Penalties (CIC Sections 782, 786, 789.3, 1738.5, 10509.9)

The California Insurance Code Article 6.3 penalizes anyone violating annuity-related code provisions protecting seniors 65 or older.

Violations of CIC Article 6.3 include:

• Breaching the duty of honesty, good faith, and fair dealing.
• Failing to provide a 30-Day Free-Look period.
• Failing to provide written comparisons of existing coverage.
• Failing to disclose that direct response ads aimed at prospects 65 or older that an agent may contact the applicant, if that is the fact.
• Using deceptive or misleading advertising.
• Failing to provide Medi-Cal disclosures when selling life insurance and annuities.
• Selling annuities unsuitably to seniors seeking Medi-Cal eligibility.
• Selling disability insurance providing health benefits to a Medi-Cal beneficiary age 65 or older.
• Misrepresenting policy terms, benefits or privileges.
• Using advertisements without the written approval of the insurer.
• Using advertisements implying that the occupational or other status as members of the class entitles prospects to reduced rates on a group or other basis if policy advertised is sold on an individual basis at regular rates.
• Advertising events where insurance or annuities will be sold using the terms "seminar," "class," "informational meeting," without adding "and insurance sales presentation" immediately following those terms in the same type size and font.
• Inducing anyone to refuse a policy issued by one insurer, but instead selling a policy issued by another insurer.
• Inducing an insured to lapse, forfeit or surrender insurance.
• Using misleading comparisons induce an insured to lapse, forfeit, change or surrender his or her insurance.
• Failing to provide notice before meeting in a senior's home.
• Selling an annuity or life insurance policy at a senior's home in person or by telephone, by misrepresenting the contract.