Which of the following is a ground on which the California Commissioner may refuse to issue, suspend, or revoke an insurance license?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
The Commissioner may refuse to issue, or may suspend or revoke, a license when the applicant or licensee makes a material misstatement or misrepresentation in the application, engages in dishonest or fraudulent practices, violates the Insurance Code, or is convicted of certain crimes. A material misstatement in a license application undermines the qualifications the applicant claims, so it is a direct statutory ground for denial or discipline. Discounting to friends, skipping a first-year CE course, or declining commissions are not, by themselves, statutory grounds for license action.
Why the other options are wrong
- B) Giving discounts to friends and family may raise unfair-discrimination issues under rating rules, but it is not itself a specified licensing ground.
- C) CE is required before renewal of the license, not in the first year; failing to complete renewal CE could trigger discipline, but the scenario as stated is not a ground.
- D) Declining a commission is a voluntary business choice and is not grounds for license discipline.
Memory hook
Honesty in the application is the price of the license. Misstate it and the Commissioner can take it back.