SB139INTRODUCED
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EJA32C-1
By Senator Shelnutt
RFD: Banking and Insurance
First Read: 23-Mar-23
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SYNOPSIS:
Under existing law, insurance producers,
independent adjusters, and title insurance agents are
required to complete a prelicensing course of study
approved by the Commissioner of Insurance prior to
taking the appropriate licensing examination.
This bill would delete the requirement for
insurance producers, independent adjusters, and title
insurance agents to complete a prelicensing course of
study prior to taking the appropriate licensing
examination.
Under existing law, service representatives are
employed by insurance producers in the sale of property
insurance.
This bill would eliminate the service
representative license in this state prospectively. The
bill would authorize a person holding a valid service
representative license on the effective date of this
act to continue to renew the license.
A BILL
TO BE ENTITLED
AN ACT
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Relating to the Alabama Department of Insurance; to
amend Sections 27-7-5, 27-7-14.1, 27-9A-6, 27-9A-8, 27-9A-9,
27-9A-11, 27-25-4.1, and 27-25-4.3, Code of Alabama 1975, to
delete the requirement for insurance producers, independent
adjusters, apprentice independent adjusters, and title
insurance agents to complete a prelicensing course of study
approved by the Commissioner of Insurance prior to licensure
by the department; and to eliminate the issuance of new
service representative licenses prospectively and to authorize
a current licensee to renew his or her license.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Sections 27-7-5, 27-7-14.1, 27-9A-6,
27-9A-8, 27-9A-9, 27-9A-11, 27-25-4.1, and 27-25-4.3, Code of
Alabama 1975, are amended to read as follows:
"§27-7-5
(a) An individual applying for a resident insurance
producer license shall make application to the commissioner on
the Uniform Application , and an individual applying for a
service representative license shall make application to the
commissioner on the application prescribed by the
commissioner, each declaring under penalty of refusal,
suspension, or revocation of the license that the statements
made in the application are true, correct, and complete to the
best of the individual's knowledge and belief. Before
approving the application, the commissioner shall find that
the individual has satisfied all of the following:
(1) The individual is at least 18 years of age.
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(2) The individual has not committed any act that is a
ground for denial, suspension, or revocation set forth in
Section 27-7-19.
(3) The individual has completed a prelicensing course
of study for the lines of authority for which the person has
applied, consisting of 20 classroom hours per line of
authority, or equivalent individual instruction, on the
general principles of insurance for that line of authority,
the course to be taught only by those educational
institutions, junior or senior colleges, technical colleges,
trade schools, insurance companies, or insurance trade
organizations which hold written authority from the
commissioner to issue certificates of completion.
a. Each authority holder must apply annually for the
continued authority to issue certificates under rules and
regulations to be prescribed by the commissioner.
b. Prior to writing the designated examination for
license, the applicant must furnish a certificate of
completion of the aforesaid prelicensing course from the
authorized educational institution, insurance company, or
insurance trade organization.
c. All applicants for a license to transact the life
lines of authority who are holders of the professional
designation chartered life underwriter (CLU); all applicants
for a license to transact the property lines of authority who
are holders of the professional designations chartered
property casualty underwriter (CPCU) or certified insurance
counselor (CIC); or other similar professional insurance
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designations as the commissioner may prescribe by regulation
shall be deemed to have completed the prelicensing course as
prescribed in this subdivision.
d. All applicants with a minimum of a bachelor's degree
with a major in insurance from an accredited college or
university are exempt from the requirements of this
subdivision for all lines of authority.
e. All applicants for a license to transact only the
following lines of authority shall be exempt from the
requirements of this subdivision:
1. Variable life and variable annuity products.
2. Limited lines insurance.
f. All producers and service representatives who are
lawfully licensed as such for a particular line of authority
immediately prior to January 1, 2013, are exempt from the
requirements of this subdivision for that line of authority
unless, after January 1, 2013, the license is permitted to
expire or is otherwise terminated and remains out of effect
for a period of 12 consecutive months, in which case the
exemption from the prelicensing course shall no longer be
applicable.
(4)(3) The individual has successfully passed the
examination for the lines of authority for which the
individual has applied, except that no examination shall be
required of an applicant as follows:
a. All applicants for a license to transact only one or
more of the limited lines insurance.
b. All applicants for a license to transact the
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variable life and variable annuity products line of authority.
c. All producers lawfully licensed as such for a
particular line of authority immediately prior to January 1,
2013, are exempt from the requirements of this subdivision for
that line of authority unless, after January 1, 2013, the
license is permitted to expire or is otherwise terminated and
remains out of effect for a period of 12 consecutive months,
in which case the exemption from examination shall no longer
be applicable.
d. All service representatives.
(5)(4) The individual has paid the fees set forth in
Section 27-4-2.
(6)(b) All producers seeking to be licensed for or
holding the variable life and variable annuity product line of
authority must also hold the life line of authority as an
insurance producer and must also successfully complete the
appropriate securities examinations and be registered under
applicable federal and state securities laws.
(b)(c) A business entity acting as an insurance
producer is required to obtain an insurance producer license.
Application shall be made using the Uniform Business Entity
Application. Before approving the application, the
commissioner shall find that the business entity has satisfied
all of the following:
(1) A licensed individual producer has been designated
responsible for the business entity's compliance with the
insurance laws, rules, and regulations of this state.
(2) The business entity has paid the fees set forth in
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Section 27-4-2.
(c)(d) The commissioner may require any documents
reasonably necessary to verify the information contained in an
application.
(d)(e) Each insurer that sells, solicits, or negotiates
any form of limited line credit insurance shall provide a
program of instruction to each individual whose duties will
include selling, soliciting, or negotiating limited line
credit insurance a program of instruction .
(f)(1) No new license as a service representative shall
be issued by the commissioner after the effective date of the
act adding this language.
(2) Any person holding a valid service representative
license on the effective date of the act adding this language
may continue to renew the license after that date if the
person otherwise meets the requirements of this section.
(3) If any service representative license expires and
is not renewed for a period of 12 consecutive months, the
license shall not be renewed by the commissioner or otherwise
reactivated."
"§27-7-14.1
(a) Unless denied licensure pursuant to Section
27-7-19, persons who have met the requirements of Sections
27-7-4.3 and 27-7-5 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
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in the event of death or dismemberment by accident and
benefits for disability income.
(2) ACCIDENT AND HEALTH OR SICKNESS, commonly known as
disability. 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, and surety.
(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 primarily
noncommercial purposes.
(7) CREDIT. Limited line credit insurance.
(8) BAIL BOND. Surety coverage for bail, as defined in
Chapter 13 of Title 15.
(9) RENTAL VEHICLE. As described in Section 27-7-5.1.
(10) CROP. Insurance providing protection against
damage to crops from unfavorable weather conditions, fire, or
lightning, flood, hail, insect infestation, disease or other
yield-reducing conditions or peril provided by the private
insurance market, or that is subsidized by the Federal Crop
Insurance Corporation, including Multi-Peril Crop Insurance.
(11) PORTABLE ELECTRONICS. As defined in Section
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27-22A-1.
(12) TRAVEL. As described in Section 27-7-5.2.
(13) Any other line of insurance permitted under state
laws or regulations.
(b) Unless denied licensure pursuant to Section
27-7-19, persons who have met the requirements of Section
27-7-5 shall be issued a service representative license. A
service representative shall receive qualification for a
license in the following lines of authority:
(1) PROPERTY. Insurance coverage for the direct or
consequential loss or damage to property of every kind.
(2) CASUALTY. Insurance coverage against legal
liability, including that for death, injury, or disability or
damage to real or personal property, and surety.
(c)(b) An insurance producer or service representative
license shall remain in effect unless revoked or suspended as
long as the license renewal fee set forth in Section 27-8A-9
is paid and education requirements for resident individual
producers and service representatives set forth in Chapter 8A
of this title are met by the due date.
(d)(c) An individual insurance producer who allows his
or her license to lapse may, within 12 months from the due
date of the renewal fee, may reinstate the same license
without the necessity of completing the prelicensing course or
passing a written examination; a service representative who
allows his or her license to lapse may, within 12 months from
the due date of the renewal fee, may reinstate the same
license without the necessity of completing the prelicensing
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course; however, a penalty in the amount of double the unpaid
renewal fee shall be required for any renewal fee received
after the due date.
(e)(d) A licensed insurance producer or service
representative 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 producer or service
representative may also request a waiver of any examination
requirement or any other fine or sanction imposed for failure
to comply with renewal procedures."
"§27-9A-6
(a) An individual applying for a resident independent
adjuster license shall apply to the commissioner on the
appropriate NAIC Uniform Individual Application and declare
under penalty of suspension, revocation, or refusal of the
license that the statements made in the application are true,
correct, and complete to the best of the individual's
knowledge and belief. Before approving the application, the
commissioner shall find that the individual meets all of the
following:
(1) Is at least 18 years of age.
(2) Is eligible to designate this state as his or her
home state.
(3) Has not committed any act that is a ground for
probation, suspension, revocation, or refusal of an
independent adjuster's license as set forth in Section
27-9A-12.
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(4) Has completed a prelicensing course of study for
the line of authority for which the person has applied.
(5)(4) Has successfully passed the examination for the
line of authority for which the personindividual has applied.
(6)(5) Has paid the fees set forth in Section 27-4-2.
(b) The commissioner may contract with non-governmental
entities, including the NAIC, to perform any ministerial
functions, including the collection of fees and data, related
to licensing that the commissioner may deem appropriate. The
commissioner may require that license applications, license
renewal applications, and supporting documentation be filed
and all required fees and charges be paid electronically
through systems operated or maintained by the non-governmental
entities.
(c) No resident of another state or of the District of
Columbia or of Canada may be licensed pursuant to this section
or may designate Alabama as his or her home state unless the
personindividual has successfully passed the independent
adjuster examination and has otherwise complied with the other
applicable portions of this section.
(d) A business entity applying for a resident
independent adjuster license shall apply to the commissioner
on the appropriate NAIC Uniform Business Entity Application
and declare under penalty of suspension, revocation, or
refusal of the license that the statements made in the
application are true, correct, and complete to the best of the
business entity's knowledge and belief. Before approving the
application, the commissioner shall find that the business
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entity meets all of the following :
(1) Is eligible to designate this state as its home
state.
(2) As applicable, has qualified or registered with the
office of the Secretary of State to engage in business in this
state.
(3) Has designated an individual independent adjuster
licensed in this state as responsible for the business
entity's compliance with this chapter and with the insurance
laws and rules of this state.
(4) Has not committed an act that is a ground for
probation, suspension, revocation, or refusal of an
independent adjuster's license as set forth in Section
27-9A-12.
(5) Has paid the fees set forth in Section 27-4-2.
(e) The commissioner may require any documents
reasonably necessary to verify the information contained in
the application."
"§27-9A-8
(a)(1) Every individual subject to the examination
required in subsection (b) shall first complete a prelicensing
course consisting of 20 classroom hours per line of authority,
or equivalent individual instruction.
(2) The prelicensing course shall have been completed
within 12 months before the date of the related examination as
shown on the certificate furnished by the prelicensing course
provider.
(3) Every prelicensing course provider shall apply
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annually for the continued authority to issue certificates of
completion under rules to be prescribed by the commissioner.
(4) At the time of initial approval and annually
thereafter, the commissioner shall collect from each
prelicensing course provider a fee set by the commissioner not
to exceed one hundred dollars ($100). The fee shall be
deposited in the State Treasury to the credit of the Insurance
Department Fund. Public institutions shall be exempt from
paying the fee, but shall otherwise be subject to the rules
applicable to other providers.
(b)(1)(a) An individual intending to apply for an
independent adjuster license shall pass a written examination
unless exempt pursuant to Section 27-9A-9.
(2)(b) The examination shall test the knowledge of the
individual concerning the lines of authority for which
application is made, the duties and responsibilities of an
independent adjuster, and the insurance laws and
regulationsrules of this state. Examinations required by this
section shall be developed and conducted under rules
prescribed by the commissioner.
(3)(c) Each individual applying for an examination
shall furnish a certificate of completion of the prelicensing
course from an authorized prelicensing course provider and pay
a non-refundable nonrefundable fee prescribed by the
commissioner as set forth in Section 27-4-2.
(4)(d) The commissioner may make arrangements,
including contracting with an outside testing service, for
administering examinations and collecting the nonrefundable
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fee set forth in Section 27-4-2.
(5)(e) An individual who fails to appear for the
examination as scheduled or fails to pass the examination
shall reapply for an examination and remit all required fees
and forms before being rescheduled for another examination.
(6)(f) No individual who has taken and failed to pass
two examinations given pursuant to this section for a
particular line of insurance shall be entitled to take any
further examination for that line of insurance until after the
expiration of three months from the date of the last
examination which the individual failed to pass. If the
individual fails to pass the examination after two more
attempts, the individual shall not be eligible to take any
further examination for that line of insurance until after the
expiration of six months from the date of the last
unsuccessful examination. An examination fee shall be paid for
each and every examination."
"§27-9A-9
(a) An individual applicant for an independent adjuster
license in this state shall not be required to complete any
prelicensing course or an examination if the person is
currently licensed in another state for the same line or lines
of authority based on an independent adjuster examination or
if such state license has expired and the application is
received by this state within 90 days of expiration. The
applicant shall either provide certification from the other
state that the applicant's license is currently in good
standing or was in good standing at the time of expiration or
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the state's producer database records maintained by the NAIC
must indicate that the applicant is or was licensed in good
standing. The certification must be of a license with the same
line of authority for which the individual has applied.
(b) A personAn individual licensed as an independent
adjuster in another state based on an independent adjuster
examination who, within 90 days of establishing legal
residency in this state, applies to become a resident
independent adjuster licensee pursuant to Section 27-9A-6
shall not be required to complete a prelicensing course or an
examination.
(c) An individual who applies for an independent
adjuster license in this state who was previously licensed as
an independent adjuster in this state shall not be required to
complete a prelicensing course or an examination, but this
exemption is only available if the application is received
within 12 months of the cancellation of the applicant's
previous license in this state and if, at the time of
cancellation, the applicant was in good standing in this
state.
(d) An individual applicant for an independent adjuster
license in this state shall not be required to complete a
prelicensing course or an examination if the applicant was
previously employed for a minimum of 20 years as an adjuster
in this state by an insurance company licensed in this state
and the applicant submits his or her application within 12
months of leaving the employment of the company. The insurance
company, upon request, shall certify to the department the
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time period that the applicant was employed by the insurance
company.
(e) An individual applicant for an independent adjuster
license in this state shall not be required to complete any
prelicensing course or examination if the applicant holds a
certification from a person or entity approved by the
commissioner that provides adjuster education and training and
that requires, as a prerequisite to certification, an
examination substantially equivalent to that of this state.
The applicant shall provide evidence of current
certification."
"§27-9A-11
(a) The apprentice independent adjuster license is a
temporary license for an individual residing in this state who
is qualified for an independent adjuster license except as to
having taken and passed for taking and passing the
prelicensing course and examination for independent adjuster .
(b) An individual applying for an apprentice
independent adjuster license shall apply to the commissioner
on the appropriate NAIC Uniform Individual Application and
declare under penalty of suspension, revocation, or refusal of
the license that the statements made in the application are
true, correct, and complete to the best of the individual's
knowledge and belief. Before approving the application, the
commissioner shall find that the individual meets all of the
following:
(1) Is at least 18 years of age.
(2) Is a resident of this state.
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(3) Has a business or mailing address in this state.
(4) Has not committed any act that is a ground for
probation, suspension, revocation, or denial of licensure as
set forth in Section 27-9A-12.
(5) Has paid the fees for an individual independent
adjuster license as set forth in Section 27-4-2.
(c) The apprentice independent adjuster license shall
be subject to all of the following terms and conditions:
(1) Accompanying the apprentice adjuster application
shall be an attestation from an independent adjuster licensed
in this state with the same lines of authority for which the
apprentice has applied certifying that the apprentice will be
subject to training, direction, and control by the licensed
independent adjuster and further certifying that the licensed
independent adjuster assumes responsibility for the actions of
the apprentice in the apprentice's capacity as an independent
adjuster. A licensed independent adjuster shall not supervise
more than five active apprentice adjuster licensees at any
given time.
(2) The apprentice independent adjuster is only
authorized to adjust claims in this state.
(3) The apprentice licensee is restricted to
participation in the adjusting of claims subject to the review
and final determination of the claim by the supervising
licensed independent adjuster.
(4) Compensation of an apprentice independent adjuster
shall be on a salaried or hourly basis only.
(5) At any time during the period of the license the
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apprentice independent adjuster may complete the prelicensing
course and take the examination required by Section 27-9A-8.
If the apprentice independent adjuster successfully completes
the independent adjuster examination, the apprentice
independent adjuster license shall automatically terminate and
an independent adjuster license shall be issued in place
thereof.
(6) The apprentice independent adjuster license is
valid for a period not to exceed 12 months and is
nonrenewable. An individual may only hold an apprentice
independent adjuster license once in his or her lifetime.
(7) An apprentice independent adjuster shall be subject
to Sections 27-9A-12, 27-9A-14, 27-9A-15, and Chapter 12 of
this title to the same extent as if licensed as an independent
adjuster in this state."
"§27-25-4.1
(a) The commissioner may contract with non-governmental
entities, including NAIC, to perform any ministerial
functions, including the collection of fees and data, related
to licensing that the commissioner may deem appropriate. The
commissioner may require that license applications, license
renewal applications, notices of appointments and appointment
terminations, and supporting documentation be filed and all
required fees and charges be paid electronically through
systems operated or maintained by the non-governmental
entities.
(b) An individual applying for a title insurance agent
license shall apply to the commissioner on the appropriate
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NAIC Uniform Individual Application and declare under penalty
of suspension, revocation, or refusal of the license that the
statements made in the application are true, correct, and
complete to the best of the individual's knowledge and belief.
Before approving the application, the commissioner shall find
that the individual meets all of the following :
(1) Is at least 19 years of age.
(2) Is a bona fide resident and citizen of this state
or is a full-time employee of a duly licensed title insurance
agent whose principal place of business is physically located
in this state.
(3) Has not committed any act that is a ground for
probation, suspension, revocation, or refusal of license as
set forth in Section 27-25-4.5.
(4) Has completed the prelicensing course of study for
title insurance as required in Section 27-25-4.3.
(5)(4) Has successfully passed the examination for
title insurance as required in Section 27-25-4.3.
(6)(5) Has paid the fees set forth in Section
27-25-4.7.
(c) A business entity applying for a title insurance
agent license shall apply to the commissioner on the
appropriate NAIC Uniform Business Entity Application and
declare under penalty of suspension, revocation, or refusal of
the license that the statements made in the application are
true, correct, and complete to the best of the business
entity's knowledge and belief. Before approving the
application, the commissioner shall find that the business
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entity meets all of the following :
(1) Is a domestic entity properly formed and existing
under Title 10A and whose principal place of business is
physically located in this state.
(2) Has designated an individual title insurance agent
licensed in this state as responsible for the business
entity's compliance with this chapter and with the insurance
laws, rules, and regulations of this state.
(3) Has not committed an act that is a ground for
probation, suspension, revocation, or refusal of license as
set forth in Section 27-25-4.5.
(4) Has paid the fees set forth in Section 27-25-4.7.
(d) The commissioner may require any documents
reasonably necessary to verify the information contained in
the application."
"§27-25-4.3
(a)(1) Every individual subject to the examination
required in subsection (b) shall first complete a prelicensing
course consisting of 20 classroom hours or equivalent
individual instruction on the general principles of title
insurance, the duties and responsibilities of a title
insurance agent, and the title insurance laws and regulations
of this state. The course shall be taught only by those
educational institutions, title insurers, or title insurance
trade organizations which hold written authority from the
commissioner.
(2) The prelicensing course must have been completed
within 12 months before the date of the examination as shown
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on the certificate furnished by the prelicensing course
provider.
(3) Every prelicensing course provider shall apply
annually for the continued authority to issue certificates of
completion under rules and regulations to be prescribed by the
commissioner.
(4) At the time of initial approval and annually
thereafter, the commissioner shall collect from each
prelicensing course provider the fee set forth in Section
27-25-4.7. Public institutions shall be exempt from paying the
fee but shall otherwise be subject to the rules and
regulations applicable to other providers.
(b)(1)(a)(1) An individual intending to apply for a
title insurance agent license shall first pass a written
examination unless exempt pursuant to subsection (c)(b).
(2) The examination shall test the knowledge of the
individual concerning title insurance, the duties and
responsibilities of a title insurance agent, and the insurance
laws of this state. Examinations required by this section
shall be developed and conducted under rules prescribed by the
commissioner.
(3) Each individual applying for an examination shall
furnish a certificate of completion of the prelicensing course
from an authorized prelicensing course provider and pay a
nonrefundable examination fee pursuant to Section 27-25-4.7.
(4) The commissioner may make arrangements, including
contracting with an outside testing service, for administering
examinations and collecting the nonrefundable fee prescribed
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by the commissioner, in which case the fees approved by the
commissioner for the examinations may be paid directly to the
outside testing service, and the fee shall be in lieu of, but
not in excess of, the fees for the examination set forth in
Section 27-25-4.7.
(5) An individual who fails to appear for the
examination as scheduled or fails to pass the examination
shall reapply for an examination and remit all required fees
and forms before being rescheduled for another examination.
(6) No individual who has taken and failed to pass two
examinations given pursuant to this section shall be entitled
to take any further title insurance agent examinations until
after the expiration of three months from the date of the last
examination which the individual failed to pass. If the
individual thereafter fails to pass the examination after two
more attempts, the individual shall not be eligible to take
any further title insurance agent examinations until after the
expiration of six months from the date of the last
unsuccessful examination. An examination fee shall be paid for
each and every examination.
(c)(b) An individual shall be exempt from the
examination requirement of subsection (b)(a) only as follows:
(1) If, within 90 days after January 1, 2013, the
applicant can establish to the satisfaction of the
commissioner that for a period of at least five years
preceding January 1, 2013, the applicant has been an
authorized signatory to commitments, title insurance policies,
and endorsements to title insurance policies issued by the
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title insurance agent on behalf of a title insurer properly
authorized to conduct the business of title insurance in this
state.
(2) If the individual was previously licensed as a
title insurance agent in this state after having passed the
examination required by subsection (b)(a) or being exempt from
the examination under subdivision (1), this exemption is
available only if the application is received within 12 months
of the cancellation of the applicant's previous license in
this state and if, at the time of cancellation, the applicant
was in good standing in this state."
Section 2. This act shall become effective on January
1, 2024, following its passage and approval by the Governor,
or its otherwise becoming law.
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