To: Whom it may concern Fr: Kevin Powell Re: The Ongoing Fraudulent Activities of the Criminal Enterprise

Deluxe Rent A Car My name is Kevin Powell. I am one of likely tens of thousands of victims of fraud perpetrated by John Hennessey and Deluxe Rent A Car. I believe that he is running a criminal operation which practices fraud in many different forms. I was first a victim of False Advertisement and Deceptive Trade Practices and lured into using this company where I was rented a vehicle, illegal to be driven in the state of California. Although there were a myriad of other problems with this car that werent illegal, this act led to me being stopped by the police causing unnecessary emotional trauma to my 3 and 5 year old daughters. My calls to the management went unanswered and when I refused to do pay for this and wrote I refuse to pay for this charge on the receipt I became a victim of Identity Theft and Forgery as they subsequently forged my name to receive payment. I filed a complaint at the LAPD and had a multiple problems initially with the detectives at the station but eventually I was transferred to the Commercial Crimes Division where Detective Tim Gipson took the case and witnessed firsthand the behavior of this company. They initially claimed it wasnt forged and faxed him a copy of the document. Upon demand of the document, to be examined by expert handwriting analysis this document disappeared and the Detective was given an ex-employee as a scapegoat. I recently was contacted by a former employee of Deluxe Rent A Car. Of this incident he replied: The reason i am with u on deluxe cuz they ripped off 100s of customer and the greedy owner will
never stop, so that's y i wanna stop him to rip off other people in the future. About that employee froged the paper n lost it is all bollshit, employees has nothing to deal with paper and contracts. its all there with managers and goes to corporate office.

During the investigation I notice the irregularity in the bill I overlooked with a ACRF fee. I did the investigation only to discover that this fee could only be charged to the 10 companies approved by LAWA. Deluxe is not one of them and had been pocketing the 11-27% they have illegally charged. That in mind based on public records of reciepts represents between $333,000 and $1.3 million / year in fraud and with a fleet of 450 cars the number of victims is staggering. This is fully documented at http://www.deluxerentacar.info Also documented is the time and effort spent uncovering and reporting the different ways deluxe attempted to manipulate receipts with name changing and other acts to cover their trail. This shows the intent of John Hennessy to continue his pattern of deceit and fraud. The employee confirms this by saying
I am honest and straight forward guy and i think working in deluxe for months was there a lot. When we sell insurance the ACRF goes high and on some contracts the ACRF was over 200$ and those poor international customer who came to Deluxe to get a cheaper and better deal the others which carrentals.com advertises would get ripped off in ACRF . I told the managers a few times about ACRF but even the general manager didn't do anything.

Deluxe Rent a Car eventually stopped its behavior because of the pressure exerted on them and my impending lawsuit. This didnt stop the deceptive and false advertisement where they now have a emailing campaign on how they a Special Agreement where they are no longer required to charge ACRF fees. LAWA confirms that this is a lie.

This former employee also sent me this.

check this out another fraud, u were talkin about ACRF , now this car license Fee is the same thing as ACRF but just the name is changed and this amount goes higher when international customer or customer who buys insurance, Gps or other stuff, cuz i think its over 25% . If u go to deluxerentacar.com and try to make reservation u will see it right now. plus do ur research on insurance requirement cuz the state of California do not requires insurance for rent a car but on deluxe web site it says it is required.

Rental Rate Coverage and Extra Charges

$ 109.41

Car License Fee

Sub Total Taxes and Fees SALES TAX CAL TOURISM FEE Free Mileage Total Charges

$ 27.18
$ 136.59 $ 13.32 $ 2.74 unlimited $ 152.65

THIS REPRESENTS : 16.34% fee added to the price of the rental very familiar to anyone reviewing the fraudulent nature of this company as it appears to be a replacement for the ACRF fee previously charged. I have attached the other company rate fee sheets from carrentals.com In all of the other companys rates, some have the ACRF fees, and some indicate the allowable $10 fee as codified under CALIFORNIA CIVIL CODE SECTION 1925-1936.5. However none of them have the 2009 New California Car License Fee. Now while there is such a fee that has been increased however
(1) Vehicle license fee has the same meaning as in Sections 10751 and 10752 of the Revenue and Taxation Code, as that fee existed on January 1, 2009. (2) Increased vehicle license fee means the amount of the fee increase in the vehicle license fee above 0.65 percent of the value of the vehicle. The increased vehicle license fee shall be separately charged, clearly stated, and prorated at one-three hundred sixty-fifth of the fee increase in the annual vehicle license fee actually paid on the particular vehicle being rented for each full or partial 24-hour rental day that the vehicle is rented. The total of all increased vehicle license fees charged to renters shall not exceed the fee increase in the annual vehicle license fee actually paid for the particular vehicle rented. (b) Notwithstanding subdivision (n) of Section 1936 or subdivision (b) of Section 1936.01, upon an increase of the vehicle license fee above 0.65 percent of the value of the vehicle pursuant to legislation enacted with the Budget Act of 2009, the following provisions shall apply with respect to the increased vehicle license fee: (1) A rental company shall only advertise a rental rate that includes the entire amount, except taxes, the increased vehicle license fee, a customer facility charge, if any, and a mileage charge, if any, that a renter must pay to hire or lease the vehicle for the period of time to which the rental rate applies. (2) When providing a quote, or imposing charges for a rental, the rental company may separately state the rental rate, taxes, the increased vehicle license fee, customer facility charge, if any, airport concession fee, if any, tourism commission assessment, if any, and a mileage charge, if any, that a renter must pay to hire or lease the vehicle for the period of time to which the rental rate applies. A rental company may not charge in addition to the rental rate, taxes, the increased vehicle license fee, a

customer facility charge, if any, airport concession fee, if any, tourism commission assessment, if any, and a mileage charge, if any, any fee that must be paid by the renter as a condition of hiring or leasing the vehicle, such as, but not limited to, required fuel or airport surcharges other than customer facility charges and airport concession fees.

Because of the presented info, I did research and discovered that there is no agency directly regulating the rental car companies. This is perhaps why the following fraud has occurred. Im pretty sure however that it should fall under 17200 statutes.

Governor Schwarzenegger John Hennessey has added insult to injury by using Governor Arnold Schwarzenegger and Californias fiscal crisis as the scapegoat and opportunity to once again defraud every customer it serves and then put those funds in his pocket. http://reservations.deluxerentacar.com/policies/los-angeles-airport/

I have documented a 13.375% fee thru carrentals.com and a 16.34% fraud on the www.deluxerentacar.com site. The law clearly states : vehicle license fee above 0.65 percent of the value of the vehicle. The increased vehicle license fee shall be separately charged, clearly stated, and prorated at one-three hundred sixty-fifth of the fee increase in the annual vehicle license fee actually paid
$1.7billionfromincreasingtheVehicleLicenseFee(VLF)from the current rate of 0.65 percentto1.15 percent,exceptforheavyvehicles.Revenuefromtheportionoftheincrease to1percentwillberetainedbytheGeneralFund($121millionin200809and$1.2billionin 200910)andrevenuefromtheadditionalincreaseof0.15percentwillbetransferredtoanew specialaccountdedicatedtofundinglocalpublicsafetyprograms($82millionin200809and $502millionin200910).TheVLFrateincreasewillbecomeeffectiveforregistrations beginningMay19,2009andexpireJune30,2013ifthevotersapprovetheproposedBudget Stabilizationconstitutionalamendment.Ifthevotersrejecttheamendment,therateincrease willexpiretwoyearssoonerJune30,2011.The0.15percentratecomponentdedicatedto localpublicsafetywouldendearlierifthefundsarespentforanyotherpurpose.Thebudget packagealsoincludesabillthatunbundlestheVLFtaxeschargedbythisincreasefromrental carrates.

This is a .5% difference on the fee that is a chargeable prorated charge to the customer.

2008 Chrysler 300 Rental From Deluxe

DMV indicates based on a $25,000 car this VLF would be $163.00 but the of the % 1.10 fee only .5% is legally chargeable. This would amount to $70 and then 1/365 of that or only 19c./day or $1.35/ week. This would explain why the other companies simply choose not to charge this. However with the ACRF Fraud removed Deluxe and John Hennessy have found yet another opportunity to create a fraudulent revenue stream that nobody would be likely to discover. This means only $1.35 is legal of the $31.71 Car License Fee Fraud Deluxe has overcharged this tax to every client by 2300% and committed Tax Fraud

Carrentals.com Unlike the first fraud which is a rental fee, this is a state tax and therefore enforceable under tax fraud statutes. Also do to the nature of this business and its relationship to carrentals.com I believe that the nature of the site does not allow negative post and I believe the reviews on the site are fraudulent. Carrentals.com, as the number one rental booking company in the world, should be aware of the advertisement posted and what the laws regarding the fees on its site and is responsible for enacting checks that prevent the manipulation of the numbers to create fraud Because it gets a portion of the revenue from this and other frauds that they should be investigated for collusion and conspiracy to defraud each and every customer carrentals.com sent to Deluxe. The fact that nobody else charges this fee should also be of note.

TheDeptofInsurance
requiresthat.thenamedapplicantistrustworthyandcompetentto actasitsinsuranceagent.Deluxelacksthatrequirementasindicatedbytheabovefrauds

AformeremployeewritesofJohnHennessey:
No buddy, the owner is so freakin greedy , he wont give u nothing, he give commission cuz as rental agent we sell insurances which I doubt he got any , but all the rental company pays commission and if u were honest person as u seem like it then i will stand with the truth. but there is no commission on ACRF , that money is straight in his pocket , its suppose to be for LAX but Mr. John loves to steal and that's why he has team of lawyers .

Ibelieveaninvestigationintotheethicalbehaviorofthiscompanyshouldbeofevaluatedanda subsequentreviewofitslicensingshouldbemadeapriority.Thisintentionalandsystematicdefrauding ofclientsfor2yearscoupled,followedbymultipleattemptstomask,renameandunnamedthefraud ratherthanjuststopitisaindicatorofthevaluesystematthiscompany.Followedbythecurrentscam justuncoveredthatonlywentintoeffectonlytwoweeksagoshouldbearedflagforthiscompanyand wouldbecauseforanauditoftheirinsurancefiles,policiesandsellingproceduresandultimatelythe removaloftherighttosellinsurance.Thisistheonlywaytoprotectconsumersfromapersonso focusedandcommittedtothedefraudingofconsumers.

TheNationalBBB Deluxes site www.deluxerentacar.com is currently, illegally using the BBB logo committing copyright infringement as it had its accreditation removed in March. Their BBB accreditation was removed after being presented the abundance of evidence of the deplorable and illegal behavior of this company and John Hennessey.

Further Investigation
Andrea wrote me and said IknewwhenIpulledupIshouldnotbethereandthatitwasashottyoperationbutIwasalready thereandhadplansimmediatelyfollowingsoIwentahead.Thefirstcarwouldnotevenstartandthe oneIrentedwasraggedy.Ithoughttheworstwasover,butitwasnot.YesterdayIsawtheyhad taken$172outofmyaccountandIcalledandtheysaidIhadaparkingticketfor$47dollarsandthey chargedmeanextra$125forpayingit.Ineverreceivedafineinpersonorthroughthemail. Initial research indicates that the accepted administrative fees charged may be between $25$100. With other states regulating it to between $25-50 this is an apparently known abuse. I don't know what the Ca. regulatory limits are but other states limit from $25 - $50. A charge of $125 appears abusive, but not out of character and if so, I'm sure the abuse is widespread and as it is predatory it is yet another 17200 violation. The Dept of Insurance has indicated that the Attorney General should be the correct direction.

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Pick-Ups and Drop-Offs double booking GPS/Satellite Navigation Units Age Requirements dont forget our couponds Insurance Policies and Surcharges Driving Area Restrictions Deposit Requirements Reservation Policies OTHER, Debit cards, and other local renters ADDITIONAL DRIVERS

AGE DEBIT CARDS EQUIPMENT EQUIPMENT INSURANCE LOCAL RENTERS OTHER PAYMENT RULES TRAVELING TO THE U.S.

Pick-Ups and Drop-Offs

After you collect your luggage, please exit the terminal and go to the middle island. Look for the red sign that reads "Hotels and Courtesy Shuttle." Please wait there for a white shuttle-van that reads (Johnnypark). The shuttle circles the airport every 15 minutes, and will bring you directly to the facility. No charge for pick-ups and drop-offs available at the airport and at airport hotels top of page

double booking
PLEASE DO NOT DOUBLE BOOK RESERVATIONS ON OTHER WEB SITES. THIS MAY CAUSE OUR SYSTEM TO CANCEL OUT ALL YOUR RESERVATIONS. ONCE YOU HAVE RECIEVED AN E MAIL CONFIRMATION YOU ARE ALL SET. top of page

GPS/Satellite Navigation Units

We now have GPS/Satellite Navigation units available to rent with your vehicle at $9.95 a day or $59.95 a week. top of page

Age Requirements dont forget our couponds

Age Requirements dont forget our couponds Minimum Age: 21 Age 21 to 24 - $20.00 per day surcharge applies. top of page

Insurance Policies and Surcharges

Please bring proof of insurance or purchase wavers at time of rental Minimum liability is required to drive in the State of California. A new California Car License fee law will go into effect in 2009 and will be an additional charge per day. This additional fee is part of the Governors new budget that was pass and made into law. It will appear on your bill as a separate charge. top of page

Driving Area Restrictions

Vehicles must stay in California, Arizona, and Nevada.( Las Vegas ) all OK top of page

http://reservations.deluxerentacar.com/policies/los-angeles-airport/

6/2/2009

Deluxe Rent-A-Car of LAX :: Rental Policies

Page 2 of 3

Deposit Requirements
Cash deposits are not accepted. Deluxe Rent A Car accepts the following rental deposits: VISA, Master Card, AMEX, Discover, Diners Club At the time of rental, we charge the amount of the rental plus an additional $300 security deposit. The credit card used for deposit must be presented at the time of rental and must be in the same name as the renter. top of page

Reservation Policies
It is our policy to hold reservations for up to 4 hours beyond the scheduled arrival time. If you experience delays, please contact us so we can may our best effort to extend your reservation. The maximum rental term is 30 days. Additional drivers must meet all qualifications as the primary driver in regards to age, insurance, license, and major credit card. Additional drivers not available on debit cards. An additional driver charge of $10.00 per day per additional driver. A copy of all drivers license is to be made and attached to the contract. rentals can not be longer than 30 days, you must renturn the car at day 30 , close the contract and reopen a new contract at the new rate. Rates are only valid for 30 days. If you do not return the car after 30 days, the contract is void and your will be charged an additional $100 a day fee from the first day until the car is recovered. all renters must have a return airline ticket in their name departing out of LAX no latter than 28 days from the rental pick up date. top of page

OTHER, Debit cards, and other

-*Debit cards: Debit card only accepted at time of rental when presented with the return flight segment of a round trip airline ticket in the renters name. An additional $4.99 per day fee will be added for using a debit card....Debit card users, your bank can take up to 15 days to process any credits due on your card. *Any violations of the rental contract will cause your rate to change. Rate changes will be determined by the management. MPG information is highway miles from Manufactures web site. International Drivers fee of $5.00 per day will be added for all non U.S.A or Canada residence *Major credit cards: Valid drivers license and credit card must be in the same name. Credit card must have available funds of $300.00 plus estimated amount of rental charges. Unused funds will be returned through the credit card processor after vehicle return. Due to bank processing it can take between 2 to 5 days to appear back on your account when using this form of payment. Cash payments also accepted at end of rental. *Additional drivers fee of $10.00 per day will be added. Additional drivers must have a valid drivers license and the additional proof of insurance required by renter. top of page

local renters
Local renters (southern california residents) must bring proof of insurance..Your insurance card is insuficient for this purpose.You must provide documentation of what limits are covered by your policy, including expiration date.Your insurance company should be able to provide this to you through a declaration page.Also, only major credit cards no debit cards accepted at time of rental. Temporary drivers license will not be accepted. Insurance, credit card and Drivers license must all be in the same name, first and last. You must have available credit of the total rental plus a $400 deposit on your card. top of page

ADDITIONAL DRIVERS
YOU ALWAYS SAVE MORE,...YOU WILL ALWAYS RECEIVE A TOTAL PRICE WITH NO SUPRISES. AFTER YOU COLLECT YOUR LUGGAGE, EXIT THE TERMINAL AND GO TO THE OUTSIDE ISLAND UNDER THE RED SIGN THAT READS HOTELS AND COURTESY SHUTTLES. BOARD THE WHITE JOHNNYPARK SHUTTLE at lot C THAT WILL BRING YOU TO OUR FACILITY.....WE ARE OPEN 24 / 7 Any customer service issues please email to deluxecustomerservice@yahoo.com. please include your rental contract number to better serve you. top of page

AGE
Minimum age for renters and drivers is 21. Renters and drivers under the age of 25 are subject to an underage charge of $20.00 per day. top of page

DEBIT CARDS
Debit cards: Debit card only accepted at time of rental when presented with the return flight segment of a round trip airline ticket in the renters name. .... Debit card must have available funds of $400.00 plus total estimated rental charges. Unused funds will be returned through the credit card processor after vehicle return. Due to bank processing it can take up to 14 days to appear back on your account when using this form of payment, additional fees and restrictions apply....................................................................... top of page

EQUIPMENT
GPS rentals $9.95 per day or $59 95 per week top of page

EQUIPMENT
top of page

INSURANCE
State of California requires that all renters have Liability insurance. Deluxe requires all renters to have insurance to cover damage

http://reservations.deluxerentacar.com/policies/los-angeles-airport/

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Deluxe Rent-A-Car of LAX :: Rental Policies

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to our rental car. Residents living in the U.S.A or Canada please bring with you your insurance card issued by your auto insurance company. If you did not bring this proof with you, you will be required to fill out a statement of insurance form that Deluxe will provide. top of page

LOCAL RENTERS
Local renters (southern california residents) must bring proof of insurance..Your insurance card is insuficient for this purpose.You must provide documentation of what limits are covered by your policy, including expiration date.Your insurance company should be able to provide this to you through a declaration page.Also, only major credit cards no debit cards accepted at time of rental. Temporary drivers license will not be accepted. Insurance, credit card and Drivers license must all be in the same name, first and last. You must have available credit of the total rental plus a $400 deposit on your card. top of page

OTHER
Any violations of the rental contract will cause your rate to change. Rate changes will be determined by the management. MPG information is highway miles from Manufactures web site. International Drivers, other restrictions or fees may apply. .......... Additional drivers must have a valid drivers license and the additional proof of insurance required by renter. Return airline ticket departing LAX within 30 days of rental pick up date required to rent a car. A new California Car License fee law will go into effect in 2009 and will be an additional charge per day. This additional fee is part of the Governors new budget that was pass and made into law. It will appear on your bill as a separate charge. top of page

PAYMENT
Major credit cards: Valid drivers license and credit card must be in the same name. Credit card must have available funds of $300.00 plus estimated amount of rental charges. Unused funds will be returned through the credit card processor after vehicle return. Due to bank processing it can take between 2 to 5 days to appear back on your account when using this form of payment. Cash payments also accepted at end of rental. .............................................................................. top of page

RULES
Reservations will be honored for a period of four hours after the confirmed pick up date and time. Vehicles must be returned with the same amount of fuel as at the start of the rental to avoid refueling charges. All renters must have a return airline ticket in their name departing out of LAX no latter than 28 days from the rental pick up date. Return airline ticket departing LAX within 30 days of rental pick up date required to rent a car. top of page

TRAVELING TO THE U.S.

Renters are only allowed to drive in the state of California, Nevada and Arizona. top of page

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Welcome to Deluxe Rent-A-Car of LAX

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Reservation Summary

Chrysler 300 or similar No Extra LAX Airport

Rate Quote
Rental Rate 1 week @ $ 194.09 Coverage and Extra Charges Car License Fee Sub Total Taxes and Fees SALES TAX CAL TOURISM FEE Free Mileage $ 194.09 $ 194.09 $ 31.71 $ 225.80 $ 22.02 $ 4.85 unlimited

Itinerary

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Pickup Date: Jun 05, 2009 @ 12:00 AM Dropoff Date: Jun 12, 2009 @ 12:00 AM Pickup Location: Los Angeles Airport Dropoff Location: Los Angeles Airport

Total Charges
Chrysler 300 or similar vehicle features All rates are in USD

$ 252.67

Vehicle Details

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Vehicle: Chrysler 300 or similar No Extra LAX Airport Description: Chrysler 300 or similar

>> RESERVE THIS VEHICLE Currency Converter 252.67 USD to choose a currency Courtesy of Yahoo Finance

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6/1/2009

CALIFORNIA CIVIL CODE SECTION 1925-1936.5

Page 1 of 22

FindLaw > FindLaw California > Codes and Statutes > California Code > Civil Code

California Codes California Civil Code CIVIL CODE SECTION 1925-1936.5

1925. Hiring is a contract by which one gives to another the temporary possession and use of property, other than money, for reward, and the latter agrees to return the same to the former at a future time.

1926. The products of a thing hired, during the hiring, belong to the hirer.

1927. An agreement to let upon hire binds the letter to secure to the hirer the quiet possession of the thing hired during the term of the hiring, against all persons lawfully claiming the same.

1928. The hirer of a thing must use ordinary care for its preservation in safety and in good condition.

1929. The hirer of a thing must repair all deteriorations or injuries thereto occasioned by his want of ordinary care.

1930. When a thing is let for a particular purpose the hirer must not use it for any other purpose; and if he does, he is liable to the letter for all damages resulting from such use, or the letter may treat the contract as thereby rescinded.

1931. The letter of a thing may terminate the hiring and reclaim the thing before the end of the term agreed upon: 1. When the hirer uses or permits a use of the thing hired in a manner contrary to the agreement of the parties; or, 2. When the hirer does not, within a reasonable time after request, make such repairs as he is bound to make.

http://caselaw.lp.findlaw.com/cacodes/civ/1925-1936.5.html

6/1/2009

Assembly Bill No. 62 CHAPTER 618 An act to add Article 16.6 (commencing with Section 1758.8) to Chapter 5 of Part 2 of Division 1 of the Insurance Code, relating to rental car insurance.
[Approved by Governor October 5, 1999. Filed with Secretary of State October 10, 1999.] LEGISLATIVE COUNSELS DIGEST

AB 62, Papan. Rental car insurance limited licenses. (1) Existing law governing insurance provides for the licensure and regulation of production agencies, including, among others, insurance agents, life agents, insurance brokers, travel insurance agents, cargo shippers agents, and variable contract agents. Existing law makes it a crime to act or assume to act in a capacity for which a production agency license is required without having that license. This bill would additionally create and establish fees for a new type of production agency license, called a rental car agent license, which would authorize a rental car company or the franchisee of a rental car company to offer to its customers insurance of an authorized insurer for specified types of insurance, if the insurance is offered by a representative of the licensee who is an endorsee on the license and the insurance is sold as part of a vehicle rental transaction. It would require a licensee to maintain the name of each rental car representative who is an endorsee on the license, and to annually file with the Insurance Commissioner a certification of the number of endorsees, a statement that no person other than an endorsee sells or offers insurance on its behalf, and that all endorsees have completed training as required. It would authorize the commissioner to take certain remedial measures for violations of these provisions. The bill would require a rental car agent to provide brochures to customers, as specified, relating to insurance offered, and would specify both required and prohibited conduct of a rental car agent. These provisions would become operative on January 1, 2001. (2) By creating a new category of production agency license, this bill would expand the scope of activities for which a license is required. Thus, the bill would expand the scope of an existing crime, thereby imposing a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

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This bill would provide that no reimbursement is required by this act for a specified reason. The people of the State of California do enact as follows: SECTION 1. Article 16.6 (commencing with Section 1758.8) is added to Chapter 5 of Part 2 of Division 1 of the Insurance Code, to read: Article 16.6. Rental Car Agents 1758.8. (a) No rental car company shall offer or sell insurance unless it is licensed as an insurance agent or broker pursuant to Article 3 (commencing with Section 1631) or has complied with the requirements of this article and has been issued a license by the commissioner as provided in this article. (b) The commissioner may issue to a rental car company, or to a franchisee of a rental car company, that has complied with the requirements of this article, a license that authorizes the rental car company or the franchisee of a rental car company to act as a rental car agent to offer or sell those types of insurance specified in Section 1758.85, in connection with and incidental to rental agreements, on behalf of any insurer authorized to write those types of insurance in this state. 1758.81. (a) An applicant for a rental car agent license under this article shall file the following documents with the commissioner: (1) A written application for licensure, signed by the applicant or an officer of the applicant, in the form prescribed by the commissioner. (2) A certificate by the insurer that is to be named in the rental car agent license, stating that the insurer has satisfied itself that the named applicant is trustworthy and competent to act as its insurance agent limited to this purpose and that the insurer will appoint the applicant to act as its agent to transact the kind or kinds of insurance that are permitted by this article, if the rental car agent license applied for is issued by the commissioner. The certification shall be subscribed by an officer or managing agent of the insurer on a form prescribed by the commissioner. (3) An application fee, and each license period thereafter, a renewal fee, in an amount or amounts determined by the department as sufficient to defray the departments actual cost of processing the application or renewal and implementing this article. (b) Notwithstanding any other provision of law to the contrary, Sections 1667, 1668, 1668.5, 1669, 1670, 1738, and 1739 apply to any application for or issuance of a license pursuant to this article.

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(c) Costs associated with any enforcement action or investigation shall be paid for by the person or organization licensed pursuant to this article. 1758.82. (a) An employee of a rental car company or franchisee of a rental car company that has been issued a rental car agent license pursuant to this article may be an endorsee authorized to offer insurance products under the authority of the rental car agent license if all of the following conditions have been met: (1) The employee is 18 years of age or older. (2) The rental car company, at the time it submits its rental car agent license application pursuant to Section 1758.81, also establishes a list of the names of all endorsees to its rental car agent license. The list shall be maintained by the rental car company in a form prescribed by the commissioner and updated annually. The list shall be retained by the rental car company for three years and made available to the commissioner for review and inspection. (3) The rental car company submits to the commissioner with its initial rental car agent license application and annually thereafter a certification, subscribed by an officer of the company on a form prescribed by the commissioner, stating all of the following: (A) The number of endorsees offering insurance products under the authority of the rental car agent license for the applicable period. (B) A statement that no person other than an endorsee sells or offers insurance on its behalf. (C) That all endorsees have completed training as required by this article. (b) Each rental car company licensed pursuant to this article shall provide for the training of its endorsees prior to allowing its endorsees to offer or sell insurance products. The training shall meet the following minimum standards: (1) Each rental car endorsee shall receive instruction about the types of insurance specified in Section 1758.85 that are offered for sale to prospective renters. (2) Each rental car endorsee shall receive training about ethical sales practices. (3) Each rental car endorsee shall receive training about the disclosures to be given to prospective renters pursuant to subdivision (c) of Section 1758.86. (c) Training materials used by or on behalf of the rental car company to train its endorsees shall be submitted to the department at the time the rental car company applies for a license under this article, and whenever modified thereafter. Any changes to previously submitted training materials shall be submitted to the department with the changes highlighted 30 days prior to their use by the licensee. Training materials and changes to those materials submitted to the department pursuant to this subdivision shall be deemed approved for use by the company unless it is notified by the

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department to the contrary. Failure by a rental car company to submit training materials or changes for departmental review or use of unapproved or disapproved training materials shall constitute grounds for denial of an application for a license, nonrenewal of a license, or suspension of a license, as appropriate. (d) The rental car company shall periodically retrain its endorsees on the subject matter described in subdivision (b), as prescribed by the commissioner. 1758.83. (a) The manager at each location of a rental car company or a franchisee of a rental car company licensed pursuant to this article, or the direct supervisor of the companys endorsees at each location or region shall be an endorsee and shall be responsible for the supervision of each additional endorsee at that location or region. Each licensee shall identify the endorsee who is the manager or supervisor at each location for the purposes of this article. (b) An endorsee may act on behalf and under the supervision of the rental car agent in matters relating to transacting insurance under that agents license. The conduct of an endorsee of a rental car agent acting within the scope of employment or agency shall be deemed the conduct of the rental car agent for purposes of this article. 1758.84. (a) If a licensee or endorsee violates any provision of this article or any other provision of this code, the commissioner may do any of the following: (1) After notice and hearing, suspend or revoke the license of the rental car agent. (2) After notice and hearing impose fines on the rental car agent for its conduct or that of its endorsees. (3) After notice and hearing, impose other penalties, that the commissioner deems necessary and convenient to carry out the purpose of this code, including suspending the privilege of transacting insurance at specific rental locations where violations have occurred, and suspending or revoking the endorsement of individual endorsees or manager endorsees. (b) If any person sells insurance in connection with, or incidental to, rental car agreements or holds himself or herself or an organization out as a rental car agent without obtaining the license required by this article, or as being an endorsee when that person is not an endorsee, or as being licensed pursuant to Chapter 5 (commencing with Section 1631) without obtaining that license, the commissioner may issue a cease and desist order pursuant to Section 12921.8. (c) Notwithstanding any other provision of law to the contrary, the provisions of Section 1748.5 are applicable to both the rental car agent and any endorsee to the license of the rental car agent. 1758.85. A rental car company or franchisee licensed under this article may act as a rental car agent for an authorized insurer only in

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connection with the rental of vehicles and only with respect to the following kinds of insurance: (a) Personal accident insurance for renters and other rental vehicle occupants, for accidental death or dismemberment, and for medical expenses resulting from an accident that occurs with the rental vehicle during the rental period. (b) Liability insurance, which may include uninsured motorist coverage, whether offered separately or in combination with other liability insurance, that provides coverage to the renters and to other authorized drivers of a rental vehicle and is nonduplicative of any standard liability coverage or self-insurance limits provided by the rental company in its rental agreement, for liability arising from the negligent operation of the rental vehicle during the rental period. (c) Personal effects insurance that provides coverage to renters and other vehicle occupants for loss of, or damage to, personal effects in the rental vehicle during the rental period. (d) Roadside assistance insurance. (e) Emergency sickness insurance. 1758.851. The insurance products listed in Section 1758.85 that are sold in conjunction with a vehicle rental are not transferable and do not apply to any vehicle not listed in the rental contract issued. 1758.86. A rental car agent shall not sell insurance pursuant to this article unless all of the following conditions are satisfied: (a) The rental period of the rental agreement does not exceed 30 consecutive days, except for any renewals or extension of the original rental period. (b) The rental car agent provides brochures or other written materials to the prospective renter that do all of the following: (1) Summarize the material terms and conditions of coverage offered to renters, including the identity of the insurer. (2) Describe the process for filing a claim, including a toll-free telephone number to report a claim. (3) Disclose any additional information on the price, benefits, exclusions, conditions, or other limitations of those policies that the commissioner may by rule prescribe. (4) Provide the licensees name, address, telephone number, and license number, as well as the availability of the departments toll-free consumer hotline. (c) The rental car agent or its endorsee makes all of the following disclosures to the renter, which shall be acknowledged in writing by the renter, or displayed by clear and conspicuous signs that are posted at every location where rental agreements are executed, such as the counter where the renter signs the rental agreement: (1) That the purchase by the renter of the kinds of insurance prescribed in this article is not required in order to rent a vehicle. (2) That the insurance policies offered by the rental car agent may provide a duplication of coverage already provided by a renters

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personal automobile insurance policy or by another source of coverage. (3) That the endorsee on the rental car agents license is not qualified or authorized to evaluate the adequacy of the purchasers existing insurance coverages. (d) Evidence of coverage is stated on the face of the rental agreement or evidence of coverages provided to every renter who elects to purchase that coverage is indicated to the renter. (e) The insurance is provided under an individual policy issued to the purchaser, or under a group, or master policy issued to an organization licensed as a rental car agent by an insurer authorized to transact the applicable kinds or types of insurance in this state. 1758.861. A licensee shall not be required to treat moneys collected from renters purchasing insurance, pursuant to this article, as funds received in a fiduciary capacity if the insurer represented by the licensee has provided in writing that the funds need not be segregated from funds received by the rental car company on account of vehicle rental and the charges for insurance coverage are itemized and incorporated as part of the rental agreement. 1758.87. A rental car agent shall not do any of the following: (a) Offer to sell insurance except in conjunction with, and incidental to, authorized rental agreements. (b) Advertise, represent, or otherwise portray itself or its employees or endorsees as licensed insurers, life agents, or fire and casualty broker-agents. (c) Pay an endorsee any compensation, fee, or commission dependent on the placement of insurance under the agents license. Nothing in this code shall prohibit the payment of a performance-related incentive. For the purposes of this subdivision, a performance-related incentive is not a commission as otherwise defined. A performance-related incentive is money or other tangible or intangible items of value paid or given to any endorsee of the licensee which is not based solely on the offering or selling of the insurance products listed in Section 1758.85. 1758.88. Any insurer that provides insurance to be sold by a rental car company or franchisee of a rental car company under this article shall file a copy of any individual policy issued to a purchaser, or any policy or certificate issued under a group or master policy to an organization licensed as a rental car agent, with the commissioner, who shall make that policy available to the public. 1785.89. As used in this article, the following definitions have the following meanings: (a) (1) License period means all of that two-year period beginning as described in subparagraph (A) or (B) of paragraph (2), as applicable, and ending the second succeeding year on the last calendar day of the month in which the initial license was issued.

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(2) A license period shall be determined for each person as follows: (A) Upon initial licensing, the license period starts on the date the license is issued. (B) Subsequently, the license period starts the first day of the month following the month in which the initial license was issued. (3) A license is required to be renewed on or before the expiration date of the license period. (b) Rental vehicle or vehicle means a motor vehicle operated by a driver who is not required to possess a commercial drivers license to operate the motor vehicle and the motor vehicle is either of the following: (1) A private passenger motor vehicle, including a passenger van, minivan, or sports utility vehicle. (2) A cargo vehicle, including a cargo van, pickup truck, or truck with a gross vehicle weight of less than 26,000 pounds. (c) Renter means any person who obtains the use of a vehicle from a rental car company under the terms of a rental agreement. (d) Rental car company means any person in the business of renting vehicles to the public. (e) Rental agreement means any written agreement setting forth the terms and conditions governing the use of a vehicle provided by the rental car company. (f) Rental car agent means a person or organization licensed pursuant to this article to offer insurance in connection with and incidental to rental car agreements on behalf of an insurer authorized to write those types of insurance in this state. (g) Endorsee means an unlicensed employee of a rental car agent who meets the requirements of this article. 1758.891. Until January 1, 2001, a rental car company or a franchisee of a rental car company shall not be required to obtain a license to offer the insurance products described in Section 1758.85. SEC. 2. The Insurance Commissioner shall adopt rules to implement this act, which may include fee differentials for smaller rental car companies. The rules shall be adopted as emergency regulations in accordance with Chapter 3.5 (commencing with Section 11340) of Division 3 of Title 2 of the Government Code, and for the purposes of that chapter, including Section 11349.6 of the Government Code, the adoption of rules shall be considered by the Office of Administrative Law to be necessary for the immediate preservation of the public peace, health and safety, and general welfare. SEC. 3. Until January 1, 2001, a rental car company or a franchisee of a rental car company shall not be required to obtain a license to offer the insurance products described in Section 1758.85 of the Insurance Code.

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SEC. 4. No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.

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