An agent or broker, other than a surplus lines broker, who solicits or negotiates insurance with a nonadmitted insurer is guilty of a ___________ by California law.

The correct response highlights that in California, an agent or broker who solicits or negotiates insurance with a nonadmitted insurer, outside the framework of a surplus lines broker, is committing a misdemeanor. This classification is significant because misdemeanors are less severe than felonies and typically carry lighter penalties such as fines or short-term imprisonment.

Understanding the distinction is essential for insurance professionals, as operating within the legal bounds of insurance regulations is crucial to maintaining compliance and avoiding legal repercussions. A misdemeanor charge indicates that while the act is against the law, it is not as serious as a felony charge, which would indicate a more severe breach of laws, typically involving more significant penalties.

The other options—felony, tort, and violation—do not accurately capture the nature of the offense under California law regarding engaging with nonadmitted insurers in this context. A felony denotes a more severe crime, while a tort refers to a civil wrong that causes harm or loss, a concept not applicable here. A violation might imply a breach of rules or regulations but does not encapsulate the specific criminal nature of conducting insurance business in this manner.