HB-5156, As Passed House, December 13, 2012HB-5156, As Passed Senate, December 13, 2012

SUBSTITUTE FOR

HOUSE BILL NO. 5156

     A bill to amend 1956 PA 218, entitled

"The insurance code of 1956,"

by amending sections 1201, 1222, and 1224 (MCL 500.1201, 500.1222,

and 500.1224), sections 1201 and 1224 as amended by 2001 PA 228.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 1201. As used in this chapter:

     (a) "Agent" except as provided in section 1243 means an

insurance producer.

     (b) "Business entity" means a corporation, association,

partnership, limited liability company, limited liability

partnership, or other legal entity.

     (c) "Home state", except as provided in section 1224, means

the District of Columbia or any state or territory of the United

States in which an insurance producer maintains his or her

principal place of residence or principal place of business and is

licensed to act as an insurance producer.

     (d) "Insurance" means any of the lines of authority in chapter

6.

     (e) "Insurance producer" means a person required to be

licensed under the laws of this state to sell, solicit, or

negotiate insurance.

     (f) "License" means a document issued by this state's

commissioner authorizing a person to act as an insurance producer

for the qualifications specified in the document. The license

itself does not create any actual, apparent, or inherent authority

in the holder to represent or commit an insurer.

     (g) "Limited line credit insurance" includes credit life,

credit disability, credit property, credit unemployment,

involuntary unemployment, mortgage life, mortgage guaranty,

mortgage disability, guaranteed automobile protection insurance,

and any other form of insurance offered in connection with an

extension of credit that is limited to partially or wholly

extinguishing that credit obligation that the commissioner

determines should be designated a form of limited line credit

insurance.

     (h) "Limited line credit insurance producer" means a person

who sells, solicits, or negotiates 1 or more forms of limited line

credit insurance coverage to individuals through a master,

corporate, group, or individual policy.

     (i) "Limited lines insurance" means any of the following:

     (i) Marine insurance as defined in section 614.

     (ii) Credit insurance as described in section 624(1)(e).

     (iii) Surety and fidelity insurance as defined in section 628.

     (iv) Legal expense insurance as defined in section 618.

     (v) Livestock insurance as described in section 624(1)(g).

     (vi) Malpractice insurance as described in section 624(1)(h).

     (vii) Plate glass insurance as described in section 624(1)(c).

     (viii) Any other miscellaneous insurance described in section

624(1)(i).

     (ix) Any other line of insurance that the commissioner

considers necessary to recognize for the purposes of complying to

comply with section 1206a(5).

     (j) "Limited lines producer" means a person authorized by the

commissioner to sell, solicit, or negotiate limited lines

insurance.

     (k) "Negotiate" means the act of conferring directly with or

offering advice directly to a purchaser or prospective purchaser of

a particular contract of insurance concerning any of the

substantive benefits, terms, or conditions of the contract,

provided that the person engaged in that act either sells insurance

or obtains insurance from insurers for purchasers.

     (l) "Sell" means to exchange a contract of insurance by any

means, for money or its equivalent, on behalf of an insurance

company.

     (m) "Solicit" means attempting to sell insurance or asking or

urging a person to apply for a particular kind of insurance from a

particular company.

     (n) "Terminate" means the cancellation of the relationship

between an insurance producer and the insurer or the termination of

a producer's authority to transact insurance.

     Sec. 1222. (1) A person shall not adjust loss or damage under

a policy of insurance nor or advertise, solicit business, or hold

himself or herself out to the public as an adjuster unless he or

she is licensed as an adjuster. This section does not apply to a

person admitted to the practice of law in this state, to a licensed

agent adjusting loss or damage under a policy within his control,

to an employee of an insurer or a manager of an insurer authorized

to transact insurance in this state adjusting loss or damage under

a policy written by the insurer or to a marine average adjuster.

     (2) The following are exempt from licensure under subsection

(1):

     (a) A person admitted to the practice of law in this state.

     (b) A marine average adjuster.

     (c) An employee or manager of an authorized insurer adjusting

loss or damage under a policy issued by the insurer.

(d) A licensed insurance producer to whom claim authority has

been granted by an insurer.

     (e) An individual who collects claim information from, or

furnishes claim information to, insureds or claimants, and who

conducts data entry including entering data into an automated

claims adjudication system, if the individual is under the

supervision of 1 or more licensed independent adjusters or an

individual who is exempt from licensure under subdivision (c). As

used in this subdivision, "automated claims adjudication system"

means a preprogrammed computer system designed for the collection,

data entry, calculation, and final resolution of portable consumer

electronic insurance claims.

     Sec. 1224. (1) An application for a license to act as an

adjuster shall be made to the commissioner on forms prescribed by

the commissioner.

     (2) Within a reasonable time after receipt of a properly

completed application form under subsection (1), the commissioner

may subject the applicant to a written examination, and may conduct

investigations and propound interrogatories concerning the

applicant's qualifications, residence, business affiliations, and

any other matter that the commissioner considers necessary or

advisable to determine compliance with this chapter, or for the

protection of the public. The commissioner may waive the

examination requirements of this subsection for a person who has

been licensed as an adjuster within the preceding 12 months. The

commissioner shall make a decision on the application within 60

days after receipt of a properly completed application form.

     (3) After examination, investigation, and interrogatories, the

commissioner shall issue a license to act as an adjuster to an

applicant if the commissioner determines that the applicant

possesses reasonable understanding of the provisions, terms, and

conditions of the insurance with which the applicant will deal,

possesses reasonable understanding of the insurance laws of this

state, intends in good faith to act as an adjuster, possesses a

good business reputation, and possesses good moral character to act

as an adjuster. Persons currently licensed and new licenses issued

are subject to any additional restrictions under which a resident

of this state would be licensed in the jurisdiction in which the

applicant resides. Any such restriction shall be imposed by the

commissioner upon the date set for payment of the license fee. The

commissioner shall not issue a new license or accept an annual

license fee continuing a current license to either of the

following:

     (a) A person residing in a state that denies a comparable

license to a resident of this state solely because of residency.

     (b) A person who is employed either directly or indirectly by

an adjuster that is a resident of a state, or by an adjuster's

business that has a majority of shareholders, members, officers,

directors, or owners that are residents of a state, that denies a

comparable license to a resident of this state solely because of

residency. An affidavit from an applicant establishing compliance

with this subdivision may be relied on by the commissioner to show

compliance with this subdivision.

     (4) The commissioner shall not issue a license to act as an

adjuster to a person who is employed by, owns stock in, is an

officer or director of, or in any other manner is connected with, a

fire repair contractor.

     (5) The commissioner shall not issue a nonresident license to

act as an adjuster to an individual who is a resident of Canada

unless the individual has received a resident license to act as an

adjuster from another state or declared another state his or her

home state.

     (6) As used in this section:

     (a) "Home state" means either of the following:

     (i) The state in which the adjuster maintains his or her

principal place of residence or business and is licensed

to act as a resident adjuster.

     (ii) If the state of the adjuster's principal place of

residence or business does not license adjusters, the state in

which the adjuster is licensed and in good standing and that is

designated by the adjuster as the adjuster's home state.

     (b) "State" means that term as defined in section 3o of 1846

RS 1, MCL 8.3o.