State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
An unlicensed assistant at an agency discusses coverage limits, rates, and terms with a prospective customer to persuade the customer to apply. Under California Insurance Code Section 35, this activity is:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Section 35 defines transacting insurance to include solicitation, negotiations preliminary to execution, execution of the contract, and transaction of matters subsequent to execution. Discussing coverage and rates to induce an application is negotiation preliminary to execution, which squarely falls within the definition. Because the assistant lacks a license, this activity violates Section 1631, which requires a license to act in any of these capacities.
Why the other options are wrong
- B) The definition covers the entire process from solicitation through servicing; executing the policy is only one element.
- C) Collecting premiums is itself transacting, but so is negotiating; the assistant's conduct is prohibited regardless of premium handling.
- D) The statutory definition governs, not merely the insurer's internal policies.
Memory hook
Negotiating the deal is transacting. Talk terms without a license and you are already breaking the rules.