HB-4421, As Passed House, May 24, 2005

SUBSTITUTE FOR

HOUSE BILL NO. 4421

     A bill to amend 1956 PA 218, entitled

"The insurance code of 1956,"

by amending section 1204c (MCL 500.1204c), as amended by 2001 PA

228.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 1204c. (1) As used in this section:

     (a) "Hour" means a period of time of not less than 50 minutes.

     (b) "Insurance producer" means a life-health agent or

property-casualty agent.

     (c) "Life-health agent" means a resident or nonresident

individual insurance producer licensed for life, limited life,

mortgage redemption, accident and health, or any combination

thereof.

     (d) "Property-casualty agent" means a resident or nonresident

individual insurance producer or solicitor licensed for automobile,

fire, multiple lines, any limited or minor property and casualty

line, or any combination thereof.

     (2) Unless the insurance producer has renewed his or her

license pursuant to subsection (4), an insurance producer's hours

of study accrued under this section shall be reviewed for license

continuance as follows:

     (a) If the insurance producer's license number ends in "1" as

follows:

     (i) If the insurance producer's last name starts with A to L,

on January 1, 1995 and on January 1 every 2 years thereafter.

     (ii) If the insurance producer's last name starts with M to Z,

on January 1, 1996 and on January 1 every 2 years thereafter.

     (b) If the insurance producer's license number ends in "2" as

follows:

     (i) If the insurance producer's last name starts with A to L,

on February 1, 1995 and on February 1 every 2 years thereafter.

     (ii) If the insurance producer's last name starts with M to Z,

on February 1, 1996 and on February 1 every 2 years thereafter.

     (c) If the insurance producer's license number ends in "3" as

follows:

     (i) If the insurance producer's last name starts with A to L,

on March 1, 1995 and on March 1 every 2 years thereafter.

     (ii) If the insurance producer's last name starts with M to Z,

on March 1, 1996 and on March 1 every 2 years thereafter.

     (d) If the insurance producer's license number ends in "4" as

follows:

     (i) If the insurance producer's last name starts with A to L,

on June 1, 1995 and on June 1 every 2 years thereafter.

     (ii) If the insurance producer's last name starts with M to Z,

on June 1, 1996 and on June 1 every 2 years thereafter.

     (e) If the insurance producer's license number ends in "5" as

follows:

     (i) If the insurance producer's last name starts with A to L,

on July 1, 1995 and on July 1 every 2 years thereafter.

     (ii) If the insurance producer's last name starts with M to Z,

on July 1, 1996 and on July 1 every 2 years thereafter.

     (f) If the insurance producer's license number ends in "6" as

follows:

     (i) If the insurance producer's last name starts with A to L,

on August 1, 1995 and on August 1 every 2 years thereafter.

     (ii) If the insurance producer's last name starts with M to Z,

on August 1, 1996 and on August 1 every 2 years thereafter.

     (g) If the insurance producer's license number ends in "7" as

follows:

     (i) If the insurance producer's last name starts with A to L,

on September 1, 1995 and on September 1 every 2 years thereafter.

     (ii) If the insurance producer's last name starts with M to Z,

on September 1, 1996 and on September 1 every 2 years thereafter.

     (h) If the insurance producer's license number ends in "8" as

follows:

     (i) If the insurance producer's last name starts with A to L,

on October 1, 1995 and on October 1 every 2 years thereafter.

     (ii) If the insurance producer's last name starts with M to Z,

on October 1, 1996 and on October 1 every 2 years thereafter.

     (i) If the insurance producer's license number ends in "9" as

follows:

     (i) If the insurance producer's last name starts with A to L,

on November 1, 1995 and on November 1 every 2 years thereafter.

     (ii) If the insurance producer's last name starts with M to Z,

on November 1, 1996 and on November 1 every 2 years thereafter.

     (j) If the insurance producer's license number ends in "0" as

follows:

     (i) If the insurance producer's last name starts with A to L,

on December 1, 1995 and on December 1 every 2 years thereafter.

     (ii) If the insurance producer's last name starts with M to Z,

on December 1, 1996 and on December 1 every 2 years thereafter.

     (3) If an insurance producer's hours of study would be

reviewed according to the schedule under subsection (2) within 23

months after issuance of the initial license, the hours shall not

be reviewed on the first scheduled date following the issuance of

the initial license and shall be reviewed on the next scheduled

review date following the first review date according to the

schedule under subsection (2), unless the insurance producer has

renewed his or her license pursuant to subsection (4).

     (4) Except as provided in subsections (11) to (14), before the

review date of each applicable 2-year period provided for under

subsection (2) or (3), an insurance producer wishing to renew his

or her license shall renew his or her license by attending or

instructing not less than  30  24 hours of continuing education

classes approved by the commissioner or  30  24 hours of home study

if evidenced by successful completion of course work approved by

the commissioner. Of the  30  24 hours of continuing education

required,  a life-health agent shall attend or instruct not less

than 15 hours in a program of study approved for life-health agents

and a property-casualty agent shall attend or instruct not less

than 15 hours in a program of study approved for property-casualty

agents  not less than 3 hours shall be in ethics in insurance

classes or course work.

     (5) After reviewing recommendations made by the council under

section 1204b, the commissioner shall approve a program of study if

the commissioner determines that the program increases knowledge of

insurance and related subjects as follows:

     (a) For a life-health agent program of study, the program

offers instruction in 1 or more of the following:

     (i) The fundamental considerations and major principles of life

insurance.

     (ii) The fundamental considerations and major principles of

health insurance.

     (iii) Estate planning and taxation as related to insurance.

     (iv) Industry and legal standards concerning ethics in

insurance.

     (v) Legal, legislative, and regulatory matters concerning

insurance, the insurance code, and the insurance industry.

     (vi) Principal provisions used in life insurance contracts,

health insurance contracts, or annuity contracts and differences in

types of coverages.

     (vii) Accounting and actuarial considerations in insurance.

     (viii) Principles of agency management, excluding telemarketing

or other marketing instruction.

     (b) For a property-casualty agent program of study, the

program offers instructions in 1 or more of the following:

     (i) The fundamental considerations and major principles of

property insurance.

     (ii) The fundamental considerations and major principles of

casualty insurance.

     (iii) Basic principles of risk management.

     (iv) Industry and legal standards concerning ethics in

insurance.

     (v) Legal, legislative, and regulatory matters concerning

insurance, the insurance code, and the insurance industry.

     (vi) Principal provisions used in casualty insurance contracts,

no-fault insurance contracts, or property insurance contracts and

differences in types of coverages.

     (vii) Accounting and actuarial considerations in insurance.

     (viii) Principles of agency management, excluding telemarketing

or other marketing instruction.

     (6) A provider of a program of study for insurance producers

applying for approval or reapproval from the commissioner under

this section shall file, on a form provided by the commissioner, a

description of the course of study including a description of the

subject matter and course materials, hours of instruction, location

of classroom, qualifications of instructors, and maximum student-

instructor ratio and shall pay a nonrefundable $25.00 filing fee.

Any material change in a program of study shall require reapproval

by the commissioner. If the information in an application for

approval or reapproval is insufficient for the commissioner to

determine whether the program of study meets the requirements under

subsection (5), the commissioner shall give written notice to the

provider, within 15 days after the provider's filing of the

application for approval or reapproval, of the additional

information needed by the commissioner. An application for approval

or reapproval shall be considered approved unless disapproved by

the commissioner within 90 days after the application for approval

or reapproval is filed, or within 90 days after the receipt of

additional information if the information was requested by the

commissioner, whichever is later.

     (7) A provider of a program of study approved by the

commissioner under this section shall pay a provider authorization

fee of $500.00 for the first year the provider's program of study

was approved under this section and a $100.00 provider renewal fee

for each year thereafter that the provider offers the approved

program of study.

     (8) A person dissatisfied with an approved program of study

may petition the commissioner for a hearing on the program or the

commissioner on his or her own initiative may request a hearing on

a program of study. If the commissioner finds the petition to have

been submitted in good faith, that the petition if true shows the

program of study does not satisfy the criteria in subsection (5),

or that the petition otherwise justifies holding a hearing, the

commissioner shall hold a hearing pursuant to chapter 4 of the

administrative procedures act of 1969, 1969 PA 306, MCL 24.271 to

24.287, within 30 days after receipt of the petition and upon not

less than 10 days' written notice to the petitioner and the

provider of the program of study. If the commissioner requests a

hearing on a program of study on his or her own initiative, the

commissioner shall hold a hearing pursuant to chapter 4 of the

administrative procedures act of 1969, 1969 PA 306, MCL 24.271 to

24.287, upon not less than 10 days' written notice to the provider

of the program of study.

     (9) If after a hearing under subsection (8) the commissioner

finds that the program of study does not satisfy the requirements

under subsection (5), the commissioner shall state, in a written

order mailed first-class to the petitioner and provider of the

program of study, his or her findings and the date upon which the

commissioner will revoke approval of the program of study which

date shall be within a reasonable time of the issuance of the

order.

     (10) A certificate of attendance or instruction of an approved

program of study or a certificate of successful completion of

course work shall be filed as directed by the commissioner on a

form prescribed by the commissioner and shall indicate the name and

number of the course of study, the number of hours, dates of

completion, and the name and number of schools attended or taught

by the insurance producer or the evidence of successful completion

of course work. A representative of the approved program of study

shall file the form and a fee of $1.00 per hour for course credit

for each insurance producer license renewal as directed by the

commissioner within 30 days after the insurance producer completes

the program. A copy of the form shall also be mailed first-class to

the insurance producer who attended, taught, or successfully

completed the program of study. The commissioner may enter into

contracts to provide for the administrative functions of this

subsection.

     (11) The commissioner  may  shall waive the continuing

education requirements of this section for an insurance producer if

the producer is unable to comply with the continuing education

requirements of this section due to military service or if the

commissioner determines that enforcement of the requirements would

cause a severe hardship. The commissioner shall waive the

continuing education requirements of this section for an insurance

producer who is licensed to write only travel or baggage insurance

policies and whose employment is for a purpose other than the sale

of those policies.

     (12) The commissioner may enter into reciprocal continuing

education agreements with insurance commissioners from other

states.

     (13) If an insurance producer has not met his or her

continuing education requirements by the expiration date of his or

her license, the insurance producer shall have a 90-day grace

period in which to meet the continuing education requirements of

this section. During the 90-day grace period, the insurance

producer shall not solicit or sell new policies of insurance, bind

coverage, or otherwise act as an insurance producer except that the

insurance producer may continue to service policies previously sold

and may receive commissions on policies previously sold. If the

insurance producer has not met his or her continuing education

requirements by the expiration of the 90-day grace period, the

insurance producer's license shall be canceled. An insurance

producer whose license has been canceled under this section may

reapply for license to act as an insurance producer under section

1204, except that the program of study requirements under section

1204 shall not be waived.

     (14) An insurance producer who has sold his or her insurance

business and who has not met the continuing education requirements

of this section shall not solicit or sell new policies of

insurance, bind coverage, or otherwise act as an insurance producer

except that the insurance producer may continue to service policies

previously sold and may receive commissions on policies previously

sold as well as receive partial commissions on policies of

insurance sold by a purchasing insurance producer. An insurance

producer who is in the process of selling his or her insurance

business and who has not met the continuing education requirements

of this section shall not solicit or sell new policies of

insurance, bind coverage, or otherwise act as an insurance producer

except that the insurance producer may continue to service policies

previously sold and may receive commissions on policies previously

sold as well as receive partial commissions on policies of

insurance sold by a purchasing insurance producer, for a period not

to exceed 12 months after the selling insurance producer's license

review date under subsection (2). An insurance producer whose

license has been canceled and who wishes to resume soliciting or

selling new policies of insurance, bind coverage, or otherwise act

as an insurance producer and who has not met the continuing

education requirements within the immediately preceding 2-year

period may reapply for license to act as an insurance producer

under section 1204.

     Enacting section 1. This amendatory act shall take effect

November 1, 2005.