GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1995

S	3 

SENATE BILL 591
Pensions and Retirement/Insurance/State Personnel Committee Substitute Adopted 5/4/95
Finance Committee Substitute No. 2 Adopted 5/31/95

Short Title:  Insurance Licenses/Continuing Ed.	(Public)

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Sponsors:

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Referred to:  Appropriations

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April 5, 1995

A BILL TO BE ENTITLED
AN ACT TO ESTABLISH A LICENSE FOR CUSTOMER SERVICE REPRESENTATIVES, TO ESTABLISH A TEMPORARY LICENSE, AND TO MAKE CONFORMING CHANGES TO THE LAW THAT GOVERNS THE LICENSING AND CONTINUING EDUCATION REQUIREMENTS OF INSURANCE AGENTS AND BROKERS.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 58-33-130 reads as rewritten:
"§ 58-33-130.  Continuing education program for licensees.
(a)	The Commissioner may adopt rules to provide for a program of continuing education requirements for the purpose of enhancing the professional competence and professional responsibility of adjusters and motor vehicle damage appraisers. The rules may include criteria for:
(1)	The content of continuing education courses;
(2)	Accreditation of continuing education sponsors and programs;
(3)	Accreditation of videotape or other audiovisual programs;
(4)	Computation of credit;
(5)	Special cases and exemptions;
(6)	General compliance procedures; and
(7)	Sanctions for noncompliance.
(b)	The Commissioner may adopt rules to provide for the continuing professional education of all agents, brokers, including fraternal field marketers, and customer service representatives, but excluding limited representatives. In adopting the rules, the Commissioner may use the same criteria as specified in subsection (a) of this section and shall provide that agents holding more than one license under G.S. 58-33-25(c) are required to complete no more than 18 credit hours per year.
(c)	On and after January 1, 1992, any individual agent, broker, or customer service representative desiring to renew an appointment or license shall offer evidence satisfactory to the Commissioner that the agent, broker, or customer service representative has complied with the continuing professional education requirements approved by the Commissioner.
(d)	Annual continuing professional education hour requirements shall be determined by the Commissioner, but shall not be more than 12 credit hours. Continuing professional education hour requirements for customer service representatives shall not be more than six credit hours per year.
(e)	No more than seventy-five percent (75%) of the requirement relating to life or health insurance agents or brokers may be met by taking courses offered by licensed life or health insurance companies with which those agents or brokers have appointments.
(f)	Repealed by Session Laws 1993 (Reg. Sess., 1994), c. 678, s. 18.
(g)	The Commissioner shall permit any licensee to carry over to a subsequent calendar year up to seventy-five percent (75%) of the required annual hours of continuing professional education.
(h)	Any licensee who offers evidence satisfactory to the Commissioner on forms prescribed by the Commissioner that he has satisfactorily completed the required continuing professional education courses shall be deemed to have complied with this section.
(i)	The Commissioner is authorized to approve continuing professional education courses.
(j)	The Commissioner is authorized to establish fees to be paid to the Commissioner by licensees who are required to comply with this section or by course vendors for the purpose of offsetting the cost of additional staff and resources to administer the program authorized by this section.  To assure continued and proper administration of the program, any unexpended revenue from the fees shall not revert to the General Fund.
(k)	Repealed by Session Laws 1993, c. 409, s. 4."
Sec. 2.  G.S. 58-33-65 reads as rewritten:
"§ 58-33-65.  Temporary licensing.
(a)	The Commissioner may issue a temporary license as an agent, broker, or limited representative for a period without requiring an examination if the Commissioner deems that such temporary license is necessary for the servicing of insurance business in the following cases:
(1)	To the surviving spouse or next of kin, or to the administrator or executor or employee thereof, of such deceased licensee or to the spouse, next of kin, employee, or legal guardian of such licensee who becomes disabled;
(2)	To a member or employee of a licensed partnership or officer or employee of a licensed corporation, upon the death or disability of an individual designated in or registered as to the license;
(3)	To the designee of a licensee entering active service in the armed forces of the United States of America; or
(4)	To any applicant for licensing who is appointed as an agent of a life insurer that writes debit or industrial life or health  insurance or who is performing limited administrative duties under the supervision of a licensed agent or broker.
(b)	To be eligible for any such temporary license, an individual must be qualified as for a permanent license except as to experience, training or the taking of the examination. Upon meeting all license requirements the agent will be issued a permanent license. The temporary license will be cancelled and will be deemed to be a company appointment by the sponsoring company, if any.
(c)	No temporary license shall be effective for more than 90 days and shall automatically terminate upon such temporary licensee's failing the examination required in G.S. 58-33-30.  A temporary license issued under this section shall not be renewed.
(d)	An individual requesting a temporary license on account of death or disability of an agent or broker shall be licensed to represent only those insurers that had appointed such agent at the time of death or commencement of disability.
(e)	The fee paid to the Commissioner for issuance of a temporary license shall be credited toward the fee required for an appointment by the sponsoring company that is recorded upon the licensee's qualifying for a permanent license."
Sec. 3.  The title to Article 33 of Chapter 58 of the General Statutes reads as rewritten:
"ARTICLE 33.
Licensing of Agents, Brokers, Limited
Representatives, Customer Service Representatives,
and Adjusters."
Sec. 4.  G.S. 58-33-1 reads as rewritten:
"§ 58-33-1.  Scope.
This Article governs the qualifications and procedures for the licensing of agents, brokers, limited representatives, adjusters, customer service representatives, and motor vehicle damage appraisers.  This Article applies to any and all kinds of insurance and insurers under Articles 1 through 67 of this Chapter.  Except as provided in G.S. 58-33-125, this Article does not apply to the licensing of surplus lines licensees under Article 21 of this Chapter.  For purposes of this Article, all references to insurance include annuities, unless the context otherwise requires."
Sec. 5.  G.S. 58-33-10 is amended by adding a new subsection to read:
"( c1)	'Customer service representative' means a person who is licensed to negotiate policies of property and casualty insurance and to underwrite applications for property and casualty insurance under the supervision of a licensed agent or broker but who does not solicit policies of insurance outside the confines of the agent's or broker's office."
Sec. 6.  Article 33 of Chapter 58 of the General Statutes is amended by adding a new section to read:
"§ 58-33-31.  Licenses for customer service representatives.
(a)	No person shall act as a customer service representative unless licensed pursuant to this Article.
(b)	An applicant for a customer service representative license shall meet the following requirements:
(1)	Application. – Application shall be made to the Commissioner by the applicant on a form prescribed by the Commissioner.
(2)	Age. – Every individual applicant for license under this Article must be at least 18 years of age.
(3)	Character. – An applicant must be deemed by the Commissioner to be competent, trustworthy, and financially responsible, and must have not willfully violated the insurance laws of this or any other state.
(4)	Education and Training. –
a.	Each applicant must have had special education, training, or experience of sufficient duration and extent reasonably to satisfy the Commissioner that the applicant possesses the competence necessary to fulfill the responsibilities of a customer service representative.
b.	All individual applicants for licensing shall furnish evidence satisfactory to the Commissioner of successful completion of at least 40 hours of instruction, which shall in all cases include the general principles of insurance and any other topics that the Commissioner establishes by rule and which shall include the principles of personal property and liability insurance, including fire and homeowners insurance, and personal automobile insurance.
c.	After completion and filing of the application with the Commissioner, the Commissioner shall require each applicant for license as a customer service representative to take a written examination as to the applicant's competence to be licensed.  The applicant must take and pass the examination according to requirements prescribed by the Commissioner, with emphasis on personal property and liability insurance, including fire and homeowners insurance, and personal automobile insurance.
d.	The examination shall be written and administered under the Commissioner's supervision.  The Commissioner shall determine the times and places the examination shall be given to serve the convenience of both the Commissioner and applicants.  The Commissioner may contract directly with persons for the processing of examination application forms and for the administration and grading of the examinations required by this section, which shall not be subject to Article 3 of Chapter 143 of the General Statutes.  The Commissioner may charge a reasonable fee in addition to the registration fee charged under G.S. 58-33-125, to offset the cost of the examination contract authorized by this subsection.
e.	The Commissioner shall collect in advance the examination and registration fees required by this Article.  The Commissioner shall make or cause to be made available to all applicants, for a reasonable fee to offset the costs of production, materials that are necessary for the applicants' proper preparation for the examinations.  The Commissioner may contract directly with publishers and other suppliers for the production of preparatory materials and the contract shall not be subject to Article 3 of Chapter 143 of the General Statutes.
(c)	If the Commissioner finds that the applicant has not met the requirements for licensing, the Commissioner shall refuse to issue the license and shall notify in writing the applicant and the appointing insurer, if any, of the denial, stating the grounds for the denial.  The application may also be denied for any reason for which a license may be suspended, revoked, or not renewed under G.S. 58-33-45(a).  Within 30 days after service of the notification, the applicant may make a written demand upon the Commissioner for a review to determine the reasonableness of the Commissioner's action.  The review shall be completed without undue delay, and the applicant shall be notified promptly in writing as to the outcome of the review.  Within 30 days after service of the notification as to the outcome, the applicant may make a written demand upon the Commissioner for a hearing under Article 3A of Chapter 150B of the General Statutes if the applicant disagrees with the outcome.
(d)	The license shall state the name, the social security or other identifying number of the licensee, the date of issue, and any other information required by the Commissioner.
(e)	A license issued to a customer service representative authorizes the representative to act until the license is otherwise suspended or revoked.  Upon the suspension or revocation of a license, the licensee or any person having possession of the license shall return it to the Commissioner.
(f)	A license of a customer service representative shall be renewed on April 1 of each year and renewal fees shall be paid.  The Commissioner is not required to print licenses for the purpose of renewing licenses.  The Commissioner is authorized to establish for the licenses 'staggered' license renewal dates that will apportion renewals throughout each calendar year.  If a system of staggered licensing is adopted, the Commissioner is authorized to extend the licensure period for some licensees.  License renewal fees prescribed by G.S. 58-33-125 shall be prorated to the extent they are commensurate with extensions.
(g)	Customer service representatives licensed pursuant to this section shall be required to comply with continuing professional education requirements annually as required by G.S. 58-33-130."
Sec. 7.  G.S. 58-33-85 reads as rewritten:
"§ 58-33-85.  Rebates and charges in excess of premium prohibited; exceptions.
(a)	No insurer, agent, broker, customer service representative, or limited representative shall knowingly charge, demand or receive a premium for any policy of insurance except in accordance with the applicable filing approved by the Commissioner.  No insurer, agent, broker, customer service representative, or limited representative shall pay, allow, or give, or offer to pay, allow, or give, directly or indirectly, as an inducement to insurance, or after insurance has been effected, any rebate, discount, abatement, credit, or reduction of the premium named in a policy of insurance, or any special favor or advantage in the dividends or other benefits to accrue thereon, or any valuable consideration or inducement whatever, not specified in the policy of insurance.  No insured named in a policy of insurance, nor any employee of such insured, shall knowingly receive or accept, directly or indirectly, any such rebate, discount, abatement or reduction of premium, or any special favor or advantage or valuable consideration or inducement.  Nothing herein contained shall be construed as prohibiting the payment of commissions or other compensation nor as prohibiting any participating insurer from distributing to its policyholders dividends, savings or the unused or unabsorbed portion of premiums and premium deposits. As used in this section the word 'insurance' includes suretyship and the word 'policy' includes bond.
(b)	No insurer, agent, broker, customer service representative, or limited representative shall knowingly charge to or demand or receive from an applicant for insurance any money or other consideration in return for the processing of applications or other forms or for the rendering of services associated with a contract of insurance, which money or other consideration is in addition to the premium for such contract, unless the applicant consents in writing before any services are rendered."
Sec. 8.  G.S. 58-33-90 reads as rewritten:
"§ 58-33-90.  Rebate of premiums on credit life and credit accident and health insurance; retention of funds by agent.
It shall be unlawful for any insurance carrier, or officer, agent or representative of an insurance company writing credit life and credit accident and health insurance, as defined in G.S. 58-58-10 and G.S. 58-51-100, or combination credit life, accident and health, hospitalization and disability insurance in connection with loans, to permit any agent or representative of such company to retain any portion of funds received for the payment of losses incurred, or to be incurred, under such policies of insurance issued by such company, or to pay, allow, permit, give or offer to pay, allow, permit or give, directly, or indirectly, as an inducement to insurance, or after insurance has been effected, any rebate, discount, abatement, credit or reduction of the premium, to any loan agency, insurance agency or broker, or to any creditor of the debtor on whose account the insurance was issued, or to any person, firm or corporation which received a commission or fee in connection with the issuance of such insurance:  Provided, that this section shall not prohibit the payment of commissions to a licensed insurance agent or agency or limited representative on the sale of a policy of credit life and credit accident and health insurance, or combination credit life, accident and health, hospitalization and disability insurance in connection with loans.
It shall be unlawful for any agent, agency, broker, customer service representative, limited representative, or insured named in any such policy, or for any loan agency or broker, or any agent, officer or employee of any loan agency or broker to receive or accept, directly or indirectly, any such rebate, discount, abatement, credit or reduction of the premium as set out in this section."
Sec. 9.  G.S. 58-33-100 reads as rewritten:
"§ 58-33-100.  Payment of premium to agent valid; obtaining by fraud a crime.
Any agent, broker, customer service representative, or limited representative who acts for a person other than himself negotiating a contract of insurance is, for the purpose of receiving the premium therefor, the company's agent, whatever conditions or stipulations may be contained in the policy or contract.  Such agent, broker or limited representative knowingly procuring by fraudulent representations payment, or the obligation for the payment, of a premium of insurance, shall be guilty of a Class 1 misdemeanor."
Sec. 10.  G.S. 58-33-120 reads as rewritten:
"§ 58-33-120.  Agent, adjuster, etc., acting without a license or violating insurance law.
If any person shall assume to act either as principal, agent, broker, limited representative, customer service representative, adjuster or motor vehicle damage appraiser without license as is required by law or pretending to be a principal, agent, broker, limited representative, customer service representative, adjuster or licensed motor vehicle damage appraiser, shall solicit, examine or inspect any risk, or shall examine into, adjust, or aid in adjusting any loss, investigate or advise relative to the nature and amount of damages to motor vehicles or the amount necessary to effect repairs thereto, or shall receive, collect, or transmit any premium of insurance, or shall do any other act in the soliciting, making or executing any contract of insurance of any kind otherwise than the law permits, or as principal or agent shall violate any provision of law contained in Articles 1 through 64 of this Chapter, the punishment for which is not elsewhere provided for, that person shall be deemed guilty of a Class 1 misdemeanor."
Sec. 11.  G.S. 58-33-125 reads as rewritten:
"§ 58-33-125.  Fees.
(a)	The following table indicates the annual fees that are required for the respective licenses issued, renewed, or cancelled under this Article and Article 21 of this Chapter: 
Adjuster	$ 75.00
Adjuster, crop hail only	20.00
Agent appointment cancellation (paid by insurer)	10.00
Agent appointment, individual	20.00
Agent appointment, nonindividual	50.00
Agent appointment, Medicare supplement
and long-term care, individual	10.00
Agent appointment, Medicare supplement
and long-term care, nonindividual	20.00
Agent, overseas military	20.00
Broker, nonresident	100.00
Broker, resident	50.00
Customer service representative	20.00
Customer service representative cancellation	10.00
  (paid by insurer)
Limited representative	20.00
Limited representative cancellation (paid by
insurer)	10.00
Motor vehicle damage appraiser	75.00
Recertification, continuing education	5.00
Surplus lines licensee, corporate	50.00
Surplus lines licensee, individual	50.00
These fees are in lieu of any other license fees. Fees paid by an insurer on behalf of a person who is licensed or appointed to represent the insurer shall be paid to the Commissioner on a quarterly or monthly basis, in the discretion of the Commissioner. The recertification fee in this subsection shall be paid by persons subject to G.S. 58-33-130 at the time they renew their licenses or appointments under G.S. 58-33-130(c).
(b)	Whenever a temporary license may be issued pursuant to this Article, the fee shall be at the same rate as provided in subsection (a) of this section; and any amounts so paid for a temporary license may be credited against the fee required for an appointment by the sponsoring company.
(c)	Any person not registered who is required by law or administrative rule to secure a license shall, upon application for registration, pay to the Commissioner a fee of thirty dollars ($30.00). In the event additional licensing for other kinds of insurance is requested, a fee of thirty dollars ($30.00) shall be paid to the Commissioner upon application for registration for each additional kind of insurance.
In addition to the fees prescribed by this subsection, any person applying for a supplemental license to sell Medicare supplement and long-term care insurance policies shall pay an additional fee of thirty dollars ($30.00) upon application for registration for those kinds of insurance.
(d)	The requirement for an examination, prelicensing education, continuing education, or a registration fee does not apply to agents for domestic farmers' mutual assessment fire insurance companies or associations who solicit and sell only those kinds of insurance specified in G.S. 58-7-75(5)d for such companies or associations.
(e)	In the event a license issued under this Article is lost, stolen, or destroyed, the Commissioner may issue a duplicate license upon a written request from the licensee and payment of a fee of five dollars ($5.00).
(f)	Whenever a printed record of an agent's or customer service representative's file is requested, the fee shall be ten dollars ($10.00) for each copy whether or not the agent or customer service representative is currently licensed, previously licensed, or no record of that agent exists.
(g)	All fees prescribed by this section are nonrefundable."
Sec. 12.  This act becomes effective January 1, 1996.