September 8, 2016, Introduced by Rep. Barrett and referred to the Committee on Insurance.
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),
as amended by 2008 PA 574.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1204b. (1) An insurance agent education advisory council
is
created within the department. of labor and economic growth. The
commissioner
director shall appoint the members of the council. The
council
shall be is composed of the following:
(a)
Two representatives of the national association National
Association
of insurance and financial advisors Insurance and
Financial Advisors - Michigan.
(b)
Two representatives of the Michigan association of
insurance
agents.Association of Insurance
Agents.
(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 director as an ex officio member.
(2)
Initially, the director shall
appoint 3 members shall be
appointed
for a term terms of
1 year, 3 members for a term terms
of
2
years, and the remaining members for a term terms of
3 years.
Thereafter,
members of the council shall serve for a term terms 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
director with respect to course materials, curriculum, and the
credentials of the instructors of each program of study registered
with
the commissioner pursuant to director
under section 1204a.
(b) Review continuing education programs of study under
section
1204c(3) 1204c(2) and make recommendations to the
commissioner
director on whether those programs meet the
requirements
in section 1204c(4).1204c(3).
(c)
Make recommendations to the commissioner director with
respect to educational requirements of insurance agents.
(4)
A member of the council or designee of the commissioner
shall
be permitted director may 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.
(1) (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. director.
The
commissioner director 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 director may
extend the licensure period for some licensees.
(2) (3)
Except as provided in subsections (10)
(9) to (13),
(12), and subject to subsection (13), before the review date of
each
applicable 2-year period provided for under subsection (2),
(1), 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
director or 24 hours of home study or online training
if
evidenced by successful completion of course work coursework
approved
by the commissioner. director.
Of the 24 hours of
continuing
education required, not less than 3 hours shall must be
in
ethics in insurance classes or course work.coursework.
(3) (4)
After reviewing recommendations
made by the insurance
agent education advisory council under section 1204b, the
commissioner
director shall approve a program of study if the
commissioner
director 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.
(4) (5)
A provider of a program of study
for insurance
producers
applying for approval or reapproval from the commissioner
director under this section shall file, on a form provided by the
commissioner,
director, 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 requires
the reapproval by of the
commissioner.
director. If the information in an application for
approval
or reapproval is insufficient for the commissioner
director to determine whether the program of study meets the
requirements
under subsection (4), (3),
the commissioner director
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. director. An
application
for approval or reapproval shall be is considered
approved
unless disapproved by the commissioner director 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, director, whichever
is later.
(5) (6)
A provider of a program of study
approved by the
commissioner
director under this section shall pay a provider
authorization fee of $500.00 for the first year the provider's
program
of study was is approved under this section and a $100.00
provider
renewal fee for each subsequent year thereafter that the
provider offers the approved program of study.
(6) (7)
A person dissatisfied with an
approved program of
study
may petition the commissioner director
for a hearing on the
program
or the commissioner director
on his or her own initiative
may
request a hearing on a program of study. If the commissioner
director
finds that the petition to
have been was submitted in good
faith, that the petition if true shows that the program of study
does
not satisfy the criteria in subsection (4), (3), or
that the
petition
otherwise justifies holding a hearing, the commissioner
director
shall hold a hearing pursuant to under 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 on
not less than 10 days' written notice to the petitioner and the
provider
of the program of study. If the commissioner director
requests a hearing on a program of study on his or her own
initiative,
the commissioner director shall hold a hearing pursuant
to
under chapter 4 of the administrative procedures act of
1969,
1969
PA 306, MCL 24.271 to 24.287, upon on not less than 10 days'
written notice to the provider of the program of study.
(7) (8)
If after a hearing under subsection
(7) (6) the
commissioner
director finds that the program of study does not
satisfy
the requirements under subsection (4), (3), the
commissioner
director 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 on
which the commissioner
director will revoke approval of the program of study, which date
shall
must be within a reasonable time of the issuance of the
order.
(8) (9)
A certificate of attendance or
instruction of in an
approved program of study or a certificate of successful completion
of
course work shall coursework
must be filed as directed by the
commissioner
director on a form prescribed by the commissioner
director
and shall must 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.
coursework. 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
director within 30 days after the insurance producer
completes
the program. A copy of the form shall must also be mailed
first-class to the insurance producer who attended, taught, or
successfully
completed the program of study. The commissioner
director may enter into contracts to provide for the administrative
functions of this subsection.
(9) (10)
The commissioner director 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 because
of military service or
if
the commissioner director determines that enforcement of the
requirements
would cause a severe hardship. The commissioner
director 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.
(10) (11)
The commissioner director may
enter into reciprocal
continuing education agreements with insurance commissioners from
other states.
(11) (12)
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 has 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
director
shall cancel the insurance producer's
license. shall be
canceled.
An insurance producer whose license
has been canceled
under this section may reapply for a license to act as an insurance
producer under section 1204, except that the director shall not
waive the program of study requirements under section
1204. shall
not
be waived.
(12) (13)
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). (1). 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 a license to act as an
insurance producer under section 1204.
(13) For a review date after December 31, 2016 of an
applicable 2-year period under subsection (1), all of the following
apply:
(a) Subject to subdivisions (b) and (c), if an insurance
producer attends or instructs more than 24 hours of continuing
education classes required under subsection (2) in an applicable 2-
year period, each hour more than 24 hours in the applicable 2-year
period must be carried over to the next review date. However, no
more than 12 hours may be carried over to the next review date
under this subdivision.
(b) The carryover described in subdivision (a) does not apply
to an ethics in insurance class or coursework.
(c) If an insurance producer attends or instructs the same
continuing education class in an applicable 2-year period, an hour
associated with a duplicative class does not apply to the carryover
described in subdivision (a).
(14) 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, or accident and health or a combination of
life, limited life, mortgage redemption, or accident and health.
(d) "Property-casualty agent" means a resident or nonresident
individual insurance producer or solicitor licensed for automobile,
fire, multiple lines, or any limited or minor property and casualty
lines or a combination of automobile, fire, multiple lines, or
limited or minor property and casualty lines.