HB-4421, As Passed Senate, November 9, 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
House Bill No. 4421 as amended November 8, 2005
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 <<takes effect February 1,
2006. >>