September 10, 2008, Introduced by Senators SANBORN, THOMAS, BARCIA and GILBERT and referred to the Committee on Economic Development and Regulatory Reform.
A bill to amend 1956 PA 218, entitled
"The insurance code of 1956,"
by amending sections 1204b and 1204c (MCL 500.1204b and 500.1204c),
section 1204b as amended by 1992 PA 84 and section 1204c as amended
by 2006 PA 442.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1204b. (1) An insurance agent education advisory council
is
created within the department of commerce labor and economic
growth. The commissioner shall appoint the members of the council.
The council shall be composed of the following:
(a) Two representatives of the Michigan association of life
underwriters.
(b) Two representatives of the professional independent
insurance agents of Michigan.
(c) Three insurer representatives.
(d) At least 1 licensed property and casualty insurance agent.
(e) At least 1 licensed life insurance agent.
(f) One representative of the insurance education field.
(g) One representative of the general public.
(h) The commissioner as an ex officio member.
(2) Initially, 3 members shall be appointed for a term of 1
year, 3 members for a term of 2 years, and the remaining members
for a term of 3 years. Thereafter, members of the council shall
serve for a term of 3 years and for not more than 2 consecutive
terms. The council shall meet on at least a semiannual basis.
Members shall serve without compensation but shall be reimbursed
for their actual and necessary expenses.
(3) The council shall do all of the following:
(a) Review and make recommendations to the commissioner with
respect to course materials, curriculum, and the credentials of the
instructors of each program of study registered with the
commissioner pursuant to section 1204a.
(b) Review continuing education programs of study under
section
1204c(4) 1204c(3) and make recommendations to the
commissioner on whether those programs meet the requirements in
section
1204c(5) 1204c(4).
(c) Make recommendations to the commissioner with respect to
educational requirements of insurance agents.
(4) A member of the council or designee of the commissioner
shall be permitted access to any classroom while instruction is in
progress to monitor the classroom instruction.
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).
(2) An insurance producer's hours of study accrued under this
section shall be reviewed for license continuance every 2 years
under a schedule established by the commissioner. The commissioner
may establish a schedule for license continuation that staggers
license continuation dates to apportion the continuation dates
throughout the calendar year. If the system of staggered
continuation is adopted, the commissioner may extend the licensure
period for some licensees.
(3) (4)
Except as provided in subsections (11)
(10) to (14)
(13), 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 24 hours of continuing
education classes approved by the commissioner or 24 hours of home
study or online training if evidenced by successful completion of
course work approved by the commissioner. Of the 24 hours of
continuing education required, not less than 3 hours shall be in
ethics in insurance classes or course work.
(4) (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.
(ix) The fundamental considerations, major principles, and
statutory requirements of long-term care insurance.
(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.
(5) (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) (4), 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.
(6) (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.
(7) (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)
(4), 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.
(8) (9)
If after a hearing under subsection
(8) (7) the
commissioner finds that the program of study does not satisfy the
requirements
under subsection (5) (4), 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.
(9) (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.
(10) (11)
The commissioner 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 the following
insurance producers:
(a) 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.
(b) An insurance producer who is licensed to write only
limited line credit insurance.
(11) (12)
The commissioner may enter into
reciprocal
continuing education agreements with insurance commissioners from
other states.
(12) (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.
(13) (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.