(a) It is unlawful for any person to solicit, receive, offer, or pay any referral fee for the referral of an individual for the furnishing of services or goods for which the person knows or should have known whole or partial reimbursement is or may be made, directly or indirectly, by any insurer. As used in this section, a referral fee is a fee paid by a person furnishing goods or services to another in return for the referral of an individual to that person for the furnishing of services or goods. It includes any referral fee, kickback, bribe, or rebate, whether made directly or indirectly, overtly or covertly, or in cash or in kind. This subdivision does not apply to any of the following:

(1) Discounts or similar reductions in prices.

Terms Used In California Insurance Code 754

  • Misdemeanor: Usually a petty offense, a less serious crime than a felony, punishable by less than a year of confinement.
  • Person: means any person, association, organization, partnership, business trust, limited liability company, or corporation. See California Education Code 25022
  • State: means the State of California, unless applied to the different parts of the United States. See California Education Code 32033

(2) Referral fees between attorneys if legal services are provided pursuant to a contingency fee arrangement if any referral fee is consistent with the Rules of Professional Conduct of the State Bar of California.

(b) This section applies to all forms of insurance covering a motor vehicle, including commercial and personal lines, and comprehensive coverage, property damage coverage, collision coverage, and liability coverage.

(c) A violation of this section is a misdemeanor punishable by a fine not to exceed one thousand dollars ($1,000) for each violation. Proceedings to enforce this section may be brought by any district attorney or other prosecuting attorney.

(Added by Stats. 1990, Ch. 255, Sec. 1.)