California Life-Only & Accident and Health AgentCalifornia Law - GeneralMedium
The California Insurance Commissioner has the authority to conduct examinations of insurers and agents. Under what circumstances can the Commissioner examine the books and records of an insurance agent?
- AAt any time, as often as deemed necessary, to ascertain compliance with the Insurance Code.
- BOnce every five years as part of a routine audit schedule.
- COnly with a court order, unless the agent voluntarily consents.
- DOnly if a formal written complaint has been filed against the agent.
Show answer & explanationAnswer & explanation
Correct answer: A. At any time, as often as deemed necessary, to ascertain compliance with the Insurance Code.
California Insurance Code Section 12921 grants the Commissioner the power to examine the business and affairs of every person engaged in the business of insurance in California, at any time, as often as deemed necessary, to ascertain their compliance with the Insurance Code.
Why the other options are wrong
- B. While routine audits may occur, the power is not limited to a fixed schedule; it can be exercised more frequently if needed.
- C. The Commissioner has broad statutory authority and typically does not require a court order to examine licensees' records.
- D. While a complaint might trigger an examination, it is not the only circumstance under which the Commissioner can act.
Commissioner's Examination Authority
The California Insurance Commissioner has broad powers to examine the records and affairs of all insurance entities and licensees to ensure compliance with the Insurance Code.
- Authority granted by California Insurance Code.
- Can be exercised at any time, as often as necessary.
- Purpose is to ascertain compliance with the law.
Memory trick: The Commissioner's eye is always on the code, checking records on any road.