(a) Except pursuant to an exemption granted by the department, no person licensed under this chapter shall employ as an agent any person who meets any of the following criteria:

1. (1) Whose license has been revoked, or is currently suspended.
2. (2) Who has committed any one flagrant or repeated violations of this chapter or Chapter 7 (commencing with Section 56101).
3. (3) Who failed to pay a producer’s claims for which the person, or, where the person controlled the decision to pay, the person’s employer, was liable, and which arose out of the conduct of a business licensed, or required to be licensed, under this chapter or Chapter 7 (commencing with Section 56101).
4. (4) Who has been convicted of a crime that includes as one of its elements the financial victimization of another person.

(d) The department may grant an exemption on presentation of substantial, clear, and convincing evidence to support a reasonable belief as to any of the following:

1. (1) There has been a mistake of fact or identity.
2. (2) The present role as an agent provides no opportunity for a repeat of the prior behavior.

3. (3) The person has been rehabilitated.

   All submissions shall be authenticated and verified under penalty of perjury. Unless the licensee or agent can prove one of these three elements by substantial, clear, and convincing evidence, the department shall deny the request for exemption.

(e)

1. (1) A licensee or agent who has been identified by the department as satisfying any of the criteria set forth in paragraphs (1) to (4), inclusive, of subdivision (a) and who has not been granted an exemption by the department shall be afforded a hearing upon the licensee’s or agent’s request under this chapter. The licensee or agent shall not have a right of hearing if the department did not notify the employer or deny an exemption.
2. (2) At the hearing, the department shall have the burden to prove that any of the criteria set forth in paragraphs (1) to (4), inclusive, of subdivision (a) are satisfied by a preponderance of the evidence. It shall be the licensee’s or agent’s burden to prove rehabilitation by substantial, clear, and convincing evidence.
3. (3) In the case of a criminal conviction, “convicted of a crime” includes a plea or verdict of guilty or a conviction following a plea of nolo contendere. Any action that the department is permitted to take following the establishment of a conviction may be taken when the time for appeal has elapsed, the judgment of conviction has been affirmed on appeal, or when an order granting probation is made suspending the imposition of sentence, notwithstanding a subsequent order pursuant to Sections 1203.4 and 1203.4a of the Penal Code permitting the person to withdraw his or her plea of guilty and to enter a plea of not guilty, or setting aside the verdict of guilty, or dismissing the accusation, information, or indictment. For purposes of this section or any other provision of this chapter, the record of a conviction, or a copy thereof certified by the clerk of the court or by a judge of the court in which the conviction occurred, shall be conclusive evidence of the conviction.
4. (4) For purposes of this section or any other provision of this chapter, a certified copy of a decision and order or minutes of the court in which a finding is made concerning any of the criteria set forth in paragraphs (1) to (3), inclusive, of subdivision (a), is prima facie evidence of the truth of the charge and collateral estoppel applies.