State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
An unlicensed person solicits life insurance for a licensed insurer and is paid a commission. Under California Insurance Code Sections 1631 and 1633, the likely consequence is that:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Transacting insurance — soliciting, negotiating, executing, or servicing — requires a license under CIC Section 1631. Section 1633 authorizes the Commissioner to impose penalties on persons who violate the licensing provisions, including unlicensed solicitation. The insurer that uses an unlicensed solicitor is also exposed because it transacted business through someone not authorized. Unlicensed activity can also support license denial or administrative action.
Why the other options are wrong
- B) A license is required for anyone transacting insurance, not just the insurer; the producer must be licensed.
- C) Insurer approval cannot cure the absence of a license; the statutory license requirement cannot be waived by contract.
- D) Violations do not await a warning; penalties and administrative action can be imposed directly.
Memory hook
No license, no solicitation. The insurer cannot rubber-stamp around Section 1631.