Agents & Brokers Overview / Licensing Background Section

Licensing Background Section

The Licensing Background Section (LBS) completes background checks on all insurance applicants and licensees. Background checks are based on the results of the applicants’ fingerprint submission which include the receipt and review of criminal offender record information (CORI) from the California Department of Justice (DOJ) and the Federal Bureau of Investigation (FBI). In addition to the fingerprint results, LBS also reviews the National Association of Insurance Commissioner's (NAIC) Regulatory Information Retrieval System (RIRS), and State Producer Licensing Data Base (SPLD), for any disciplinary actions.

Expediting Application Review
Updates on Application Status
Continued Background Checks on Licensees
Background Issues to Disclose
Background Issues and the Impact on Licensure
Probationary or Restricted License
Disciplinary Actions Initiated by The Department
Requesting Reconsideration of a Disciplinary Action
Contacting the Licensing Background Section

Expediting Application Review

It is important to answer all background questions truthfully and provide all required background documentation at the time the applicant submits the application. *

The number one reason that an application may be denied is the applicant's failure to accurately disclose criminal convictions and/or disciplinary actions.

For criminal convictions, a signed statement detailing the incident/s that occurred, certified court documents, evidence of rehabilitation** (if acquired), and arrest report/incident narrative are required.
For disciplinary actions, a signed statement detailing the incident/s that occurred, and copies of the final orders are required.

Note: If the background documents are not submitted with the license application, documents can be submitted to LICBackgrounds@insurance.ca.gov.

* All applications, examinations, and fingerprints expire after one year from the date of submission.

** Evidence of rehabilitation can include counseling, gainful employment, completion of appropriate rehabilitation programs, letters from probation officers, evidence of completion of 12-step programs, certificates of rehabilitation, etc.

Updates on Application Status

Please wait 45 days after the application has been “Referred to Backgrounds” before contacting LBS for an application status update. For security and confidentiality reasons, if additional information is required LBS staff will only communicate with the applicant directly in writing, to the email address on record.

Calls or emails prior to the 45-day timeframe will not be returned.

Continued Background Checks on License Applications and Licensees

The Department receives subsequent CORI reports on criminal violations and disciplinary actions after licenses are issued. When licenses are renewed, licensees are required to disclose criminal violations and background changes that have not been previously reported to the Department.

California Insurance Code section 1729.2 states license applicants and licensees have an ongoing duty to report any background changes to the Department. Subdivision (d) states the notification must be in writing and is required to be submitted to the Department within 30 days of the date the license applicant or licensee learns of the change in background information. These background change disclosures are reviewed by LBS to determine if any disciplinary action against the applicant or license is warranted.

For criminal convictions, a signed statement detailing the incident/s that occurred, certified court documents, evidence of rehabilitation* (if acquired), and arrest report/incident narrative is required.
For disciplinary actions, a signed statement detailing the incident/s that occurred, and copies of the final orders are required.

*Evidence of rehabilitation can include counseling, gainful employment, completion of appropriate rehabilitation programs, letters from probation officers, evidence of completion of 12 step programs, certificates of rehabilitation, etc.

Background Issues to Disclose

Failure to disclose all or part of your background may be grounds for denial of an application or disciplinary action of a license. Applicants and licensees must timely provide accurate, complete and detailed background information regarding:

Any disciplinary action taken against a business or professional license.
Any criminal convictions or military offenses, except juvenile offenses occurring in juvenile court, regardless of how long ago they occurred. This includes driving under the influence (DUI), reckless driving, driving on a suspended license, petty theft, shoplifting, etc. These questions are included in the California Special Questions section of the NIPR application.
Any pending criminal charges (misdemeanor or felony) at the time you submit your application.
For license holders, any pending felony charges within 30 days of being charged.
Any conviction sealed, expunged or dismissed under California Penal Code section 1203.4, or a similar statute. A clearance of this type does not eliminate all possible adverse consequences or release a person from all "penalties and disabilities" resulting from the charges in the case.
Any pending or complete civil actions where the applicant or licensee is a subject.

A conviction includes, but is not limited to, having ever been found guilty by verdict of a judge or jury, having entered a plea of guilty or nolo contendere, having had any charge dismissed or plea withdrawn pursuant to California Penal Code section 1203.4, having been given probation, a suspended sentence, or a fine.

A failure to respond to any inquiry from the Department could result in disciplinary action under California Insurance Code section 1736.5, and could become a public matter reported to NAIC.

Background changes should be submitted electronically here. For more information and instructions on submitting a background change to the department, visit the Submitting a Background Change page.

Background Issues and the Impact on Licensure

The Department is unable to provide legal advice. All information related to an applicant or licensee’s background is considered such as the seriousness of the crime or disciplinary action, steps taken for rehabilitation, the relevance to the current role being held and age of the crime or action. Please review the following code sections for more details:

California Insurance Code section 1668 and California Insurance Code section 1669 are the most common Insurance Code sections relied upon in taking action against an applicant and licensee.
A felony conviction involving dishonesty or breach of trust, requires written consent under United States Code, title 18, section 1033 from the Commissioner before engaging in the business of insurance.
A crime or act that is substantially related to the qualifications, functions or duties of an insurance licensee pursuant to California Code of Regulations, title 10, sections 2183.2, 2183.3, and 2183.4.
The NAIC’s RIRS will be notified of any final action and the final Order will be published on the Department's website for 10 years, pursuant to California Insurance Code section 12969.

Probationary or Restricted License

In some cases, the Department may offer an applicant or licensee a restricted license under California Insurance Code section 1742 in lieu of denying the applicant because of the criminal conviction or in lieu of taking the applicant to hearing. The restricted license is a fully functioning license that will remain on a probationary status.

To request the removal of restrictions on a license, submit a written request to LICBackgrounds@insurance.ca.gov asking that the restrictions be removed.

Disciplinary Actions Initiated by the Department

If a right to a hearing is being afforded, formal legal notice will be sent by email at the email address of record in the form of a "Statement of Issues" or “Accusation” setting forth the grounds for denial or revocation of a license. Opportunity for a hearing may be given via a "Notice of Defense." The Office of Administrative Hearing's Website has information about the process and how you may represent yourself at hearing if you choose to do so.

In some cases, a "Special Notice of Defense" will be sent with the option to voluntarily consent to the issuance of a restricted license or fine, waiving your right to a hearing.

If no right to a hearing is being afforded (e.g., a case under California Insurance Code section 1669), formal legal notice will be sent by mail, at the mailing address of record, officially denying, revoking, or restricting the license in the form of a "Summary Order." The Summary Order of an application is usually effective immediately. The Summary Order of a license is usually effective in 30 days. The Department has summary authority to deny/revoke a license for five (5) years following a disciplinary action.

Requesting Reconsideration of a Disciplinary Action

Written request will be considered setting forth the reasons why reconsideration should be granted. The request should include any and all additional evidence to be reconsidered, and not just the same information previously provided. Request for Reconsideration may be sent to LICBackgrounds@insurance.ca.gov or mailed to the Department of Insurance, c/o Reconsiderations, 300 Capitol Mall, Suite 16700, Sacramento, CA 95814 or send by Fax to (916) 324-1883.