Section 2591.1 - Scope and Purpose(a) This article applies to those provisions of the California Insurance Code that allow the commissioner discretion in pursuing a penalty against an insurer or in setting the penalty amount. The Department shall apply the criteria provided in Section 2591.3 of this article to determine whether a particular violation warrants an enforcement action and to determine the amount of penalty within the applicable statutory range of penalties. The provisions of this article are appropriate for determining the penalty imposed in those cases which are resolved through settlement.(b) Enforcement action. (1) For purposes of this article, enforcement action means any action based on an allegation by the Department that an insurer has committed a violation to which a penalty provision set forth in any of the statutes listed in subdivision (c) below applies, over the course of which action one or both of the following is to occur: (A) The execution of a Stipulation and Consent Order or other settlement document.(B) The issuance of a Notice of Noncompliance, Order to Show Cause, Accusation, Statement of Issues, or other legal pleading.(2) For purposes of this article, regulatory activity such as warning letters, verbal warnings, market conduct examinations or market conduct examination reports does not constitute an enforcement action.(c) This article applies to any insurer subject to penalty under any of the following statutes: Insurance Code sections 704.7, 769.86, 789.3, 790.035, 790.036, 790.07, 1858.07, 1858.1, 1858.3, 1859.1, 1861.14, 10140.1, 10140.5, 10149.1, 10199.7, 10234.3, 10509.9, 11756, and 12414.25.(d) The provisions of this article are not intended to be consulted by a hearing officer, judge or trier of fact in connection with an action brought by the Department. The provisions of this article are not intended to be used in determining an appropriate settlement in connection with a settlement conference ordered pursuant to any applicable rule of court or provision of the Administrative Procedure Act. To the extent that the provisions of this article conflict with the provisions of any statute or other regulation that more specifically addresses a particular violation, this article shall be inapplicable.Cal. Code Regs. Tit. 10, § 2591.1
1. New section filed 12-15-2003; operative 1-14-2004 (Register 2003, No. 51). Note: Authority cited: Sections 790.10 and 12921.1, Insurance Code; CalFarm Insurance Company v. Deukmejian, 48 Cal.3d 805 (1989); and 20th Century Insurance Company v. Garamendi, 8 Cal. 4th 216 (1994). Reference: Sections 704.7, 769.86, 789.3, 790.035, 790.036, 790.07, 790.10, 1858.07, 1858.1, 1858.3, 1859.1, 1861.14, 10140.1, 10140.5, 10149.1, 10199.7, 10234.3, 10509.9, 11756, 12414.25 and 12921.1, Insurance Code.
1. New section filed 12-15-2003; operative 1-14-2004 (Register 2003, No. 51).