Under California law, a person who solicits or negotiates contracts of insurance without a valid license is guilty of:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
CIC Section 1631 requires that no person solicit, negotiate, or effect contracts of insurance without holding a valid license, and CIC Section 1633 makes transacting insurance without a valid license a misdemeanor punishable by a fine not exceeding fifty thousand dollars, imprisonment in a county jail for up to one year, or both. The statute applies to anyone acting in a licensed capacity, and holding an insurer's certificate of authority does not exempt a person from the licensing requirement. This strong enforcement reflects California's policy of ensuring that only qualified persons deal with the public.
Why the other options are wrong
- B) Unlicensed transacting is a misdemeanor, not a felony; the stated punishment of five years in state prison is far beyond the statute.
- C) It is a criminal offense, not merely a civil infraction, and it carries real fines and possible jail time.
- D) There is no first-offense warning; the misdemeanor penalties apply from the first violation.
Memory hook
No license, no soliciting. That is a $50,000 misdemeanor with up to a year in the county jail.