, is used to describe an area of insurance not directly concerned with life insurance, health insurance, or property insurance. It is mainly used to describe the liability coverage of an individual or organization's for negligent acts or...
coverages, including a requirement that the property and casualty insurance premium rates must be pre-approved by the Department. Proposition 103 also changed the status of the California Insurance Commissioner
California Insurance Commissioner
California Insurance Commissioner is an elected executive office position in California. The officeholder is in charge of the California Department of Insurance.The current Insurance Commissioner is Democrat Dave Jones.- Duties :...
to that of an elected official, from being a Governor-appointed position. Proposition 103 also expanded the Department's important role in consumer affairs.
In 2001, the CDI implemented and began overseeing the Slavery Era Insurance Registry, as per new legislation requirements signed into law in 2000. The registry was created to require insurance companies to disclose any historical data regarding slavery
Slavery
Slavery is a system under which people are treated as property to be bought and sold, and are forced to work. Slaves can be held against their will from the time of their capture, purchase or birth, and deprived of the right to leave, to refuse to work, or to demand compensation...
insurance policies they might have from the early days of California for the purposes of historical research, genealogy, and to preserve any evidence which might be material to reparations
Reparations for slavery
Reparations for slavery is a proposal that some type of compensation should be provided to the descendants of enslaved people in the United States, in consideration of the coerced and uncompensated labor their ancestors performed over several centuries...
claims.
Consumer protection
The CDI helps consumers by regulating how insurance companies market and administer their policies, and is charged with the responsibility of ensuring that insurance business transacted in the state is conducted in an honest, open, and fair manner. The CDI has a Rate Regulation Branch, established under the provisions of Proposition 103, that is responsible for reviewing proposed personal auto and homeowners insurance rates to ensure that they are fair, reasonable, and adequate.Licensing
The California Insurance CodeCalifornia Insurance Code
The California Insurance Code are the codified California laws regarding insurance. The code not only covers requirements for home, auto, medical and business insurance policies, but also covers the licensing of bail bond agents, workers' compensation, motor club services, and other related...
(CIC) requires that the CDI provides licensing examinations for brokers and agents, and that the department must investigate suspected violations of the CIC by businesses and individuals who possess CDI licenses. The CDI also oversees the licensing of bail bond agents
Bail bondsman
A bail bond agent, or bondsman, is any person or corporation that will act as a surety and pledge money or property as bail for the appearance of persons accused in court...
.
Criminal investigation
The CDI is charged with responsibility for investigating and arresting those who commit insurance fraudInsurance fraud
Insurance fraud is any act committed with the intent to fraudulently obtain payment from an insurer.Insurance fraud has existed ever since the beginning of insurance as a commercial enterprise. Fraudulent claims account for a significant portion of all claims received by insurers, and cost billions...
, in order to protect the public from loss and distress. Claimant, agent, and insurance company fraud is investigated and prosecuted by the agency. The agency maintains criminal investigators in many parts of the state.
Consumer education
The CDI publishes brochures and maintains a website to help consumers become aware of their rights, and to aid them in making informed insurance decisions. As part of the department's mission to protect consumers, an Education and Outreach Program has been established to provide speakers who participate in public events such as town hall meetingTown hall meeting
A town hall meeting is an American English term given to an informal public meeting. Everybody in a town community is invited to attend, not always to voice their opinions, but to hear the responses from public figures and elected officials about shared subjects of interest. Attendees rarely voted...
s, business and community fairs, and professional association events.
External links
- Insurance.ca.gov - California Department of Insurance website