SB-1401, As Passed House, December 11, 2008

SUBSTITUTE FOR

SENATE BILL NO. 1401

     A bill to amend 1956 PA 218, entitled

"The insurance code of 1956,"

by amending section 1239 (MCL 500.1239), as amended by 2007 PA 187.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 1239. (1) In addition to any other powers under this act,

the commissioner may place on probation, suspend, or revoke , or

refuse to issue an insurance producer's license or may levy a civil

fine under section 1244 or any combination of actions, and the

commissioner shall refuse to issue a license under section 1205 or

1206a, for any 1 or more of the following causes:

     (a) Providing incorrect, misleading, incomplete, or materially

untrue information in the license application.

     (b) Violating any insurance laws or violating any regulation,

subpoena, or order of the commissioner or of another state's

insurance commissioner.

     (c) Obtaining or attempting to obtain a license through

misrepresentation or fraud.

     (d) Improperly withholding, misappropriating, or converting

any money or property received in the course of doing insurance

business.

     (e) Intentionally misrepresenting the terms of an actual or

proposed insurance contract or application for insurance.

     (f) Having been convicted of a felony.

     (g) Having admitted or been found to have committed any

insurance unfair trade practice or fraud.

     (h) Using fraudulent, coercive, or dishonest practices or

demonstrating incompetence, untrustworthiness, or financial

irresponsibility in the conduct of business in this state or

elsewhere.

     (i) Having an insurance producer license or its equivalent

denied, suspended, or revoked in any other state, province,

district, or territory.

     (j) Forging another's name to an application for insurance or

to any document related to an insurance transaction.

     (k) Improperly using notes or any other reference material to

complete an examination for an insurance license.

     (l) Knowingly accepting insurance business from an individual

who is not licensed.

     (m) Failing to comply with an administrative or court order

imposing a child support obligation.

     (n) Failing to pay the single business tax or the Michigan

business tax or comply with any administrative or court order

directing payment of the single business tax or the Michigan

business tax.

     (2) Before the commissioner denies an application for a

license under section 1205 or 1206a, the commissioner shall notify

in writing the applicant or licensee of the denial and of the

reason for the denial. Not later than 30 days after this written

denial, the applicant or licensee may make written demand upon the

commissioner for a hearing before the commissioner to determine the

reasonableness of the commissioner's action. A hearing under this

subsection shall be held pursuant to the administrative procedures

act of 1969, 1969 PA 306, MCL 24.201 to 24.328.

     (3) The license of a business entity may be suspended,

revoked, or refused if the commissioner finds, after hearing, that

an individual licensee's violation was known or should have been

known by 1 or more of the partners, officers, or managers acting on

behalf of the partnership or corporation and the violation was

neither reported to the commissioner nor corrective action taken.

     (4) In addition to or in lieu of any applicable denial,

suspension, or revocation of a license, a person may, after

hearing, be subject to a civil fine under section 1244.

     (5) In addition to the penalties under this section, the

commissioner may enforce the provisions of and impose any penalty

or remedy authorized by this act against any person who is under

investigation for or charged with a violation of this act even if

the person's license or registration has been surrendered or has

lapsed by operation of law.