An unlicensed person solicits life insurance applications for several weeks before obtaining a license. Under Sections 1631 and 1633, this conduct makes the person:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Section 1631 requires a valid license from the commissioner to solicit, negotiate, or effect contracts of insurance, and it expressly states that an insurer's certificate of authority does not exempt anyone from this requirement. Section 1633 provides that transacting insurance without a license is a misdemeanor punishable by a fine not exceeding $50,000, county jail time not exceeding one year, or both. The penalty applies regardless of how many applications were written, and the insurer's licensed status does not legalize the unlicensed person's solicitation.
Why the other options are wrong
- B) There is no per-application civil fine of $500; the statutory punishment under Section 1633 is a misdemeanor with a fine up to $50,000 and jail time up to one year.
- C) Unlicensed transacting is classified as a misdemeanor, not a felony, under Section 1633; it does not carry a five-year state prison sentence.
- D) Section 1631 explicitly states that the issuance of a certificate of authority to an insurer does not exempt anyone from the licensing requirement.
Memory hook
Soliciting without a license = misdemeanor: $50,000 fine, one year in jail, or both. The insurer's license does not cover you.