MISSISSIPPI LEGISLATURE
2005 Regular Session
To: Insurance
By: Senator(s) Kirby
AN ACT TO CREATE A LIMITED LINES LICENSE FOR TERM LIFE INSURANCE; TO DEFINE "TERM LIFE INSURANCE" AND TO PROVIDE THE QUALIFICATIONS FOR SUCH LICENSE; TO REQUIRE PRELICENSE TRAINING, CONTINUING EDUCATION AND PAYMENT OF LICENSE FEE; TO AMEND SECTIONS 83-17-39, 83-17-61 AND 83-17-63, MISSISSIPPI CODE OF 1972, TO EXEMPT TERM LIFE LICENSEES FROM THESE PROVISIONS; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Limited licenses for term life insurance. (1) An individual who is at least eighteen (18) years of age and whom the Commissioner of Insurance considers to be competent, trustworthy and of good business reputation may obtain a limited lines producer license to transact only term life insurance as provided in this section. Term life insurance, for purposes of this section, means a life insurance policy that:
(a) Does not develop nonforfeiture values; and
(b) Is not convertible into an annuity or a life insurance policy that develops nonforfeiture values.
(2) A term life licensee shall not sell, solicit or negotiate any kind of insurance other than term life insurance unless expressly authorized to do so under a license issued by the commissioner.
(3) A term life licensee may not receive compensation unless the licensee introduces the prospective insured seeking replacement insurance to a licensed insurance producer. Replacement insurance, for purposes of this section, means any transaction in which new term life insurance will be purchased, and it is known or should be known to the term life licensee that by reason of such transaction, existing life insurance has been or is to be:
(a) Lapsed, forfeited, surrendered or otherwise terminated;
(b) Converted to reduced paid-up insurance, continued as extended term insurance, or otherwise reduced in value by the use of nonforfeiture benefits or other policy values;
(c) Amended so as to effect either a reduction in benefits or in the term for which coverage would otherwise remain in force, or for which benefits would be paid;
(d) Reissued with any reduction in cash value; or
(e) Pledged as collateral or subjected to borrowing, whether in a single loan or under a schedule of borrowing over a period of time for amounts in the aggregate exceeding twenty-five percent (25%) of the loan value set forth in the policy.
(4) A term life license shall not be used by the term life licensee as a basis for obtaining a nonresident limited line license in any other state pursuant to any law of such other state that permits a person licensed as a limited lines producer in the person's home state to receive a nonresident limited lines producer license in the other state.
(5)
The application for a term life license must be submitted on a form
prescribed by the commissioner by a designee of the insurance company
appointing the applicant. The
appointing insurance company must certify that the applicant has completed at
least ten (10) hours of prelicense training regarding term life insurance
provided by the appointing insurance company and must pay the fee required by
Sections 27-15-87 and 27-15-93.
(6)
A term life licensee may represent more than one (1) insurance company.
(7) An applicant who has met the requirements of this section shall be issued a perpetual term life license.
(8) A term life license shall remain in effect as long as the appointing insurance company pays the respective fees required by Sections 27-15-87 and 27-15-93 prior to January 1 of each year, unless the license is revoked or suspended pursuant to Section 83-17-71. Failure of the insurance company to pay the license fee or to submit the required documents shall cause immediate termination of the term life license with respect to which the failure occurs.
(a) Before each license renewal, a term life licensee shall satisfactorily complete at least ten (10) hours of continuing education approved by the commissioner. The insurance company shall retain a certification that the licensee has completed the required continuing education along with the renewal fee.
(b) A term life license automatically terminates when the term life licensee fails to meet successfully the requirements of paragraph (a) of this subsection.
(9) A term life license may be terminated by the insurance company or the licensee.
(10) A term life licensee is not subject to the requirements of Sections 83-17-39, 83-17-61 and 83-17-63.
(11) A term life license shall contain the name, address and personal identification number of the licensee, the date the license was issued, general conditions relative to the license expiration or termination, and any other information the commissioner considers proper. A term life license shall also contain the name and address of the appointing insurance company.
(12) A term life licensee must inform the commissioner by any means acceptable to the commissioner of a change of address within thirty (30) days after the change.
SECTION 2. Section 83-17-39, Mississippi Code of 1972, is amended as follows:
83-17-39. (1) Each applicant for a license to act as a producer within this state shall submit to a personal written examination to determine his competence to act as a producer and his familiarity with the pertinent provisions of the laws of this state, and shall pass the same to the satisfaction of the commissioner; except that no such written examination shall be required of:
(a) An applicant for a renewal license unless the commissioner determines that such examination is necessary to establish the competency of the applicant, or unless a license had not been effective as to such applicant within one (1) year preceding the date of filing the application;
(b) An applicant who is a ticket-selling agent of a railroad or steamship company, carrier by air, or public bus carrier who shall act as a producer or solicitor in the sale of accident insurance tickets to individuals;
(c) An applicant who shall be licensed to act only as a producer with respect to life, health and accident insurance on borrowers or debtors commonly known as credit life, health and accident insurance;
(d) In the discretion of the commissioner, an applicant whose license to do business or act as a producer in this state was suspended less than one (1) year prior to the date of application;
(e) An applicant who is an agent of a fraternal benefit society exclusively;
(f) An applicant who is exempt from examination under the provisions of Section 83-17-67; or
(h) An applicant who shall be licensed to act only as a producer with respect to term life insurance.
(2) The commissioner may establish rules and regulations with respect to the classification of applicants according to the type of insurance contracts to be effected by them if licensed as producers, and with respect to the scope, type and conduct of written examinations to be given pursuant to this section, and the times and places within this state for the holding of such examinations. Such rules and regulations, if established, shall classify applicants for purposes of this section as follows:
(a) Those desiring to write life insurance;
(b) Those desiring to write accident and health insurance, other than industrial accident and health insurance;
(c) Those desiring to write industrial accident and health insurance;
(d) Those desiring to write any combination of two (2) or more of the above classifications; and
(e) Those of such other classification as, in the opinion of the commissioner, are necessary or appropriate.
Examination shall be prepared and given in those subjects only which pertain to the classification or classifications which the applicant desires to write, and no applicant shall be required to take an examination on a subject or subjects pertaining to any other classification.
The rules and regulations of the commissioner, if established, shall designate textbooks, manuals and other materials to be studied by applicants in preparation for examination in each classification designated by the commissioner pursuant to this section. Such textbooks, manuals or other materials may consist of matter available to applicants by purchase from the publisher, or may consist of matter prepared at the direction of the commissioner and distributed to applicants upon request therefor and payment of the reasonable cost thereof. If textbooks, manuals or other materials shall have been designated or prepared by the commissioner pursuant to this section, all examination questions shall be prepared from the contents of such textbooks, manuals or other materials.
SECTION 3. Section 83-17-61, Mississippi Code of 1972, is amended as follows:
83-17-61. (1) A person applying for a resident insurance producer license shall make application to the commissioner on the uniform application and declare 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:
(a) Is at least eighteen (18) years of age;
(b) Has not committed any act that is a ground for denial, suspension or revocation set forth in Section 83-17-71;
(c) Where required by the commissioner, has completed a prelicensing course of study for the lines of authority for which the person has applied;
(d) Has paid the fees set forth in Sections 27-15-87 and 27-15-93; and
(e) Has successfully passed the examinations for the liens of authority for which the person has applied.
(2) 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:
(a) The business entity has paid the fees set forth in Sections 27-15-85 and 27-15-93; and
(b) The business entity has designated a licensed producer responsible for the business entity's compliance with the insurance laws, rules and regulations of this state.
(3) The commissioner may require any documents reasonably necessary to verify the information contained in an application.
(4) Each insurer that sells, solicits or negotiates any form of limited line credit insurance shall provide to each individual whose duties include selling, soliciting or negotiating limited line credit insurance a program of instruction that may be approved by the commissioner.
(5) This section shall not apply to applicants who shall be licensed to act only as a producer with respect to term life insurance in accordance with Section 1 of Senate Bill No. 2617, 2005 Regular Session.
SECTION 4. Section 83-17-63, Mississippi Code of 1972, is amended as follows:
83-17-63. (1) Unless denied licensure under Section 83-17-71, persons who have met the requirements of Sections 83-17-59 and 83-17-61, 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:
(a) 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.
(b) Accident and health or sickness: insurance coverage for sickness, bodily injury or accidental death and may include benefits for disability income.
(c) Property: insurance coverage for the direct or consequential loss or damage to property of every kind.
(d) Casualty: insurance coverage against legal liability, including that for death, injury or disability or damage to real or personal property.
(e) Variable life and variable annuity products: insurance coverage provided under variable life insurance contracts and variable annuities.
(f) Personal lines: property and casualty insurance coverage sold to individuals and families for primarily noncommercial purposes.
(g) Credit: limited line credit insurance.
(h) Any other line of insurance permitted under state laws or regulations.
(2) An insurance producer license shall remain in effect unless revoked or suspended as long as the fee set forth in Sections 27-15-87 and 27-15-93 is paid and education requirements for resident individual producers are met by the due date.
(3) An individual insurance producer who allows his or her license to lapse may, within twelve (12) months from the due date of the renewal fee, reinstate the same license without the necessity of passing a written examination. The penalty for such late renewal shall be in compliance with Section 27-15-215.
(4) A licensed insurance producer who is unable to comply with license renewal procedures due to military service or some other extenuating circumstances, including, but not limited to, a long-term medical disability may request a waiver of those procedures. The producer may also request a waiver of any examination requirement or any other fine or sanction imposed for failure to comply with renewal procedures.
(5) The license shall contain the licensee's name, address, personal identification number and the date of issuance, the lines of authority, the expiration date and any other information the commissioner deems necessary.
(6) Licensees shall inform the commissioner by any means acceptable to the commissioner of a change of address within thirty (30) days of the change. Failure to timely inform the commissioner of a change in legal name or address shall result in a penalty under Section 83-17-71.
(7) In order to assist in the performance of the commissioner's duties, the commissioner may contract with nongovernmental entities, including the National Association of Insurance Commissioners (NAIC) or any affiliates or subsidiaries that the NAIC oversees, to perform any ministerial functions, including the collection of fees, related to producer licensing that the commissioner and the nongovernmental entity may deem appropriate.
(8) This section shall not apply to persons licensed to act only as a producer with respect to term life insurance in accordance with Section 1 of Senate Bill No. 2617, 2005 Regular Session.
SECTION 5. This act shall take effect and be in force from and after July 1, 2005.