The California Department of Insurance has released a Cease and Desist Notice effective immediately for New Jersey based company, Forever Home Service LLC. The Cease and Desist Notice list several acts and omissions that the company is charged with. According to the Cease and Desist Notice, Forever Homes sold home warranties in California with no written contract, knowing that the buyer's agent did not have an established business in the state of California, or that the agent was not registered with the Department. Further, Forever Homes repeatedly violated the appropriate home warranties laws in California by failing to disclose material information and failure to disclose representations of material facts. The Department also issued the Cease and Desist Notice because it was aware that the company's business was currently undergoing a substantial amount of financial distress and because the company's business plan and product were both misleading and dangerous for the health and safety of homeowners in California.
The United States Federal Energy Administration (EPA) and the United States Federal National Association of Home Builders (NAHB) are jointly responsible for the creation of The National Registry of Customer Trustee Agencies or NAR. NAR provides consumers with a consistent, reliable source for ensuring that licensed homebuilders and others selling homeowner warranties meet the applicable standards. In the last decade, the United States regulatory agencies have become increasingly aware of the challenges posed by the rapidly changing, complicated, and rapidly growing home mortgage market. In response to this growing crisis, the United States Federal Trade Commission (FTC) and the California State Attorney General have worked diligently to strengthen the regulatory framework for California's home insurance industry. This work has been made possible through the many joint collaborative efforts between the FTC and the California Department of Insurance.
As part of these efforts, the California department has developed its own Consumer Protection Division, which oversees all matters relating to the state's insurance market. Among its many core functions, the Consumer Protection Division is charged with protecting the interest of the California consumer. The Division enforces California laws against misleading advertising practices, and work to ensure that all consumers are provided with the protection that they deserve. In addition, the state departments seek to protect the interests of policyholders by ensuring that all insurance companies take reasonable steps to provide adequate insurance protection and service to policyholders. The Department also seeks to ensure that consumers are provided with the opportunity to obtain the most beneficial insurance deals possible.
The responsibilities and authority of the Consumer Protection Division are defined in both the Insurance Code Section 566 and the rules and regulations imposed by the division. Both of these descriptions are found in Part 4 of the California Code on Professional License Companies. For purposes of this article, the term "professional" is defined as those persons engaged in the business of offering insurance, investment banking, and related professions who perform under the supervision of licensed brokers and agents. The term "rogue" is defined as any individual not licensed to do business in the United States.
One of the more interesting definitions found in the California Department of Insurance's regulatory codes is "a self-employed contractor with an office located in the state." According to this description, an insurance commissioner has wide latitude in creating regulations and rules that apply to self-employed contractors. For example, the commissioner may require that contractors paying workers compensation must carry appropriate insurance coverage but may not mandate that they have to carry specific types of insurance coverage. In contrast, the same description covers law firms that engage in law practicing. Law firms must have appropriate credentials and meet State requirements before they can practice law in California.
It is important to note that the word "lie" is found in the Department of Insurance's regulatory dictionary. The meaning of this word is "adhere to an untrue belief; to trick or conceal the truth." An insurance commissioner has wide latitude in deciding what constitutes a lie, and he or she is required to adhere to the California rules regarding lying and falsity. For example, it is not a lie for a non-practicing attorney to say that he practices law in California when he actually does not practice law in California. However, a law firm may be required to tell clients that it does practice law in California when it does not because it violated a rule.
Another interesting classification is "insurance departmental worker," which describes people working at the California Department of Insurance. According to the California Department of Insurance's site, these employees have the same rights and benefits as other employees at the State Department. They have the same rights under the Fair Employer Practices Act (FPA) as other employees. The only difference between this classification and other employees is that they are not allowed to engage in advertising that attacks or prejudices the interests of prospective clients. According to the Department of Insurance's site, it is the insurance commissioner's responsibility to define these rules for the purposes of fair employment practices.
There are two major classes available to California Department of Insurance candidates as far as their description of duties is concerned. The first is a broker-professional agent package. The second is a "sole proprietor" package that allows any person to become an independent agent for the state. Candidates who want to know more about the different options should visit the state's Department of Insurance's website for complete details.