Report Title:
Insurance Customer Service Representatives; Licensure
Description:
Requires customer service representatives who sell or service insurance products to be licensed under the insurance code.
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THE SENATE |
S.B. NO. |
907 |
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TWENTY-FIRST LEGISLATURE, 2001 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
relating to insurance.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that insurers and financial institutions commonly employ persons designated as customer service representatives (CSRs) to solicit the sale of insurance products and to service existing insurance policyholders. The typical duties of CSRs, who work directly with customers, include explaining policy coverages, limits, and requirements, calculating premiums, processing new accounts, and filing claims. These are the same types of activities undertaken by insurance agents who are required by the State to be licensed under the insurance code. Licensing helps to protect consumers by requiring that persons engaged in the business of insurance meet minimum standards of competency and other requirements. No such protection exists for consumers with respect to insurance activity undertaken by CSRs who are not regulated.
The purpose of this Act is to require insurance customer service representatives to be licensed under the insurance code.
SECTION 2. Chapter 431, Hawaii Revised Statutes, is amended by adding two new sections to article 9 to be appropriately designated and to read as follows:
"§431:9- Insurance customer service representative defined. "Insurance customer service representative" means an employee of an insurer or financial institution whose duties substantially include but are not limited to soliciting insurance sales, collecting insurance premiums, responding to requests for information regarding insurance products, filing insurance claims, processing accounts, and handling customer complaints.
§431:9- Qualification for insurance customer service representative license. To qualify for an insurance customer service representative license, an applicant shall comply with this article and shall:
(1) Be domiciled in this State, or in a state that will permit residents of this State to act as insurance customer service representatives in the other state;
(2) Have successfully passed any examination required under section 431:9-206; and
(3) Pay the license fee."
SECTION 3. Chapter 431, Hawaii Revised Statutes, is amended by amending the title of article 9 to read as follows:
"ARTICLE 9
LICENSING OF AGENTS, BROKERS, SOLICITORS, ADJUSTERS,
[AND] BILL REVIEWERS, AND INSURANCE CUSTOMER SERVICE REPRESENTATIVES"
SECTION 4. Section 431:2-303, Hawaii Revised Statutes, is amended to read as follows:
"§431:2-303 Examination of agents, solicitors, adjusters, promoters, [and] independent bill reviewers[.], and insurance customer service representatives. For the purpose of ascertaining its condition, or compliance with this code, the commissioner may as often as the commissioner deems advisable examine the insurance accounts, records, documents, and transactions of:
(1) Any insurance general agent, subagent, solicitor, adjuster, [or] independent bill reviewer, or insurance customer service representative, including insurance agencies and surplus lines agencies; or
(2) Any person engaged in, proposing to be engaged in, or assisting in the promotion or formation of a domestic insurer, a stock corporation to finance a domestic mutual insurer or the production of its business, or a corporation to be attorney-in-fact for a domestic reciprocal insurer."
SECTION 5. Section 431:2-305, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:
"(d) Orders shall be issued and hearings conducted as follows:
(1) All orders entered pursuant to subsection (c)(1) shall be accompanied by findings and conclusions resulting from the commissioner's consideration and review of the examination report, relevant examiner workpapers, and any written submissions or rebuttals. Any order shall be considered a final administrative decision and may be appealed pursuant to chapter 91, and shall be served upon the insurer or person by certified mail, together with a copy of the adopted examination report. Within thirty days of the issuance of the adopted report, the insurer or person shall file affidavits executed by each of its directors stating under oath that they have received a copy of the adopted report and related orders, except that for examinations of general agents, subagents, solicitors, adjusters, independent bill reviewers, insurance customer service representatives, or surplus lines brokers, serving the copy of the adopted report and related orders by certified-return receipt requested mail will satisfy the service requirement and no affidavits shall be required; and
(2) Any hearing conducted under subsection (c)(3) by the commissioner or authorized representative shall be conducted as a nonadversarial confidential investigatory proceeding as may be necessary for the resolution of any inconsistencies, discrepancies, or disputed issues apparent upon the face of the filed examination report or raised by or as a result of the commissioner's review of relevant workpapers or raised by the written submission or rebuttal of the insurer or person. Within twenty days of the conclusion of any hearing, the commissioner shall enter an order pursuant to subsection (c)(1):
(A) The commissioner shall not appoint an examiner as an authorized representative to conduct the hearing. The hearing shall proceed expeditiously with discovery by the insurer or person limited to the examiner's workpapers that tend to substantiate any assertions set forth in any written submission or rebuttal. The commissioner or the commissioner's representative may issue subpoenas for the attendance of any witnesses or the production of any documents deemed relevant to the investigation, whether under the control of the division, the insurer, or other persons. The documents produced shall be included in the record and testimony taken by the commissioner or the commissioner's representative shall be under oath and preserved for the record;
(B) The hearing shall proceed in accordance with departmental rules adopted under chapter 91; and
(C) Nothing contained in this section shall require the insurance division to disclose any information or records that would indicate or show the existence or content of any investigation or activity of a criminal justice agency."
SECTION 6. Section 431:7-101, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) to read as follows:
"(a) The commissioner shall collect in advance the following fees:
(1) Certificate of authority: Issuance..............$900
(2) Organization of domestic insurers and affiliated corporations:
(A) Application and all other papers required for issuance of solicitation permit, filing...$1,500
(B) Issuance of solicitation permit.............$150
(3) General agent's license:
(A) Issuance, regular license....................$75
(B) Issuance, temporary license..................$75
(4) Subagent's license:
(A) Issuance, regular license....................$75
(B) Issuance, temporary license..................$75
(5) Nonresident agent's or broker's license:
Issuance..........................................$60
(6) Solicitor's license: Issuance....................$60
(7) Independent adjuster's license: Issuance.........$60
(8) Public adjuster's license: Issuance..............$60
(9) Workers' compensation claims adjuster's limited license: Issuance.................................$60
(10) Independent bill reviewer's license: Issuance.....$80
(11) Insurance customer service representative's license: Issuance ........................................$
[(11)] (12) Limited license issued pursuant to section
431:9-214(c): Issuance............................$60
[(12)] (13) Managing general agent's license: Issuance...$75
[(13)] (14) Reinsurance intermediary's license: Issuance.$75
[(14)] (15) Surplus line broker's license: Issuance..........................................$150
[(15)] (16) Service contract provider's registration:
Issuance...........................................$75
[(16)] (17) Examination for license: For each examination, a fee to be established by the commissioner.
(b) The fees for services of the department of commerce and consumer affairs subsequent to the issuance of a certificate of authority or a license are as follows:
(1) $600 per year for all services (including extension of the certificate of authority) for an authorized insurer;
(2) $75 per year for all services (including extension of the license) for a regularly licensed general agent;
(3) $75 per year for all services (including extension of the license) for a regularly licensed subagent;
(4) $45 per year for all services (including extension of the license) for a regularly licensed nonresident agent or broker;
(5) $30 per year for all services (including extension of the license) for a regularly licensed solicitor;
(6) $45 per year for all services (including extension of the license) for a regularly licensed independent adjuster;
(7) $45 per year for all services (including extension of the license) for a regularly licensed public adjuster;
(8) $45 per year for all services (including extension of the license) for a regularly limited licensed workers' compensation claims adjuster;
(9) $60 per year for all services (including extension of the license) for a regularly licensed independent bill reviewer;
(10) $ per year for all services (including extension of the license) for a regularly licensed insurance customer service representative;
[(10)] (11) $45 per year for all services (including extension of the license) for a limited license issued pursuant to section 431:9-214(c);
[(11)] (12) $75 per year for all services (including extension of the license) for a regularly licensed managing general agent;
[(12)] (13) $75 per year for all services (including extension of the license) for a regularly licensed reinsurance intermediary;
[(13)] (14) $45 per year for all services (including extension of the license) for a licensed surplus line broker;
[(14)] (15) $75 per year for all services (including renewal of registration) for a service contract provider; and
[(15)] (16) The services referred to in paragraphs (1) to [[(14)]] (15) shall not include services in connection with examinations, investigations, hearings, appeals, and deposits with a depository other than the department of commerce and consumer affairs."
SECTION 7. Section 431:9-101, Hawaii Revised Statutes, is amended to read as follows:
"§431:9-101 Scope. This article shall govern the qualifications and procedures for granting licenses to all insurance agents, brokers, surplus lines brokers, nonresident agents or brokers, subagents, solicitors, adjusters, independent bill reviewers, insurance customer service representatives, and limited service representatives."
SECTION 8. Section 431:9-201, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) to read as follows:
"(a) No person engaging in the business of insurance in this State shall act as, be appointed as, or hold oneself out to be a general agent, subagent, solicitor, adjuster, [or] independent bill reviewer, or insurance customer service representative unless so licensed by this State.
(b) No general agent, subagent, [or] solicitor, or insurance customer service representative in this State shall solicit or take applications for, procure, or place for others any class of insurance for which the general agent, subagent, or solicitor is not licensed and does not hold an appointment from the insurer in this State for that class of insurance."
SECTION 9. Section 431:9-206, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) Each applicant for license as general agent, subagent, solicitor, adjuster, [or] independent bill reviewer, or insurance customer service representative, shall prior to the issuance of any such license, personally take and pass to the satisfaction of the commissioner an examination given by the commissioner as a test of the applicant's qualifications and competence."
SECTION 10. Section 431:9-228, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) Every licensed general agent, subagent, adjuster, [and] independent bill reviewer, and insurance customer service agent shall have and maintain in this State, or, if a nonresident agent or broker, in the state of the agent's or broker's domicile, a place of business accessible to the public."
SECTION 11. Section 431:9-229, Hawaii Revised Statutes, is amended by amending the title and subsection (a) to read as follows:
"§431:9-229 Records of general agent, subagent, adjuster, independent bill reviewer [.], and insurance customer service representative. (a) Every general agent, subagent, adjuster, [or] independent bill reviewer, or insurance customer service representative shall keep a record of all transactions consummated under their license. This record shall be in organized form according to class of insurance and shall include:
(1) If a general agent [or], subagent[:], or insurance customer service representative:
(A) A record of each insurance contract procured or issued, together with the names of the insurers and insureds, the amount of premium paid or to be paid, or the basis of the premium or consideration paid or to be paid, and a statement of the subject of the insurance; and
(B) The names of any other licensees from whom business is accepted, and of persons to whom commissions or allowances of any kind are promised or paid;
(2) If an adjuster, a record of each investigation or adjustment undertaken or consummated, and a statement of any fee, commission, or other compensation received or to be received by the adjuster on account of the investigation or adjustment;
(3) If an independent bill reviewer, a record of each bill reviewed and a statement of any fee, commission, or other compensation received or to be received by the independent bill reviewer on account of the bill reviewed; and
(4) Any additional information as shall be customary, or as may reasonably be required by the commissioner."
SECTION 12. Section 431:9-301, Hawaii Revised Statutes, is amended by amending the definition of "licensee" to read as follows:
""Licensee" means a general agent, subagent, solicitor, designated representative, [or] nonresident agent, or insurance customer service representative as defined in article 9."
SECTION 13. There is created one permanent full-time position to carry out the purposes of this Act and to provide additional compliance and enforcement resources for the insurance division.
SECTION 14. There is appropriated out of the insurance regulation fund the sum of $ , or so much thereof as may be necessary for fiscal year 2001-2002, and the sum of $ , or so much thereof as may be necessary for fiscal year 2002-2003, to carry out the purposes of this Act.
The sums appropriated shall be expended by the department of commerce and consumer affairs.
SECTION 15. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 16. This Act shall take effect upon its approval; provided that section 14 shall take effect July 1, 2001.
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INTRODUCED BY: |
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