California does several things no other big state does: it elects its Insurance Commissioner, sets the producer passing score at 60%, regulates rates under Proposition 103, and is a pure at-fault (tort) auto state with no No-Fault PIP. This guide walks through the California Insurance Code (CIC) and the Title 10 regulations (10 CCR) in plain English so the California-specific questions feel routine. California leans state-heavy, so give this section real study time.

The regulator: an elected Commissioner

California insurance is regulated by the California Department of Insurance (CDI), led by the Insurance Commissioner. California's standout fact: the Commissioner is elected by voters (CIC § 12900), not appointed. The Commissioner licenses companies and producers, approves rates and forms, runs the Fraud Division, and enforces the consumer-protection laws below.

Vocabulary the exam assumes:

• Certificate of Authority – the company's license; a producer holds a license.
• California license types are named (Life-Only Agent, Accident & Health Agent, Property Broker-Agent, Casualty Broker-Agent, Personal Lines Broker-Agent), and Property and Casualty are separate licenses/exams that can be taken together as a combined 150-item sitting.
• Admitted vs. non-admitted (surplus lines) – admitted insurers are CDI-licensed and CIGA/CLHIGA-backed; surplus lines are not.

Producer licensing

Licensing rules live in the California Insurance Code (around CIC §§ 1626 and following). Exams are administered by PSI Services, and California's distinctive passing score is 60% for all producer license exams (70% applies only to adjuster, public adjuster, bail, and analyst exams).

To get licensed you generally:

• Complete the required 12-hour Ethics and California Insurance Code course (including 1 hour of insurance fraud) before issuance, plus any line-specific prelicensing.
• Pass the PSI exam (60%).
• Submit fingerprints for a background check (California does fingerprint applicants).

License term & renewal. Producer licenses run on a two-year cycle and renew biennially.

Continuing education. California requires 24 hours of CE every two years, including 3 hours of ethics (CIC §§ 1749.3, 1749.33). Selling annuities requires an 8-hour initial + 4-hour biennial annuity training (§ 1749.8), and selling long-term care requires LTC-specific training—extra requirements worth remembering.

Nonresident & reciprocity. California follows NAIC standards, so a producer in good standing in their home state can obtain a California nonresident license reciprocally.

Appointments and termination

• An insurer files an appointment (CIC §§ 1704 et seq.) to authorize a producer to act on its behalf.
• When the relationship ends, the appointment is cancelled/terminated (§ 1708) and reported to CDI, with the reason if for cause. The window to remember is within 30 days.

Unfair practices, claims handling, and fraud

California's prohibited-practice statute is the Unfair Practices Act (CIC §§ 790–790.15), the state analog of the model unfair-trade-practices law. Only the Commissioner enforces it. Prohibited acts include:

• Misrepresentation and false advertising.
• Twisting – misrepresentation to induce a policy switch.
• Rebating – giving unstated value to induce a sale. Treat as prohibited.
• Defamation, boycott, coercion, intimidation.
• Unfair discrimination between insureds of the same class and hazard.
• Unfair claims settlement practices.

Claims handling is governed in detail by the Fair Claims Settlement Practices Regulations (10 CCR § 2695 et seq.). Memorize the core timelines: the insurer must acknowledge a claim within about 15 calendar days, accept or deny within about 40 days after receiving proof of claim, and pay an accepted claim within about 30 days of settlement.

Insurance fraud is addressed in CIC § 1871 et seq., and signing a false/fraudulent claim can constitute perjury. The federal prohibition (18 U.S.C. §§ 1033–1034) appears on the national side.

Privacy runs through the Insurance Information and Privacy Protection Act (CIC §§ 791–791.26) plus the California Financial Information Privacy Act (Financial Code §§ 4050–4060).

Proposition 103 rate regulation (a signature California topic)

Under Proposition 103 (CIC § 1861.01 et seq.), most property/casualty rates must be approved by the Commissioner before use ("prior approval"), and rates may not be excessive, inadequate, or unfairly discriminatory. The law also created an intervenor process that lets consumer advocates challenge proposed rates. This prior-approval environment is unique to California and shapes everything from auto to the FAIR Plan/wildfire situation—expect at least one Prop 103 question.

Replacement and senior protections

When replacing life insurance or an annuity (CIC §§ 10509 et seq.), the producer must disclose the replacement, deliver required notices, and give the existing insurer a chance to conserve. California adds strong senior protections: buyers age 60 and older generally get a 30-day free look on life and annuity contracts (CIC §§ 10127.9–10127.10), versus the standard 10-day period, and there are extra disclosure and solicitation rules for seniors (§§ 785–789.10).

Guaranty associations

If an admitted insurer fails, California's guaranty associations pay covered claims (funded by assessments on other licensed insurers):

• CIGA – California Insurance Guarantee Association (property/casualty), CIC § 1063 et seq.
• CLHIGA – California Life & Health Insurance Guarantee Association, CIC § 1067 et seq.

Surplus lines/non-admitted carriers are not covered, and advertising guaranty-fund coverage to sell is prohibited.

California auto: a tort state with rising minimums

California is a tort (at-fault) state—no No-Fault, no mandatory PIP (contrast Florida and New York). Financial responsibility is set by the Vehicle Code (§ 16000 et seq.). The minimum liability limits were raised by SB 1107 (the "Protect California Drivers Act"):

• 30/60/15 ($30k bodily injury per person, $60k per accident, $15k property damage) for policies issued or renewed on or after 1/1/2025 (up from the old 15/30/5).
• A further increase to 50/100/25 is scheduled for 1/1/2035.
• Uninsured/underinsured motorist minimums rise to match.

Residual markets, earthquake, and workers' comp

• California FAIR Plan (CIC § 10090 et seq.) – the basic property/fire insurer of last resort, central to the state's wildfire market.
• CAARP – California Automobile Assigned Risk Plan (§ 11620 et seq.) and the California Low Cost Automobile (CLCA) program (§ 11629.7 et seq.) for income-eligible drivers.
• California Earthquake Authority (CEA, § 10089 et seq.) – residential property insurers must offer earthquake coverage (at least every other renewal) (§§ 10081, 10083, 10086).
• Workers' compensation (Labor Code Division 4, § 3200 et seq.) is mandatory and the exclusive remedy; the State Compensation Insurance Fund (SCIF) is a competitive carrier and insurer of last resort.

Key state numbers to memorize

Common exam traps

• Writing "70% to pass." California producer exams pass at 60%.
• Saying the Commissioner is appointed. California elects its Commissioner.
• Treating California as No-Fault/PIP. It is a tort/at-fault state.
• Using old auto minimums (15/30/5). Current minimums are 30/60/15.
• Defaulting to a 10-day free look for seniors. Buyers 60+ get 30 days.
• Forgetting Prop 103. Rates need prior approval and can't be excessive/inadequate/unfairly discriminatory.
• Ignoring the earthquake offer requirement on residential property.

Quick recap

California's elected Insurance Commissioner runs CDI; producers test through PSI at a 60% pass mark, complete a 12-hour ethics/Code course before licensing, are fingerprinted, hold a two-year license, and complete 24 CE hours (3 ethics) plus annuity/LTC training where applicable. The Unfair Practices Act (§§ 790–790.15) and the Fair Claims Settlement Practices Regulations (10 CCR § 2695) govern conduct and claim timelines, while Proposition 103 makes California a prior-approval rate state. Auto is tort-based with new 30/60/15 minimums, seniors get a 30-day free look, residential insurers must offer earthquake coverage, and CIGA/CLHIGA back insolvent admitted insurers. Learn the California exceptions—elected Commissioner, 60%, Prop 103, tort auto, 30-day senior free look—and the state section becomes straightforward.