(a) The commissioner may suspend the certificate of compliance of a holder thereof for not exceeding one year whenever he or she finds, after proper hearing following notice, that the person engages in any of the following practices:

(1) Conducting its business fraudulently.

Terms Used In California Insurance Code 742.37

  • Commissioner: means the Insurance Commissioner of this State. See California Insurance Code 20
  • Litigation: A case, controversy, or lawsuit. Participants (plaintiffs and defendants) in lawsuits are called litigants.
  • Person: means any person, association, organization, partnership, business trust, limited liability company, or corporation. See California Insurance Code 19

(2) Not carrying out its contracts in good faith.

(3) Habitually and as a matter of ordinary practice and custom compelling claimants under policies, or liability judgment creditors of the certificate of compliance holder, to either accept less than the amount due under the terms of its contracts or resort to litigation against the certificate of compliance holder to secure the payment of the amount due.

(b) The order of suspension shall prescribe the period of each suspension.

(c) Proceedings under this section shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, except that the hearings shall be conducted by administrative law judges chosen under Section 11502 or appointed by the commissioner.

(Added by Stats. 1994, Ch. 1082, Sec. 1. Effective January 1, 1995.)

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