MISSISSIPPI LEGISLATURE

1998 Regular Session

To: Insurance

By: Senator(s) Kirby

AN ACT TO AMEND SECTION 83-17-101, TO DEFINE THE TERM "INACTIVE AGENT" IN RELATION TO THE REGULATION OF AGENTS FOR LIFE, HEALTH OR ACCIDENT INSURERS; TO AMEND SECTION 83-17-117, MISSISSIPPI CODE OF 1972, TO REQUIRE LIFE, HEALTH AND ACCIDENT INSURANCE AGENTS TO PARTICIPATE IN A CONTINUING EDUCATION PROGRAM; TO AMEND SECTION 83-17-203, MISSISSIPPI CODE OF 1972, TO DEFINE THE TERM "INACTIVE AGENT" IN RELATION TO THE REGULATION OF AGENTS FOR PROPERTY AND CASUALTY INSURERS; TO AMEND SECTION 83-17-205, MISSISSIPPI CODE 01 1972, TO REQUIRE PROPERTY AND CASUALTY INSURANCE AGENTS TO PARTICIPATE IN A CONTINUING EDUCATION PROGRAM; AND FOR RELATED PURPOSES. 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. Section 83-17-101, Mississippi Code of 1972, is amended as follows:

83-17-101. Whenever used in this article, certain terms shall be defined as follows:

(a) The term "agent" shall include all individuals, partnerships, and any corporation, who act in any manner, directly or indirectly, as such in the solicitation of, negotiation for, or procurement or making of a contract of life, health or accident insurance, or making of an annuity contract, and includes hospital service association agents; except that the term "agent" shall not include any regular salaried officer or employee of a licensed insurer or of a licensed insurance agent who does not solicit or accept from the public applications for any such contract. A regular salaried officer or employee of an insurer authorized to do business in this state shall not be deemed to be an "agent" by reason of rendering assistance to or on behalf of a licensed insurance agent, provided that such salaried officer or employee devotes substantially all of his time to activities other than the solicitation of applications for life, health or accident insurance or annuity contracts and receives no commission or other compensation directly dependent upon the amount of business obtained. The possessor of an insurable interest in any risk or subject of insurance shall not be deemed an agent by reason of procuring or maintaining, or agreeing to procure or maintain, insurance extending to such interests, together with the interest or interests of others in such risk or subject of insurance, however the cost may be borne.

(b) The term "inactive agent" shall mean an individual who is retired, disabled or has not obtained from the Commissioner of Insurance a current continuous certificate. An inactive agent shall not solicit new business or service existing business, but may receive renewal commissions.

(c) The term "supervising general agent" as used in this article refers to and includes any person, partnership, association or corporation, having authority to serve as trustees, managers or administrators, except attorneys at law, for such licensed insurance companies or their insureds in the handling of insurance programs underwritten by such licensed insurance companies, or in which they may be participating.

(d) The term "insurance contract" shall mean any contract or policy affecting life, health or accident insurance or any annuity contract on behalf of any company or insurer engaged in the business of writing life, health or accident insurance or annuity contracts.

(e) The term "excess risk" shall mean all or any portion of a life, health or accident insurance risk or contract of annuity for which application is made to an agent and which exceeds the amount of insurance or annuity which will be provided by the insurer for which such agent is licensed.

(f) The term "rejected risk" shall mean a life, health or accident insurance risk or annuity contract for which application has been made to an agent and which insurance or annuity contract is declined by the insurer for which such agent is licensed.

(g) The term "commissioner" shall mean the Commissioner of Insurance of the State of Mississippi.

(h) The terms "company" and "insurer" shall mean a corporation, association, hospital and/or medical service association, exchange, order or society writing life, health and accident and/or hospital insurance or annuity contracts, but shall not include fraternal societies as defined in Section 83-29-1.

(i) The term "person" shall mean any individual, partnership or corporation incorporated pursuant to Sections 79-10-1 through 79-10-117, being the Mississippi Professional Corporation Act, and Sections 79-29-901 through 79-29-933, being the Mississippi Limited Liability Company Act, except as otherwise limited by Section 83-17-105.

SECTION 2. Section 83-17-117, Mississippi Code of 1972, is amended as follows:

83-17-117. (1) Each license issued to an agent shall expire on January 1 following the date of issue, unless prior thereto it is revoked or suspended by the commissioner.

(2) Each agent shall file an application for renewal of license on the form and in the manner prescribed by the commissioner for such purpose. Upon the filing of such application for renewal of license and the payment of the required fees, the current license shall continue to be in force until the renewal license is issued by the commissioner or until the commissioner has refused for cause to issue such renewal license, as provided in Section 83-17-123, and has a given notice of such refusal in writing to the agent.

(3) Each agent seeking annual renewal of a license under this article shall participate in a continuing education program as designated by the Commissioner of Insurance. This requirement

(a) Limited licenses not currently meeting educational requirements;

(b) Inactive licensees who have not obtained from the Commissioner of Insurance a current continuous certificate as provided in Section 83-17-5; and

(c) Licensees who, on or before July 1, 1998, have possessed an active license from the Mississippi Department of Insurance for a continuous period of ten (10) years.

(4) The Commissioner of Insurance may, in his discretion, designate an independent evaluation educational service to evaluate and administer education programs, subject to his direction and approval. The evaluation fee charged by such educational service shall be paid by the applicant to the service.

SECTION 3. Section 83-17-203, Mississippi Code of 1972, is amended as follows:

83-17-203. The terms "agent" and "solicitor" as used in this article refer to and include all persons, residents of this state, engaged in any of the activities enumerated in Section 83-17-201, but do not include (1) persons employed by insurance agents or agencies or companies solely for the performance of clerical, stenographic, and similar office duties, or (2) the supervising general, state, special agents or others similarly employed by a supervising general agent or insurance company or carrier, neither of whom shall be eligible to apply for or secure a certificate of authority or license as a resident countersigning agent as defined herein or in other provisions of the insurance laws of this state; and said "supervising general, state, special agents" as used in this article refer to and include all persons, firms, partnerships, and corporations having authority to appoint or supervise resident local agents in this state on behalf of insurance companies; but nothing contained in this subsection (2) shall prohibit the licensing as an agent of a person appointed to act as agent for a company operating through agents who represent only one (1) company or group of companies under the same control or management; or (3) the attorney-in-fact or the traveling salaried representative of a reciprocal insurance exchange; the term "attorney-in-fact" or the "traveling salaried representative" as used in this article refers to and includes all persons, not otherwise licensed under the provisions of this article, who represent or are employed by any underwriter, association, or reciprocal insurance exchange writing policies in Mississippi other than through resident agents, who in any manner solicit business on behalf of such underwriters, associations, or reciprocal insurance exchanges. It is expressly provided, however, that this section shall not prevent the licensing of any person now licensed as an agent who would, but for the provisions of subsection (2) hereof be eligible for such license; provided further, a local agent operating as a general agent may be licensed in such dual capacity so long as the general agency is operated in connection with a local agency, or where the owners or majority of the stockholders have a substantial interest in such local and general agency.

The term "inactive agent" shall mean an individual who is retired, disabled or has not obtained from the Commissioner of Insurance a current continuous certificate. An inactive agent shall not solicit new business or service existing business, but may receive renewal commissions.

The term "insurance solicitor" as used in this article refers to and includes any person, a resident of this state, directly connected with and principally employed by and authorized by an insurance agent to solicit and negotiate or assist in any manner in the sale and issuance of policies or contracts of insurance solely on behalf of such agents; and no license shall be renewed for any solicitor unless it is conclusively shown that more than fifty percent (50%) of his total annual employment income for the preceding year is derived from commissions on insurance; and for the purposes of this article, life, accident and health insurance commissions shall be included in calculating said fifty percent (50%). The agent appointing such solicitor shall be responsible for the acts of the solicitor. Any violation of the insurance laws by the solicitor may be grounds for revocation of license of both the agent and the solicitor after proper hearing. The commission of any unlawful act by the solicitor shall be prima facie evidence that the agent had knowledge of such act.

The term "insurance agent" as used in this article refers to and includes all insurance agents not thus employed as "insurance solicitors." No license or renewal license as a resident local agent shall be granted to any person to act as said agent who is not actively engaged therein by soliciting and servicing the insurance-buying public as an agent individually, or as a bona fide employee of an agent or agency; and no renewal license shall be issued to any agent until it is conclusively shown by filing an affidavit with the commissioner of insurance or otherwise that not more than thirty-five per cent (35%) of the aggregate amount of commissions of the said agent was derived from "controlled business" as referred to and defined hereinafter.

The terms "insurance company" and "insurance carrier" as used in this article refer to and include all stock, mutual, reciprocal, and other types of insurance companies, carriers, associations, or exchanges writing the type or types of insurance to which this article applies.

SECTION 4. Section 83-17-205, Mississippi Code of 1972, is amended as follows:

83-17-205. (1) Before the issuance of a license or certificate of authority under the provisions of this article, the applicant, who shall be a natural person, resident of this state, at least twenty-one (21) years of age, and the company or companies which the applicant proposes to represent shall file with the commissioner evidence in such form as the commissioner shall have prescribed, showing that the applicant is qualified, fit and trustworthy to act as an agent and to solicit the kind or kinds of insurance for which a license is requested; and the applicant shall submit evidence in such form as may be required by the commissioner of his intent to act in good faith as an agent and that he is not seeking a license for the purpose of acquiring or saving commissions, premiums or other valuable considerations on policies of insurance to be issued to himself or to his relatives, business associates, employers or employees, or in which they or either of them have an interest. In the event the applicant has not been previously licensed within the last two (2) years as an agent for the kind or kinds of insurance for which a license is requested, the commissioner shall, as a test of the applicant's knowledge and other qualifications provided for herein, require that the applicant submit to a written examination approved by the commissioner which shall cover the type of license desired, whether the same be a general license to apply to all lines or a limited license applicable to grouping by type, types or kinds as set out hereinafter. Any license issued under this article shall state the kind or kinds of insurance which the agent is authorized to write.

(2) In addition to requirements set out in subsection (1) of this section, the commissioner shall require such company requesting appointment of the applicant as agent for the first time to furnish a certificate to the commissioner, verified by an executive officer or managing general or special agent of such company, that the company has duly investigated the character and record of such person and has satisfied itself that such person is of good moral character and is qualified, fit and trustworthy to act as its agent. The Commissioner of Insurance may at any time require any company to obtain a credit report on an agent if the commissioner deems such request advisable.

Should such credit report reflect information regarding an offense or violation in relation to which the Department of Insurance has taken action, such information shall not render applicant ineligible for license if applicant has complied with the order of the commissioner regarding such offense.

(3) No license shall be issued to any applicant nor shall the Commissioner of Insurance issue a renewal of any license as agent or solicitor until the new or renewal applicant shall file an affidavit with the Commissioner of Insurance that the applicant shall in good faith engage in the insurance business as agent or solicitor, and that he is not seeking a license for the purpose of acquiring or saving commissions, premiums or other valuable considerations on "controlled business"; that is, on policies of insurance to be issued to himself or to his relatives, business associates, employers or employees, or in which they or either of them have an interest. The title retained in connection with conditional sales or title retention contracts shall not be construed to constitute "an interest" in the seller within the meaning of this article. A violation of this provision of this section shall be deemed to be probable if the commissioner finds that during any twelve-month period aggregate commissions or other compensations accruing in favor of the applicant based upon the insurance procured or to be procured by or through the applicant with respect to his own interests or those of his family, relatives, employers, employees or business associates, as provided herein, have exceeded or will exceed thirty-five percent (35%) of the aggregate amount of commissions or compensations accruing to him as agent or his agency during such period of time.

Nothing herein contained shall prohibit the licensing under a limited license as to motor vehicle physical damage insurance, any person employed by or associated with a motor vehicle sales agency with respect to insurance on a motor vehicle sold, serviced or financed by it. Whenever employment is terminated of any such person employed by or associated with any such agency, the Commissioner of Insurance shall be notified, and the license shall be cancelled immediately.

It is further provided that the provisions of this section likewise shall not apply with respect to the interest of a real estate mortgagee in or as to insurance covering such interest or in the real estate subject to such mortgage.

(4) Each application or filing made under this section shall include the Social Security number(s) of the applicant in accordance with Section 93-11-64, Mississippi Code of 1972.

(5) Each agent seeking annual renewal of a license under this article shall participate in a continuing education program as designated by the Commissioner of Insurance. This requirement

(a) Limited licenses not currently meeting educational requirements;

(b) Inactive licensees who have not obtained from the Commissioner of Insurance a current continuous certificate as provided in Section 83-17-5; and

(c) Licensees who, on or before July 1, 1998, have possessed an active license from the Mississippi Department of Insurance for a continuous period of ten (10) years.

(6) The Commissioner of Insurance may, in his discretion, designate an independent evaluation educational service to evaluate and administer education programs, subject to his direction and approval. The evaluation fee charged by such educational service shall be paid by the applicant to the service.

SECTION 5. This act shall take effect and be in force from and after July 1, 1998.