MISSISSIPPI LEGISLATURE

1999 Regular Session

To: Insurance

By: Representative Moore

AN ACT TO REQUIRE COMPLETION OF CERTAIN COURSES OF STUDY AND CONTINUING EDUCATIONAL REQUIREMENTS AS PREREQUISITES FOR LICENSING AND RENEWAL OF LICENSES AS INSURANCE AGENTS IN THE STATE OF MISSISSIPPI; TO PRESCRIBE THE BASIC PRELICENSING EDUCATIONAL AND CONTINUING EDUCATIONAL REQUIREMENTS FOR INSURANCE AGENTS; TO ESTABLISH STANDARDS BY WHICH PRELICENSING AND CONTINUING EDUCATION SHALL BE EVALUATED FOR AWARDING OF CREDIT; TO AMEND SECTIONS 83-17-101 AND 83-17-203, MISSISSIPPI CODE OF 1972, TO DEFINE THE TERM "INACTIVE AGENT"; AND FOR RELATED PURPOSES.

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

SECTION 1. (1) Every individual seeking to be licensed as a life, health and accident insurance agent in the State of Mississippi, as a condition of issuance of an original license, must furnish the Commissioner of Insurance certification on a form prescribed by the commissioner that he or she has completed an approved prelicensing course of study for the line of insurance requested.

(2) The prelicensing course of study hours shall consist of no less than twenty-four (24) classroom hours for life and/or health/accident insurance or property and casualty insurance. Twelve (12) classroom hours are required on life only; and twelve (12) classroom hours are required for health/accident only.

(3) Every individual seeking annual renewal of life, health and accident licenses, or annual renewal of property and casualty licenses, shall complete satisfactorily twelve (12) hours of study in approved courses in his primary line of insurance during each twelve-month period except the initially licensed year. The individual may take an additional twelve (12) hours in his secondary line of insurance.

(4) The continuing educational requirements of this section shall not apply to:

(a) Any individual that is exempt from taking the written examination as provided in Section 83-17-109(1)(b), (c) and (e);

(b) Any individual that is licensed with a license limited to industrial life, industrial health and accident, small loan property, industrial fire and full-coverage auto;

(c) A person not a resident of this state who meets the continuing educational requirement in the state in which such person resides and Mississippi has a reciprocal agreement with that state; or

(d) Inactive licensees as defined in Sections 83-17-101 and 83-17-203.

SECTION 2. (1) To qualify for credit towards satisfaction of the requirements of this section, an educational program must be a formal program of learning which contributes directly to the professional competence of the licensee and such program must meet the standards outlined herein for continuing educational programs. The subject of each course must be approved for the lines of insurance for which the licensee is granted educational credit.

(2) Formal programs requiring attendance or self-study may be considered for credit if:

(a) A detailed outline is prepared and presented to the Department of Insurance for approval;

(b) The program is at least two (2) credit hours in length, which each fifty (50) minute period being equal to one (1) credit hour;

(c) The program is conducted by a qualified instructor;

(d) A record of registration and attendance is maintained for a period of five (5) years and is available to the Department of Insurance for review; and

(e) If program is self-study, the agent must pass an exam.

(3) Continuing educational credit shall be allowed for service as an instructor of certified programs at any program for which participants are eligible to receive continuing educational credit. Credit for such service shall be awarded on the first presentation only unless a program has been substantially revised.

(4) The course must be directly related to life, health and accident insurance or property and casualty insurance. A business course of general nature, insurance marketing or sales course shall not be approved.

(5) The courses or programs of instruction successfully completed which shall meet the standards of the Commissioner of Insurance for continuing educational requirements for the year in which the course is taken are:

(a) Any part of the Life Underwriter Training Counsel Life Course Curriculum or Health Course;

(b) Any part of the American College "CLU-ChFC," "RHU-REBC" diploma or certificate curriculum;

(c) Any part of the Insurance Institute of America's programs;

(d) Any course as approved by the Department of Insurance for property and casualty insurance agents; and

(e) Any designated insurance course taught by an accredited college or university per credit hour granted.

(6) The commissioner specifically reserves the right to approve or disapprove credit for continuing education claimed under this section.

(7) The Commissioner of Insurance may require any original publisher or provider to submit all material to be used in his or her program to the Department of Insurance or his designee for review.

(8) All providers shall maintain a record of persons attending each course for not less than five (5) years and shall provide certificates of completion with hours earned to students upon their successful completion of each course. The certificate shall bear the course identification number as assigned by the Commissioner of Insurance or his designee.

(9) 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. (1) A prelicensing and continuing educational advisory committee, comprised of seven (7) individuals who are representatives from each segment of the life, health and accident industry and the property and casualty industry may be appointed by and shall serve at the pleasure of the Commissioner of Insurance to advise the commissioner concerning prelicensing and continuing educational standards. Each committee member shall agree to serve a minimum of two (2) years. The chairman of the committee shall be appointed by and shall serve at the pleasure of the commissioner.

(2) A majority of those present at any meeting of the educational advisory committee shall be a quorum for purposes of performing the duties of the committee under this section.

(3) The committee may advise the commissioner on program content and exceptions as permitted under this section.

(4) The committee shall be available to consider other related matters as the commissioner may assign.

SECTION 4. (1) Applications for original licenses shall be accompanied by a signed statement, under oath, on a form prescribed by the Commissioner of Insurance, listing the courses that were taken in compliance with this section or a certificate of attendance signed by the educational provider.

(2) Each licensee shall submit annually certificates of attendance signed by the continuing educational provider setting forth the program in which he has participated during the reporting period. Each licensee shall maintain a record of each continuing education certificate for a period of no less than five (5) years.

(3) The responsibility for establishing whether a particular course or other program for which credit is claimed is acceptable and meets the continuing educational requirements as set forth in this section rests solely on the licensee.

SECTION 5. The Commissioner of Insurance, upon written request, may grant exception to or extend the time in which a licensee must comply with the continuing educational requirements of this section for reasons of poor health, military service or other reasonable and just causes.

SECTION 6. (1) Any individual failing to meet the requirements of this section and who has not been granted an extension of time within which to comply or who has submitted to the Commissioner of Insurance a false or fraudulent certificate of compliance shall be subject to suspension or revocation of all licenses issued for any kind or kinds of insurance. The individual shall be notified of his right to a hearing. No further license shall be issued to such person for any kind or kinds of insurance until such time as the person has demonstrated to the satisfaction of the commissioner that he or she has complied with all requirements of this section and all other laws applicable thereto.

(2) The Commissioner of Insurance may suspend, revoke or refuse to renew a course provider's authority to offer courses for any of the following causes:

(a) Advertising that a course is approved before the commissioner has granted such approval in writing;

(b) Submitting a course outline with material inaccuracies, either in length, presentation time or topic content;

(c) Presenting or using unapproved material in providing an approved course;

(d) Failing to conduct a course for the full time specified in the approval request submitted to the commissioner;

(e) Preparing and distributing certificates of attendance or completion before the course has been approved;

(f) Issuing certificates of attendance or completion before the completion of the course;

(g) Failing to issue certificates of attendance or completion to any licensee who satisfactorily completes a course;

(h) Failing to notify promptly the Commissioner of Insurance of suspected or known improper activities; or

(i) Any violation of state law.

(3) A course provider is responsible for the activities of persons conducting, supervising, instructing, proctoring, monitoring, moderating, facilitating or in any way responsible for the conduct of any of the activities associated with the course.

(4) In addition, the Commissioner of Insurance may require any of the following upon a finding of a violation of this section:

(a) Refunding all course tuition and fees to licensees;

(b) Providing licensees with a suitable course to replace the course that was found in violation; or

(c) Withdrawal or approval of courses sponsored by such a provider for a period determined by the commissioner.

SECTION 7. 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 8. 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 9. This act shall take effect and be in force from and after July 1, 2000.