Under California law, an insurance agent is required to:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Section 10508 of the California Insurance Code requires insurance agents to keep a record of the insurance they transact and to make those records available for inspection by the Insurance Commissioner. The record-keeping requirement enables the Department of Insurance to verify that agents are complying with the Insurance Code and to investigate consumer complaints and market-conduct issues. The records are the agent's transaction records, policies written, premiums handled, and related business, not client medical files, which belong to medical providers and are protected by privacy law. Individual policies themselves are not filed with the Department; instead, the agent must be able to produce transaction records when the Commissioner requests them.
Why the other options are wrong
- B) Individual policies are not submitted to the Department of Insurance. The agent maintains transaction records at the agency's place of business, and those records must be made available for inspection by the Commissioner when requested.
- C) Client medical records belong to the client's medical providers and are protected by strict privacy laws; they are not part of the agent's transaction records. The agent's duty under Section 10508 covers records of the insurance transactions the agent conducts.
- D) Agents do not publish annual financial statements for clients. Any obligation to prepare and file financial statements rests on insurers, not on agents, whose duty is to keep transaction records available for the Commissioner's inspection.
Memory hook
Keep the transaction books; the Commissioner may look anytime.