Bill Text: MI HB5156 | 2011-2012 | 96th Legislature | Introduced
Bill Title: Insurance; other; persons authorized to act as adjusters; modify. Amends secs. 1201, 1222 & 1224 of 1956 PA 218 (MCL 500.1201 et seq.).
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2012-12-31 - Assigned Pa 462'12 With Immediate Effect 2012 Addenda [HB5156 Detail]
Download: Michigan-2011-HB5156-Introduced.html
HOUSE BILL No. 5156
November 8, 2011, Introduced by Rep. Johnson and referred to the Committee on Insurance.
A bill to amend 1956 PA 218, entitled
"The insurance code of 1956,"
by amending sections 1201, 1222, and 1224 (MCL 500.1201, 500.1222,
and 500.1224), sections 1201 and 1224 as amended by 2001 PA 228.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1201. As used in this chapter:
(a) "Agent" except as provided in section 1243 means an
insurance producer.
(b) "Business entity" means a corporation, association,
partnership, limited liability company, limited liability
partnership, or other legal entity.
(c) "Home state", except as provided in section 1224, means
the District of Columbia or any state or territory of the United
States in which an insurance producer maintains his or her
principal place of residence or principal place of business and is
licensed to act as an insurance producer.
(d) "Insurance" means any of the lines of authority in chapter
6.
(e) "Insurance producer" means a person required to be
licensed under the laws of this state to sell, solicit, or
negotiate insurance.
(f) "License" means a document issued by this state's
commissioner authorizing a person to act as an insurance producer
for the qualifications specified in the document. The license
itself does not create any actual, apparent, or inherent authority
in the holder to represent or commit an insurer.
(g) "Limited line credit insurance" includes credit life,
credit disability, credit property, credit unemployment,
involuntary unemployment, mortgage life, mortgage guaranty,
mortgage disability, guaranteed automobile protection insurance,
and any other form of insurance offered in connection with an
extension of credit that is limited to partially or wholly
extinguishing that credit obligation that the commissioner
determines should be designated a form of limited line credit
insurance.
(h) "Limited line credit insurance producer" means a person
who sells, solicits, or negotiates 1 or more forms of limited line
credit insurance coverage to individuals through a master,
corporate, group, or individual policy.
(i) "Limited lines insurance" means any of the following:
(i) Marine insurance as defined in section 614.
(ii) Credit insurance as described in section 624(1)(e).
(iii) Surety and fidelity insurance as defined in section 628.
(iv) Legal expense insurance as defined in section 618.
(v) Livestock insurance as described in section 624(1)(g).
(vi) Malpractice insurance as described in section 624(1)(h).
(vii) Plate glass insurance as described in section 624(1)(c).
(viii) Any other miscellaneous insurance described in section
624(1)(i).
(ix) Any other line of insurance that the commissioner
considers
necessary to recognize for the purposes of complying to
comply with section 1206a(5).
(j) "Limited lines producer" means a person authorized by the
commissioner to sell, solicit, or negotiate limited lines
insurance.
(k) "Negotiate" means the act of conferring directly with or
offering advice directly to a purchaser or prospective purchaser of
a particular contract of insurance concerning any of the
substantive benefits, terms, or conditions of the contract,
provided that the person engaged in that act either sells insurance
or obtains insurance from insurers for purchasers.
(l) "Sell" means to exchange a contract of insurance by any
means, for money or its equivalent, on behalf of an insurance
company.
(m) "Solicit" means attempting to sell insurance or asking or
urging a person to apply for a particular kind of insurance from a
particular company.
(n) "Terminate" means the cancellation of the relationship
between an insurance producer and the insurer or the termination of
a producer's authority to transact insurance.
Sec. 1222. (1) A person shall not adjust loss or damage under
a
policy of insurance nor or
advertise, solicit business, or
hold
himself or herself out to the public as an adjuster unless he or
she
is licensed as an adjuster. This
section does not apply to a
person
admitted to the practice of law in this state, to a licensed
agent
adjusting loss or damage under a policy within his control,
to
an employee of an insurer or a manager of an insurer authorized
to
transact insurance in this state adjusting loss or damage under
a
policy written by the insurer or to a marine average adjuster.
(2) The following are exempt from licensure under subsection
(1):
(a) A person admitted to the practice of law in this state.
(b) A marine average adjuster.
(c) An employee or manager of an authorized insurer adjusting
loss or damage under a policy issued by the insurer.
(d) A licensed insurance producer, attorney-in-fact of a
reciprocal insurer, or licensed insurance agent to whom claim
authority has been granted by an insurer.
(e) An individual who collects claim information from, or
furnishes claim information to, insureds or claimants, and who
conducts data entry including entering data into an automated
claims adjudication system, provided that the individual is an
employee of a licensed independent adjuster or its affiliate and no
more than 25 such persons are under the supervision of 1 licensed
independent adjuster or an individual exempt from licensure under
subdivision (c). For purposes of this subdivision, an "automated
claims adjudication system" means a preprogrammed computer system
designed for the collection, data entry, calculation, and final
resolution of portable consumer electronic insurance claims that
meets all of the following:
(i) Is only used by a licensed independent adjuster, licensed
agent, or supervised individuals operating pursuant to this
subdivision.
(ii) Complies with all claims payment requirements of this act.
(iii) Is certified as compliant with this section by a licensed
independent adjuster that is an officer of a business entity
licensed under this chapter.
Sec.
1224. (1) An application for a license to act as an
adjuster
shall be made to the commissioner on forms prescribed by
the
commissioner.
(2)
Within a reasonable time after receipt of a properly
completed
application form, the commissioner may subject the
applicant
to a written examination, and may conduct investigations
and
propound interrogatories concerning the applicant's
qualifications,
residence, business affiliations, and any other
matter
that the commissioner considers necessary or advisable to
determine
compliance with this chapter, or for the protection of
the
public. The commissioner may waive the examination requirements
of
this subsection for a person who has been licensed as an
adjuster
within the preceding 12 months. The commissioner shall
make
a decision on the application within 60 days after receipt of
a
properly completed application form.
(3)
After examination, investigation, and interrogatories, the
commissioner
shall issue a license to an applicant if the
commissioner
determines that the applicant possesses reasonable
understanding
of the provisions, terms, and conditions of the
insurance
with which the applicant will deal, possesses reasonable
understanding
of the insurance laws of this state, intends in good
faith
to act as an adjuster, possesses a good business reputation,
and
possesses good moral character to act as an adjuster. Persons
currently
licensed and new licenses issued are subject to any
additional
restrictions under which a resident of this state would
be
licensed in the jurisdiction in which the applicant resides. Any
such
restriction shall be imposed by the commissioner upon the date
set
for payment of the license fee. The commissioner shall not
issue
a new license or accept an annual license fee continuing a
current
license to either of the following:
(a)
A person residing in a state that denies a comparable
license
to a resident of this state solely because of residency.
(b)
A person who is employed either directly or indirectly by
an
adjuster that is a resident of a state, or by an adjuster's
business
that has a majority of shareholders, members, officers,
directors,
or owners that are residents of a state, that denies a
comparable
license to a resident of this state solely because of
residency.
An affidavit from an applicant establishing compliance
with
this subdivision may be relied on by the commissioner to show
compliance
with this subdivision.
(4)
The commissioner shall not issue a license to act as an
adjuster
to a person who is employed by, owns stock in, is an
officer
or director of, or in any other manner is connected with, a
fire
repair contractor.
(1) An individual applying for a resident adjuster license
shall file with the commissioner on a form prescribed by the
commissioner and shall 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. An application for a
resident adjuster license under this subsection shall not be
approved unless the commissioner finds that the individual meets
all of the following:
(a) Is at least 18 years of age.
(b) Is a resident of this state or has designated this state
as his or her home state.
(c) Is trustworthy, is reliable, and possesses a good business
reputation.
(d) Has not committed any act that is a ground for suspension,
revocation, or refusal of an adjuster license under section 1242.
(e) Has successfully passed the examination for each
qualification for which the person has applied.
(f) Has paid the license fees.
(2) A Canadian resident shall not be licensed pursuant to this
section and shall not designate Michigan as his or her home state,
unless he or she has successfully passed the adjuster examination
and has complied with the other applicable portions of this
section, other than subsection (1)(b).
(3) A business entity applying for a resident adjuster license
shall file with the commissioner on a form prescribed by the
commissioner and shall 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 business entity's knowledge and belief. An application for a
resident adjuster license under this subsection shall not be
approved unless the commissioner finds that the business entity
meets all of the following:
(a) Is eligible to designate this state as its resident or
home state.
(b) Has designated an individual licensed independent adjuster
as responsible for the business entity's compliance with this
state's insurance laws, rules, and regulations.
(c) Has not committed an act that is a ground for suspension,
revocation, or refusal of an independent adjuster license under
section 1242.
(d) Has paid the license fees.
(e) Has submitted the names, addresses, social security
numbers, criminal and administrative history, background checks,
biographical statements, and fingerprints of all executive officers
and directors of the applicant and of all executive officers and
directors of entities owning and any individuals owning, directly
or indirectly, 51% or more of the outstanding voting securities of
the applicant. Any nonresident business entity applicant whose
state of domicile requires an applicant for a resident adjuster
license to submit all of the information required by this
subdivision shall not be required to submit a criminal history,
background check, and biographical statement for its executive
officers, directors, and owners of outstanding voting securities.
(4) A nonresident person applying for a nonresident
independent adjuster license shall file with the commissioner on a
form prescribed by the commissioner and shall 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 nonresident person's knowledge and belief.
Unless refused licensure pursuant to section 1242, a nonresident
person shall receive a nonresident independent adjuster license
under this subsection if the commissioner finds that the
nonresident person meets all of the following:
(a) Is currently licensed in good standing as an independent
adjuster in his, her, or its resident or home state.
(b) Has submitted the proper request for licensure and has
paid the license fees.
(c) Has submitted or transmitted to the commissioner the
appropriate completed application for licensure.
(d) The person's designated home state awards nonresident
independent adjuster licenses to persons of this state.
(e) If the applicant's state of domicile does not require an
applicant for a nonresident independent adjuster license to submit
the information required by subsection (3)(e), the nonresident
applicant has submitted the names, addresses, social security
numbers, criminal and administrative history, background checks,
biographical statements, and fingerprints of all executive officers
and directors of the applicant and of all executive officers and
directors of entities owning and any individuals owning, directly
or indirectly, 51% or more of the outstanding voting securities of
the applicant. Any nonresident business entity applicant whose
state of domicile requires an applicant for a nonresident
independent adjuster license to submit all of the information
required by subsection (3)(e) shall not be required to submit a
criminal history, background check, and biographical statement for
its executive officers, directors, and owners of outstanding voting
securities.
(5) The commissioner may require any documents reasonably
necessary to verify the information contained in the application.
(6) For purposes of obtaining reciprocity with other states
that license adjusters, an individual who holds an adjuster license
may voluntarily elect to satisfactorily complete a minimum of 24
hours of continuing education courses, of which 3 hours shall be in
ethics, reported to the commissioner on a biennial basis in
conjunction with his or her license renewal cycle. This section
does not apply to:
(a) Licensees not licensed for 1 full year prior to the end of
the applicable continuing education biennium.
(b) Licensees holding nonresident adjuster licenses who have
met the continuing education requirements of their designated home
state.
(7) As used in this section, "home state" means either of the
following:
(a) The District of Columbia or a state or territory of the
United States in which the adjuster maintains the adjuster's
principal place of residence or business and is licensed
to act as a resident adjuster.
(b) If the state of the adjuster's principal place of
residence or business does not license adjusters for the line of
authority sought, the District of Columbia or a state or territory
of the United States in which the adjuster is licensed and in good
standing and that is designated by the adjuster as the adjuster's
home state.
