This decision upholds three Insurance Commissioner regulations issued under the Unfair Insurance Practices Act. First, 10 CCR 2695.1(a) provides that an insurer violates 790.3 and particularly 790.03(h) if it either “knowingly committed [a violation] on a single occasion,” or “performed [violations] with such frequency as to indicate a general business practice.” The decision holds that the knowingly-committed-on-a-single-occasion test is supported by Royal Globe Ins. Co. v. Superior Court (1979) 23 Cal.3d. 880, 891, which was not overruled by either Moradi-Shalal v. Fireman’s Fund Ins. Companies (1988) 46 Cal.3d 287 or Zhang v. Superior Court (2013) 57 Cal.4th 364 on this point. Also, the decision holds that 10 CCR 2695.2(l) which states “‘[k]nowingly committed’ means performed with actual, implied or constructive knowledge, including, but not limited to, that which is implied by operation of law” is a reasonable interpretation of the UIPA and therefore is enforceable. The same is true of 10 CCR Reg. 2695.2(y) which states: “‘Willful’ or ‘Willfully’ when applied to the intent with which an act is done or omitted means simply a purpose or willingness to commit the act, or make the omission referred to in the California Insurance Code or this subchapter. It does not require any intent to violate the law, or to injure another, or to acquire any advantage.”
California Court of Appeal, Fourth District, Division 3 (Goethals, J.); September 20, 2018; 27 Cal. App. 5th 391