Chapter 093

2006 -- H 7470

Enacted 06/13/06

A N A C T

RELATING TO INSURANCE PRODUCERS' BRANCHES -- LIFE INSURANCE

COMPANIES' OFFICES

Introduced By: Representative Richard W. Singleton

Date Introduced: February 16, 2006

It is enacted by the General Assembly as follows:

     SECTION 1. Section 27-2-18 of the General Laws in Chapter 27-2 entitled "Foreign

Insurance Companies" is hereby amended to read as follows:

27-2-18. Insurance producers' branches -- Life insurance companies' offices. Life

insurance companies' offices. -- No insurance producer of any foreign insurance company, other

than life, doing business in any city or town in this state shall be allowed to establish any branch

agency in any other city or town in the state; provided, that every Every life insurance company

doing business in this state, and whose premium income received from the inhabitants of this

state in any one year shall exceed twenty-five thousand dollars ($25,000), shall equip and

maintain an office in this state, satisfactory to the insurance commissioner, for the transaction of

business in this state.

     SECTION 2. Sections 27-2.4-9 and 27-2.4-15 of the General Laws in Chapter 27-2.4

entitled "Producer Licensing Act" are hereby amended to read as follows:

27-2.4-9. License. -- (a) Unless denied licensure pursuant to section 27-2.4-14, persons

who have met the requirements of sections 27-2.4-7 and 27-2.4-8 shall be issued an insurance

producer license. An insurance producer may receive qualification for a license in one or more of

the following lines of authority:

      (1) Life insurance coverage on human lives including benefits of endowment and

annuities, and may include benefits in the event of death or dismemberment by accident and

benefits for disability income;

      (2) Accident and health or sickness insurance coverage for sickness, bodily injury or

accidental death and may include benefits for disability income;

      (3) Property insurance coverage for the direct or consequential loss or damage to

property of every kind;

      (4) Casualty insurance coverage against legal liability, including that for death, injury or

disability or damage to real or personal property;

      (5) Variable life and variable annuity products insurance coverage provided under

variable life insurance contracts and variable annuities;

      (6) Personal lines-property and casualty insurance coverage sold to individuals and

families for primary noncommercial purposes;

      (7) Credit-limited line credit insurance;

      (8) Any other line of insurance permitted under state laws or regulations.

      (b) An insurance producer license shall remain in effect unless revoked or suspended as

long as the fee set forth in section 27-2.4-4 is paid and education requirements for resident

individual insurance producers are met by the license renewal due date.

      (c) An individual insurance producer who allows his or her license to expire may, within

twelve (12) months from the due date of the renewal fee, reinstate this license without the

necessity of passing a written examination. A penalty in the amount of double the unpaid renewal

fee shall be required for any renewal fee received after the due date.

      (d) A licensed insurance producer who is unable to comply with license renewal

procedures due to military service or some other extenuating circumstance (e.g., a long-term

medical disability) may request a waiver of those procedures. The insurance producer may also

request a waiver of any examination requirement or any other fine or sanction imposed for failure

to comply with renewal procedures.

      (e) The license shall contain the insurance producer's name, address, personal

identification license number, and the date of issuance, the license type, lines of authority, the

expiration date and any other information the insurance commissioner deems necessary.

      (f) Insurance producers shall inform the insurance commissioner by any means

acceptable to the insurance commissioner of a change in legal name or address within thirty (30)

days of the change. Failure to timely inform the insurance commissioner of a change in legal

name or address may result in a penalty to be determined by the insurance commissioner.

      (g) In order to assist in the performance of the insurance commissioner's duties, the

insurance commissioner may contract with non-government entities, including the NAIC or any

affiliates or subsidiaries which the NAIC oversees, to perform any ministerial functions,

including the collection of fees, related to insurance producer licensing that the insurance

commissioner and the non-governmental entity may deem appropriate.

27-2.4-15. Commissions. -- (a) No insurer or insurance producer shall pay, directly or

indirectly, any commission, service fee, brokerage, or other valuable consideration to any person

for services as an insurance producer unless the person performing the service held a valid license

regarding the class or classes of insurance as to which the service was rendered at the time the

service was performed. No person, other than a person properly licensed in accordance with this

chapter at the time the person performs services as an insurance producer, shall accept any

commissions, service fee, brokerage, or other valuable consideration for the services. Acceptance

of the consideration shall constitute operating without a license. This section shall not prevent

payment or receipt of renewal or other deferred commissions to or by any person entitled to the

payment or receipt under this chapter.

      (b) No person shall accept a commission, service fee, brokerage or other valuable

consideration for selling, soliciting or negotiating insurance in this state if that person is required

to be licensed under this chapter and is not licensed.

      (c) Renewal or other deferred commissions may be paid to a person for selling, soliciting

or negotiating insurance in this state if the person was required to be licensed under this chapter at

the time of the sale, solicitation or negotiation and was licensed at that time.

      (d) An insurer or insurance producer may pay or assign commissions, service fees,

brokerages or other valuable consideration to an insurance agency or to persons who do not sell,

solicit or negotiate insurance in this state, unless the payment would violate this chapter or any of

the provisions of title 19 or this title sections 27-4-6, 27-6-46, 27-8-7, 27-9-44 and 27-29-4 of the

general laws of this state.

     SECTION 3. Sections 27-3.2-4 and 27-3.2-6 of the General Laws in Chapter 27-3.2

entitled "Continuing Education Requirements" are hereby amended to read as follows:

27-3.2-4. Educational requirements. -- (a) Any person holding a license issued pursuant

to this title and not exempt under section 27-3.2-3 shall, for each twelve (12) month period

beginning with the first renewal of the license, satisfactorily complete, as may be approved by the

insurance commissioner, courses or programs of instruction or attend seminars equivalent to a

minimum of fifteen (15) accumulated credit hours with a minimum of five (5) hours of each class

of insurance. satisfactorily complete continuing education courses in accordance with regulations

promulgated by the director.

(b) The courses or programs of instruction satisfactorily completed which shall be

deemed to meet the insurance commissioner's standards for continuing education requirements

and the number of classroom hours for which they are equivalent are:

(1) Any part of the life underwriter training council life course curriculum: fifty (50)

hours; health course: twenty-five (25) hours;

(2) Any part of the American college "CLU" diploma curriculum: thirty (30) hours;

(3) Any part of the Insurance Institute of America's program in general insurance:

twenty-five (25) hours;

(4) Any part of the American Institute for Property and Liability Underwriter's chartered

property casualty underwriter (CPCU) professional designation program: thirty (30) hours.

(5) Any part of the certified insurance counselor program: twenty-five (25) hours;

(6) Any insurance related course approved by the insurance commissioner taught by an

accredited college or university, per credit hour granted: fifteen (15) hours;

(7) Any part of the accredited advisor in insurance program: twenty-five (25) hours;

(8) Any part of the registered health underwriter (RHU) designation program: thirty (30)

hours;

(9) Any course or program of instruction or seminar developed and/or sponsored by any

authorized insurer, recognized agents' association, or insurance trade association, or any

independent program of instruction, shall, subject to the approval of the insurance commissioner

with the advice of the continuing education board as established by section 27-3.2-5, qualify for

the equivalency of the number of hours assigned to it by the insurance commissioner; and

(10) Any correspondence course approved by the insurance commissioner with the

advice of the continuing education board as established by section 27-3.2-5 shall qualify for the

equivalency of the number of classroom hours assigned to it by the insurance commissioner.

(c) A person teaching any approved course of instruction or lecturing at any approved

seminar shall qualify for the same number of classroom hours as would be granted to a person

taking and successfully completing that course, seminar, or program.

27-3.2-6. Compliance. -- (a) Any person licensed pursuant to this title and not exempt

under section 27-3.2-3 shall comply with all of the terms and requirements of this chapter and

regulations promulgated hereunder.

(b) Excess classroom hours accumulated during one renewal period may be carried

forward through the end of the next renewal period.

(c) The commissioner, for good cause shown, may grant an extension of time during

which the requirements of this chapter may be completed, but that extension of time shall not

exceed the period of one year.

(d) Every person subject to the provisions of this chapter shall furnish, in a form

satisfactory to the insurance commissioner, written certification as to the courses, programs, or

seminars of instruction taken and successfully completed by that person. The certification shall be

executed by or on behalf of the sponsoring organization.

     SECTION 4. This act shall take effect upon passage except for Section 3 which shall take

effect on January 1, 2007.

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LC01598

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