State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
Under California Insurance Code Section 1633, a person who transacts insurance without a valid license:
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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 to solicit, negotiate, or effect insurance contracts, and Section 1633 provides the penalty: transacting without a license is a misdemeanor punishable by a fine not exceeding $50,000, imprisonment in county jail not exceeding one year, or both. Even an insurer's certificate of authority does not exempt its personnel from licensing. This is why unlicensed sales activity is a serious compliance matter.
Why the other options are wrong
- B) The penalty is criminal (misdemeanor), not a mere civil fine imposed by the insurer.
- C) Issuance of a policy does not cure the violation; the unlicensed act itself is punishable.
- D) There is no retroactive approval mechanism; the license must exist before the act.
Memory hook
No license, no transacting. Do it anyway: up to $50k fine, a year in jail, or both.