Are You In Compliance? How to Report Changes in Your Background Information

Here’s what you need to know about the CA Insurance Commissioner’s new notice on reporting changes in your background information.
are you in compliance
7 Mar 2022

Are You In Compliance? How to Report Changes in Your Background Information

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Is your background information up to date? Recently, California Insurance Commissioner Ricardo Lara issued a reminder to insurance professionals around disclosure of background details. If you glossed over these requirements in the past, don’t! The consequences of non-compliance are high, starting with revocation of your license and monetary penalties! 

Find out if this notice applies to you and learn what you need to do to remain compliant.

What’s changed?

Well, nothing has changed, per se. This notice from the California Insurance Commissioner is just a reminder of existing requirements. The real question is what’s changed with you?

CA’s insurance code requires licensed insurers and license applicants to report any changes in their background information to the California Department of Insurance (CDI). So if you hold a license or are in the process of getting a license from the CA Department of Insurance’s Producer Licensing Bureau, these rules apply to you. 

Background information is a pretty vague term. What are they looking for, exactly? In this case, the requirement to disclose background information is primarily focused on your criminal background.

For instance, you already know to come clean on fraud, misrepresentation or conversion of funds, or breach of your fiduciary duty. But California also requires you to report certain events that occur outside of your workplace. And this makes sense because customers deserve to know the true character of the insurance professionals they’re working with.

All felonies and misdemeanors count as changes in your background information. And whether or not you were convicted or just charged doesn’t matter. So if you receive a DUI or you’re convicted for driving on a suspended license, the California Department of Insurance wants to know.

If you’re a licensee involved in a bankruptcy, pay close attention. Discharging responsibilities concerning insurance premiums in bankruptcy proceedings counts as a change in your background information. And it doesn’t matter if your bankruptcy is personal or professional.

What should you do?

If any of these situations apply to you, follow these steps to disclose your background information.

Step #1: Take responsibility

Admitting our mistakes is never easy. But taking responsibility early often pays off in the long run. The CDI requires you to report any change in background information within 30 days. And that 30 days start from the first day you learn about the change. 

Here’s where you need to pay attention, because failure to report within the specified time results in penalization. And feigning ignorance won’t help you here! Knowing what and when to report is your responsibility.

Step #2: Gather your documents

To get started, gather all your documents together. If your case involved court proceedings, submit all relevant documents related to that case. You might have quite a bit to share, because you need to include everything from the initial charging documents to the sentence imposed.

The CDI will also need administrative or disciplinary documents.

Everyone reporting a background change also needs to provide a statement describing the change. The statement give you the opportunity to provide a relevant personal narrative to describe the situation.

Step #2: Report the change

Reporting the change in your background information is easy. You can report by mail or electronically.

  • Reporting by mail? You’ll find the disclosure form and mailing instructions here!
  • Reporting electronically has a few more steps. First, head to the National Insurance Producer Registry’s website. Then, click on the “Attachment Warehouse” and again on “Reporting of Actions.” You’ll submit the required documents from that webpage.

So don’t procrastinate! Make sure you comply with California’s new reporting requirements right away. For questions, concerns or additional information, connect with us today.

 

image credit: shutterstock/EtiAmmos