Legislative Proposals

DPFR-6

STATE OF MAINE

IN THE YEAR OF OUR LORD
TWO THOUSAND AND SEVEN
________________
____ L.D. ____

AN ACT to Amend Certain Requirements Applicable to Insurance Producers.

Be it enacted by the People of the State of Maine as follows:

Sec. 1. 24-A MRSA §1410, sub-§4, as enacted by PL 2001, c. 259, §11, is repealed.

Sec. 2. 24-A MRSA §1420-E, sub-§1, as enacted by PL 2001, c. 259, §24, is amended to read:

1. Uniform application. An individual applying for a resident insurance producer license shall apply to the superintendent 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 superintendent must find that the individual:

A. Is at least 18 years of age;

B. Has not committed any act that is a ground for denial, suspension or revocation set forth in section 1420-K;

C. When required by the superintendent, has completed the prelicensing requirements for the lines of authority for which the person has applied, as set forth in section 1410;

D. Has paid any required fees set forth in section 601; and

E. Has successfully passed the examinations for the lines of authority for which the person has applied.

Sec. 3. 24-A MRSA §1420-F, sub-§1, as enacted by PL 2001, c. 259, §24, is amended to read:

1. Issuance; lines of authority. Unless denied licensure pursuant to section 1420-K, a person who has met the requirements of sections 1420-D and 1420-E must 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, as designated in this subsection for the purposes of this subchapter:

A. Life, which is 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, which is insurance coverage for sickness, bodily injury or accidental death and may include benefits for disability income;

C. Property, which is insurance coverage for the direct or consequential loss of or damage to property of every kind;

D. Casualty, which is insurance coverage against legal liability, including coverage for death, injury or disability or damage to real or personal property;

E. Variable life and variable annuity products, which is insurance coverage provided under variable life insurance contracts and variable annuities;

F. Personal lines, which is property and casualty insurance coverage sold to individuals and families for primarily noncommercial purposes;

G. Credit, which is limited line credit insurance;

H. Travel accident and baggage insurance contracts, which are a limited line;

I. Title insurance contracts, which are a limited line;

J.

K. Automobile mechanical breakdown contracts, which are a limited line; and

L. Liability insurance offered by a motor vehicle rental company incidental to the rental of a motor vehicle for a period not to exceed 60 days, which is a limited line.

M. Insurance offered, sold, or solicited in connection with and incidental to the rental of rental cars for a period of no more than 60 days, whether at the rental office or by pre-selection of coverage in master, corporate, group or individual agreements that (i) is non-transferable; (ii) applies only to the rental car that is the subject of the rental agreement; and (iii) is limited to the following kinds of insurance:

(1) personal accident insurance for renters and other rental car occupants, for accidental death or dismemberment, and for medical expenses resulting from an accident that occurs with the rental car during the rental period;

(2) liability insurance that provides protection to the renters and other authorized drivers of a rental car for liability arising from the operation or use of the rental car during the rental period;

(3) personal effects insurance that provides coverage to renters and other vehicle occupants for loss of, or damage to, personal effects in the rental car during the rental period;

(4) roadside assistance and emergency sickness protection insurance; or

(5) any other coverage designated by the superintendent.

Sec. 4. 24-A MRSA §1420-H, as enacted by PL 2001, c. 259, §24, is amended to read:

1. Exemption. An individual who applies for an insurance producer license in this State who was previously licensed for the same lines of authority in another state is not required to complete any prelicensing education or examination pursuant to section 1410. This exemption is only available if the person is currently licensed in that state or if the application is received within 90 days of the cancellation of the applicant's previous license and if the prior state issues a certification that, at the time of cancellation, the applicant was in good standing in that state, or the state's producer database records, maintained by the National Association of Insurance Commissioners, its affiliates or subsidiaries or any successor organization, indicate that the producer is or was licensed in good standing for the line of authority requested.

2. Application. A person licensed as an insurance producer in another state who moves to this State shall make application within 90 days of establishing legal residence to become a resident licensee pursuant to section 1420-E. Prelicensing education or examinationAn examination pursuant to section 1410 is not required of that person to obtain any line of authority previously held in the prior state except when the superintendent determines otherwise by rule. Rules adopted pursuant to this subsection are routine technical rules as defined in Title 5, chapter 375, subchapter II-A.

3. Additional exemptions. An examination is also not required of:

A. An applicant for a license covering the same kind or kinds of insurance for which the applicant was licensed under a similar license in this State within the past 2 years, other than a temporary license issued pursuant to section 1420-J. This exemption applies only to persons who have met the applicable continuing education requirements during the 2-year period, who voluntarily terminated their previous license and who continue to be fully qualified for the license. A person whose previous license was revoked or suspended may not become relicensed pursuant to this paragraph;

B. An applicant for a license as a limited insurance producer who solicits or sells travel and baggage insurance;

C. An applicant for a license as a resident title insurance producer who is an attorney at law duly licensed to practice law in this State;

D. An applicant for a license as a limited insurance producer who solicits or sells mechanical breakdown insurance; or

E. An applicant for a license as a limited insurance producer employed by a motor vehicle rental company who solicits or sells liability insurance in connection with and incidental to the rental of a motor vehicle for a period not to exceed 60 days in accordance with section 1420-F, subsection 1, paragraph M.

Sec. 5. 24-A MRSA §2015, as enacted by PL 1969, c. 132, §1 and amended by PL 1997, c. 592, §61, is further amended to read:

1. Each producer shall keep in the producer's office in this State a full and true record of each surplus lines coverage procured by the producer, including a copy of each daily report, if any, a copy of each certificate of insurance issued, books of account in which financial entries are recorded respecting these transactions and such of the following items as may be applicable:

A. Amount of the insurance;

B. Gross premium charged;

C. Return premium paid, if any;

D. Rate of premium charged upon the several items of property;

E. Effective date of the contract and the terms of the contract;

F. Name and address of each insurer on the direct risk and the proportion of the entire risk assumed by such insurer, if less than the entire risk;

G. Name and address of the insured;

H. Brief general description of the property or risk insured and where located or to be performed; and

I. Other information as may be required by the superintendent.

2. The record may not be removed from this State, except in the case of a nonresident licensed as a producer with surplus lines authority for the purpose of transacting liability insurance business on behalf of a registered purchasing group, and in the case of both resident and nonresident licensees must be made available and open to examination by the superintendent at all times within 5 years after issuance of the coverage to which it relates. For the purpose of investigation or examination by the superintendent, records may be maintained in electronic form.

Sec. 6. 24-A MRSA §2016, sub-§1, as amended by PL 1997, c. 660, Pt. B, §3, is further amended to read:

1. Each producer with surplus lines authority shall maintain in the producer's office within the State a monthly report showing the amount of insurance placed for any person or organization, the location of each risk, the gross premium charged, the name of each insurer with which the insurance was placed, the date and term of each insurance contract issued during the preceding month and any other pertinent information required by the superintendent. The report must show in the same detail each contract cancelled during the month covered by the report and the return premium on it. The monthly report must be made available to the superintendent for examination at the producer's office location in the State at any time or by delivery to the bureau upon 5 days' notice by the superintendent.

SUMMARY

This bill makes three amendments to the laws applicable to insurance producers. First, it eliminates the prelicensing requirement under which potential license applicants were required to complete either a course of instruction or comply with an experience requirement before being able to sit for the qualifying license examination. Second, it expands the scope of the limited producer license for certain insurance provided in connection with the short term rental of motor vehicles. Third, it clarifies that nonresident producers with surplus lines producers are not required to maintain a physical office within this state. All three of these purposes are intended to establish consistency with current national uniformity standards.

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