HOUSE BILL REPORT
SSB 5357
As Amended by the House
BYSenate Committee on Financial Institutions & Insurance (originally sponsored by Senators von Reichbauer, Moore, Rasmussen, Matson and Johnson; by request of Insurance Commissioner)
Defining insurance education provider and establishing requirements for such providers.
House Committe on Financial Institutions & Insurance
Majority Report: Do pass with amendments. (10)
Signed by Representatives Dellwo, Chair; Zellinsky, Vice Chair; Chandler, Ranking Republican Member; Anderson, Beck, Dorn, Inslee, Nutley, K. Wilson and Winsley.
House Staff:John Conniff (786-7119)
AS PASSED HOUSE APRIL 11, 1989
BACKGROUND:
Each applicant for an insurance agent, broker, solicitor, or adjustor license must first pass an examination before obtaining the license. The Insurance Commissioner may adopt rules imposing prelicense education requirements upon applicants for such licenses. The Commissioner has proposed pre-licensing education requirements scheduled for adoption this summer. These rules include qualifications for instructor and course approval by the Commissioner.
To maintain a license, licensees must complete a minimum number of hours of approved insurance education. Under regulations adopted by the Commissioner, licensees may obtain credit for attending education courses specifically approved by the Commissioner or by attending education courses conducted by organizations who have been authorized by the Commissioner to conduct courses without prior approval. The Commissioner may fine or otherwise take enforcement action against licensees who violate continuing education requirements but, the Commissioner is not authorized to take enforcement action against those who have been authorized to conduct continuing education courses and who violate rules governing continuing education.
SUMMARY:
The insurance code is amended to provide standards for insurance education courses and penalties for violations of these standards.
No unauthorized person may remove, reproduce, duplicate, or distribute in any form, questions used to test applicants for insurance licenses. Insurance education providers as defined who violate these prohibitions are subject to revocation of authority to conduct education courses and are subject to a fine of not more than $1000 per offense. In addition, an insurance education provider is liable for the expenses of the Commissioner in successfully prosecuting a violation of statutes pertaining to insurance education.
Education providers may be required by the Commissioner to post a bond, cash deposit, or irrevocable letter of credit. Such bond must be filed for each approved course in an amount not exceeding $5000 for the first course and not exceeding $1000 for each additional course approved. The bond shall be used to help pay the Commissioner's costs in successfully prosecuting violations of insurance education statutes and to help pay related fines.
The Commissioner may take into consideration the method of education utilized by an insurance education provider but may not discriminate based on the method of education. The Commissioner may require that a licensed agent with appropriate experience be on the premises where courses are taught.
Fiscal Note: Not Requested.
Effective Date:The bill contains an emergency clause and takes effect on July 1, 1989.
House Committee ‑ Testified For: Becky Bogard, Audio Educational Systems; Paul Gold, Audio Educational Systems; Jerry Moore, Independent Agents; Clark Sitzes, Independent Agents.
House Committee - Testified Against: Roger Polzin, Office of the Insurance Commissioner.
House Committee - Testimony For: Pre-licensing education requirements will increase the professional standards of insurance agents. Abuses in testing procedures and certification of completion of education courses require greater oversight by the Commissioner, but the presence of abuses should not destroy legitimate education businesses.
House Committee - Testimony Against: The Commissioner's Office needs legislation to more closely regulate insurance education providers but section seven of the bill, without amendment, would worsen not improve powers already possessed by the Commissioner.