Key Takeaways
- The California Department of Insurance (CDI) regulates all insurance activities in California under the California Insurance Code
- The Insurance Commissioner is elected by California voters to a 4-year term and has broad regulatory authority
- CDI handles licensing, enforcement, consumer complaints, rate review, and market conduct examinations
- The California Insurance Code is found in the California Insurance Code (CIC), not the Business and Professions Code
- California requires fingerprinting through Live Scan for all insurance license applicants
California Department of Insurance (CDI)
Important: This study guide covers California state-specific Life & Health insurance content only. You should complete the national Life & Health exam preparation first, as it covers the foundational insurance concepts tested on your exam.
The California Department of Insurance (CDI) is the state agency responsible for regulating the insurance industry in California. Unlike many state agencies headed by appointed officials, California's Insurance Commissioner is elected by voters.
The Insurance Commissioner
The Insurance Commissioner is:
- Elected by California voters to a 4-year term
- One of only 11 states where the commissioner is elected
- Responsible for enforcing the California Insurance Code
- Authorized to adopt regulations, investigate violations, and discipline licensees
Commissioner Powers and Duties
| Power | Description |
|---|---|
| Licensing | Issue, suspend, and revoke producer licenses |
| Rulemaking | Adopt regulations interpreting the Insurance Code |
| Enforcement | Investigate and prosecute violations |
| Rate Review | Approve or disapprove insurance rates (for some lines) |
| Consumer Protection | Handle complaints and protect policyholders |
| Market Conduct | Examine insurer business practices |
The California Insurance Code
California insurance law is found in the California Insurance Code (CIC), not the Business and Professions Code. The CIC contains:
- Licensing requirements for producers and insurers
- Policy standards and required provisions
- Consumer protections and disclosure requirements
- Prohibited practices and penalties
- Claims handling requirements
Exam Tip: Remember that the Insurance Commissioner is ELECTED in California (one of only 11 states). This is frequently tested.
CDI Organization
CDI operates through several divisions:
- Producer Licensing Bureau - Handles agent/broker licensing
- Rate Regulation Branch - Reviews insurance rates
- Market Conduct Branch - Examines insurer practices
- Fraud Division - Investigates insurance fraud
- Consumer Services Bureau - Handles consumer complaints
How is the California Insurance Commissioner selected?
Where is California insurance law primarily found?