An insurer, upon receiving notice from an insured, shall reimburse any fees and extra premium charged to an insured due to a late premium payment or a lapse in coverage under the policy if the late payment or lapse in coverage was the result of fraud committed by an agent or broker licensed pursuant to this code and one of the following has occurred:
(a) The agent or broker has been convicted of fraudulent activity in court.
(b) An administrative penalty has been imposed on the agent or broker for fraudulent activity.
(c) The agent or broker has been charged with fraud in court or in an administrative action and has agreed to plead guilty to a lesser charge for the fraudulent activity of which he or she is accused.
(Added by Stats. 2004, Ch. 160, Sec. 1. Effective January 1, 2005.)