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Category: Criminal Law
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CAn the CA deprtment of insurance, arrest me after they send

Resolved Question:

CAn the CA deprtment of insurance, arrest me after they send me a notice stating that a complaint that was filed by a client is justified? CIC 781 states missrepresentation of annuity or life ins policy
Submitted: 4 years ago.
Category: Criminal Law
Expert:  LawTalk replied 4 years ago.
Good morning,

I'm sorry of hear of your dilemma.

A violation of the Insurance Code in CA may subject you to civil damages, or administrative remedies by the Department of Insurance---but it will not result in you being arrested.

However, some violations of the IC may well also constitute violations of the CA Penal Code---and for those you are subject to arrest---but not by members of the CA Department of Insurance, but by law enforcement.

In all likelihood, if the customer is claiming that there was misrepresentation and nothing more, it would be unlikely to constitute fraud and therefore neither an arrest, nor being charged with a criminal violation, would be expected.

I wish you the best in 2012.

Because I help people here, like you, for a living---this is not a hobby for me, and I sincerely XXXXX XXXXX abiding by the honor system as regards XXXXX XXXXX I wish you and your family the best in your respective futures.

Would you be so kind as to Accept my Answer so that I may be compensated for assisting you? Bonuses for greatly informative and helpful answers are very much appreciated. Thanks Again,

Doug


Customer: replied 4 years ago.

Is this a violation of CA penal code?

 

DOI ltr states that in compliance with CA IN Code 12921.1 they find client complaint justified as defined in CA Code of regulations 2694

 

States that application for annuity statesd that no replacement was involved however cancellation of insurance had taken place.

 

Viloation of INs Code 10509.4, 781 and CA Code of Regulations 1694(a)(3).

 

The client cancelled insurance policy and repsoitrioned funds after she had received funds from first insurance company. 30-60 days later she decided to purchase an annuity withthose funds. Therefore application was noted as no replacement as I now understand that uit should have been marked as a replacement (6 months rule).

 

Expert:  LawTalk replied 4 years ago.
Good morning,

Based on your facts, I do not see any Penal Code Violation.

The CA Penal Code sets out the nature of what will be considered a crime in the state. This is quite different from regulation of businesses. Just as it is not a crime for a lawyer or a doctor to act negligently and malpractice a client----short of an intentional harm or fraudulent act which likely would fall under the Penal Code as well-----the violation of most of the Insurance Code regulations may result in a negligence claim or an action taken against the license of the licensee who is negligent and harms a client---rarely does this result in criminal charges being filed.

In your case you made a mistake based on a misunderstanding regarding what constituted a replacement policy of insurance---presumably you failed to issue the Notice of replacement policy required under the code and the client complained.

Unless the client can show facts convincing the prosecutor that you actually, with intent to defraud the client of assets, failed to disclose that the transaction was a replacement policy----and this seems unlikely----then there is no Penal Code violation involved.

I wish you well.

Because I help people here, like you, for a living---this is not a hobby for me, and I sincerely XXXXX XXXXX abiding by the honor system as regards XXXXX XXXXX I wish you and your family the best in your respective futures.

Would you be so kind as to Accept my Answer so that I may be compensated for assisting you? Bonuses for greatly informative and helpful answers are very much appreciated. Thanks Again,

Doug
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