(a) An agent or broker who, before placing an insurance application with an insurer, reasonably suspects or knows that a fraudulent application is being made shall, within 60 days after the determination by the agent or broker that the application appears to be fraudulent, submit to the Fraud Division, using the electronic form within Fraud Division’s Consumer Fraud Reporting Portal, the information requested by the form and any additional information relative to the factual circumstances of the application and the alleged material misrepresentations contained in the application. All data fields within the Fraud Division’s Consumer Fraud Reporting Portal electronic form shall be completed accurately, to the best of the agent or broker’s ability. An agent or broker shall not submit a fraud referral anonymously. The Fraud Division shall review each report and undertake further investigation it deems necessary and proper to determine the validity of the allegations.

(b) An agent or broker who, after an insurance application has been placed with an insurer, reasonably suspects or knows that fraud has been perpetrated shall report that information directly to the insurer’s special investigative unit. An agent or broker shall furnish all papers, documents, reports, or other facts or evidence to the insurer’s special investigative unit upon request, and shall otherwise assist and cooperate with the insurer’s special investigative unit.

Terms Used In California Insurance Code 1872.41

  • Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
  • Fraud: Intentional deception resulting in injury to another.
  • Insurer: includes the California FAIR Plan. See California Insurance Code 1875
  • Person: means any person, association, organization, partnership, business trust, limited liability company, or corporation. See California Insurance Code 19

(c) An agent or broker shall furnish all papers, documents, reports, or other facts or evidence to the department upon request, and shall otherwise assist and cooperate with the department.

(d) (1) For purposes of this section, an “agent or broker” is a natural person licensed to transact insurance in a capacity described in Section 1625, 1625.5, 1625.55, 1626, or 1758.1 and is not the employee of an insurer.

(2) An agent or broker is not considered a “contracted entity” or “integral antifraud personnel” pursuant to Section 2698.30 of Title 10 of the California Code of Regulations.

(Amended by Stats. 2023, Ch. 204, Sec. 12. (AB 1140) Effective January 1, 2024.)

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