Senate Bill 2816

AN ACT TO AMEND SECTION 83-17-5, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT AN INSURANCE AGENT MUST OBTAIN AN AGENT'S CERTIFICATE OF AUTHORIZATION BUT NOT A CONTINUOUS CERTIFICATE OF AUTHORIZATION; TO AMEND SECTION 83-17-71, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR PENALTIES ON INSURANCE AGENTS WHO KNOWINGLY ACCEPT INSURANCE BUSINESS FROM AN INDIVIDUAL WHO IS NOT LICENSED OR APPOINTED; TO AMEND SECTION 83-17-75, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT AN INSURANCE PRODUCER WHO IS NOT ACTING AS AN AGENT OF AN INSURER IS NOT REQUIRED TO BECOME APPOINTED; TO REPEAL SECTION 83-17-43, MISSISSIPPI CODE OF 1972, WHICH REQUIRES ALL INSURANCE SOLICITORS TO FILE WITH THE COMMISSIONER OF INSURANCE AN APPLICATION FOR CERTIFICATE OF APPOINTMENT AS SOLICITOR; AND FOR RELATED PURPOSES.

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

SECTION 1. Section 83-17-5, Mississippi Code of 1972, is amended as follows:

83-17-5. Every agent of any insurance company, fraternal order or association authorized to do business in this state shall be required to obtain from the Commissioner of Insurance a * * * certificate under the seal of his office showing that the company for which he or she is licensed to do business in this state, and that he or she is an agent of said company and duly authorized to do business for it. Such certificate shall remain valid as long as the insurance company, fraternal order or association pays to the commissioner an annual certificate fee to continue the authorization. The insurance company, fraternal order or association must notify the agent within thirty (30) days if the authority is nonrenewed or cancelled.

SECTION 2. Section 83-17-71, Mississippi Code of 1972, is amended as follows:

83-17-71. (1) The commissioner may place on probation, suspend, revoke or refuse to issue or renew an insurance producer's license or may levy a civil penalty in an amount not to exceed One Thousand Dollars ($1,000.00) per violation and such penalty shall be deposited into the special fund of the State Treasury designated as the "Insurance Department Fund" for any one or more of the following causes:

(a) Providing incorrect, misleading, incomplete or materially untrue information in the license application;

(b) Violating any insurance laws, or violating any regulation, subpoena or order of the commissioner or of another state's commissioner;

(d) Improperly withholding, misappropriating or converting any monies or properties received in the course of doing insurance business;

(e) Intentionally misrepresenting the terms of an actual or proposed insurance contract or application for insurance;

(f) Having been convicted of a felony;

(g) Having admitted or been found to have committed any insurance unfair trade practice or fraud;

(h) Using fraudulent, coercive or dishonest practices or demonstrating incompetence, untrustworthiness or financial irresponsibility in the conduct of business in this state or elsewhere;

(i) Having an insurance producer license, or its equivalent, denied, suspended or revoked in any other state, province, district or territory;

(j) Forging another's name to an application for insurance or to any document related to an insurance transaction;

(k) Improperly using notes or any other reference material to complete an examination for an insurance license;

(l) Knowingly accepting insurance business from an individual who is not licensed or appointed;

(m) Failing to comply with an administrative or court order imposing a child support obligation; or

(n) Failing to pay state income tax or comply with any administrative or court order directing payment of state income tax.

(2) If the action by the commissioner is to nonrenew or to deny an application for a license, the commissioner shall notify the applicant or licensee and advise, in writing, the applicant or licensee of the reason for the denial or nonrenewal of the applicant's or licensee's license. The applicant or licensee may make written demand upon the commissioner within ten (10) days for a hearing before the commissioner to determine the reasonableness of the commissioner's action. The hearing shall be held within thirty (30) days.

(3) The license of a business entity may be suspended, revoked or refused if the commissioner finds, after hearing, that an individual licensee's violation was known or should have been known by one or more of the partners, officers or managers acting on behalf of the partnership or corporation and the violation was neither reported to the commissioner nor corrective action taken.

(4) In addition to, or in lieu of, any applicable denial, suspension or revocation of a license, a person may, after hearing, be subject to a civil fine not to exceed One Thousand Dollars ($1,000.00) per violation and such fine shall be deposited into the special fund in the State Treasury designated as the "Insurance Department Fund."

(5) The commissioner shall retain the authority to enforce the provisions of and impose any penalty or remedy authorized by this article and Title 83, Mississippi Code of 1972, against any person who is under investigation for or charged with a violation of this article or Title 83, Mississippi Code of 1972, even if the person's license or registration has been surrendered or has lapsed by operation of law.

(6) No licensee whose license has been revoked hereunder shall be entitled to file another application for a license as a producer within one (1) year from the effective date of such revocation or, if judicial review of such revocation is sought, within one (1) year from the date of final court order or decree affirming such revocation. Such application, when filed, may be refused by the commissioner unless the applicant shows good cause why the revocation of his license shall not be deemed a bar to the issuance of a new license.

SECTION 3. Section 83-17-75, Mississippi Code of 1972, is amended as follows:

83-17-75. (1) An insurance producer shall not act as an agent of an insurer unless the insurance producer becomes an appointed agent of that insurer. An insurance producer who is not acting as an agent of an insurer is not required to become appointed.

(2) To appoint a producer as its agent, the appointing insurer shall file, in a format approved by the commissioner, a notice of appointment within fifteen (15) days from the date the agency contract is executed or the first insurance application is submitted. An insurer may also elect to appoint a producer to all or some insurers within the insurer's holding company system or group by the filing of a single appointment request.

(3) Upon receipt of the notice of appointment, the commissioner shall verify within a reasonable time not to exceed thirty (30) days that the insurance producer is eligible for appointment. If the insurance producer is determined to be ineligible for appointment, the commissioner shall notify the insurer within five (5) days of its determination.

(4) An insurer shall pay an appointment fee, in the amount and method of payment set forth in Section 83-5-73 for each insurance producer appointed by the insurer.

(5) An insurer shall remit, in a manner prescribed by the commissioner, a renewal appointment fee in the amount set forth in Section 83-5-73.

(6) Before the issuance of a license or certificate of authority, the commissioner shall require the company requesting appointment of the applicant as producer 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 producer. The Commissioner of Insurance may at any time require any company to obtain a credit report on a producer 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 the applicant ineligible for a license if applicant has complied with the order of the commissioner regarding such offense.

SECTION 4. Section 83-17-43, Mississippi Code of 1972, which requires all insurance solicitors to file with the Commissioner of Insurance an application for certificate of appointment as solicitor, is repealed.

SECTION 5. This act shall take effect and be in force from and after July 1, 2005.