California Insurance Code provides a broad definition of who may legally operate as an insurer. Under CIC §§19 and 150, the term “person” is used to define entities that may qualify as insurers. This definition is intentionally wide to cover the different forms of business organizations that might engage in the business of insurance. Specifically, an insurer may be:
An Individual – A single person who assumes the role of an insurer, though this is rare in modern practice.
A Partnership – Two or more individuals who join together to form a business entity that provides insurance.
An Association – A group of people or organizations united for a common purpose, such as a mutual insurer or fraternal benefit society.
A Corporation – The most common type of insurer, formed as a legal entity separate from its owners and regulated under California law.
This broad definition ensures that the law can adapt to the variety of organizational structures used in the insurance marketplace. Regardless of form, all insurers must comply with California’s licensing, financial, and regulatory requirements before conducting insurance business in the state.
In California, conducting insurance business without proper authorization is a serious violation of the Insurance Code. Unauthorized transactions occur when a person or entity acts as, or assists, a non-admitted insurer without holding the required license or authority. This includes soliciting, negotiating, or selling insurance on behalf of a company that is not licensed to operate in the state.
Under California Insurance Code §1760.1(f) and related provisions, such conduct is explicitly prohibited and carries significant penalties. Violators may face substantial monetary fines, possible license suspension or revocation, and even criminal liability in certain cases. In addition, individuals who knowingly place consumers with unauthorized insurers expose policyholders to serious risks, since non-admitted insurers are not backed by California’s guaranty fund.