WSR 06-12-025PERMANENT RULES
OFFICE OF THEINSURANCE COMMISSIONER
[
Insurance Commissioner Matter No. R 2005-06 --
Filed May 30, 2006,
3:40 p.m.
, effective June 30, 2006
]
Effective Date of Rule:
Thirty-one days after filing.
Purpose: The purposes served by these new rules are to:
(1) Implement the provisions of RCW 48.17.150 (1)(g)(ii) by
establishing a procedure to permit agents to represent
insurers prior to receipt of notification by the commissioner
of the appointment; (2) clarify current procedures by using
principles consistent with the governor's executive order
regarding "plain talk"; (3) broaden the methods acceptable to
the commissioner for communicating information to include
transmission by electronic means; (4) encourage insurers and
other appointing authorities to use the National Insurance
Producer Registry (NIPR) internet gateway to appoint and
terminate the appointments of agents; and (5) promote
uniformity of Washington state's producer licensing procedures
with those of other states.
It is anticipated that the effects of the new rules will
be to: (1) Reduce the commissioner's processing time for
appointments; (2) permit licensed agents to represent an
insurer immediately upon appointment by the insurer; and (3)
reduce the amount of time for licensed agents to begin
soliciting insurance on behalf of insurers.
Citation of Existing Rules Affected by this Order: Repealing WAC 284-17-400, 284-17-410, and 284-17-420.
Statutory Authority for Adoption: RCW 48.02.060 (3)(a)
and 48.17.150 (1)(g)(ii).
Adopted under notice filed as WSR 06-08-100
on April 5,
2006.
Number of Sections Adopted in Order to Comply with Federal Statute:
New 0,
Amended 0,
Repealed 0;
Federal Rules or Standards:
New 0,
Amended 0,
Repealed 0;
or Recently Enacted State Statutes:
New 0,
Amended 0,
Repealed 0.
Number of Sections Adopted at Request of a Nongovernmental Entity:
New 0,
Amended 0,
Repealed 0.
Number of Sections Adopted on the Agency's Own Initiative:
New [32],
Amended 32,
Repealed 3.
Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures:
New [32],
Amended 32,
Repealed 3.
Number of Sections Adopted Using Negotiated Rule Making:
New 0,
Amended 0,
Repealed 0;
Pilot Rule Making:
New 0,
Amended 0,
Repealed 0;
or Other Alternative Rule Making:
New 0,
Amended 0,
Repealed 0.
Date Adopted: May 30, 2006.
Mike Kreidler
Insurance Commissioner
OTS-8723.2
NEW SECTION
WAC 284-17-421
What definitions apply to WAC 284-17-421
through 284-17-483?
(1) "Business entity" means a
corporation, partnership, limited liability company, or
limited liability partnership.
(2) "Sending written notice" or "sending a copy of the
written notice" means transmitting the required information in
writing and, where appropriate, on forms designated by the
commissioner for that purpose, via mail, commercial parcel
delivery company, electronic telefacsimile transmission, or
e-mail.
(3) "NIPR" means the National Insurance Producer Registry
or other equivalent organization or entity designated or
maintained by the National Association of Insurance
Commissioners, its affiliates, or subsidiaries.
[]
NEW SECTION
WAC 284-17-423
How long are initial and reinstated
individual licenses in effect?
Initial and reinstated
individual licenses are valid from the date of issuance until
the date of the licensee's next birthday anniversary plus one
year.
[]
NEW SECTION
WAC 284-17-425
How long are initial and reinstated
business entity licenses in effect?
Initial and reinstated
business entity licenses are valid for a period of two years
from the date of issuance.
[]
NEW SECTION
WAC 284-17-427
What is the renewal period for a license?
The renewal period for all licenses is two years.
[]
NEW SECTION
WAC 284-17-429
How long is an initial appointment valid?
Initial appointments are valid for the period ending with the
insurer's first appointment renewal date after the initial
issue date of the appointment. The appointment renewal date
for the insurer is assigned by the commissioner.
[]
NEW SECTION
WAC 284-17-431
What is the renewal period for an
appointment?
The renewal period for all appointments is two
years.
[]
NEW SECTION
WAC 284-17-433
How long is an appointment effective?
Each appointment is effective until the agent's license
expires or is revoked, the appointment has expired, or written
notice of termination of the appointment is received by the
commissioner, whichever occurs first.
[]
NEW SECTION
WAC 284-17-435
How will the commissioner notify an
insurer that an agent has been appointed?
The commissioner
will confirm the agent's appointment by sending written notice
to the insurer within fifteen calendar days after receipt of
the appointment by the commissioner.
[]
NEW SECTION
WAC 284-17-437
How may an agent be appointed?
An agent
may be appointed by using one of the following methods: (1) By submitting the appointment electronically through
NIPR (preferred method); or
(2) By submitting the appointment to the commissioner
using the form provided by the commissioner for that purpose.
The form may be obtained upon request or may be found at the
commissioner's web site.
[]
NEW SECTION
WAC 284-17-439
How will the commissioner notify an
insurer if an agent is not eligible for an electronic
appointment?
If an agent is not eligible for an electronic
appointment, the insurer will be notified when the electronic
appointment is not accepted for transmission through NIPR. An
agent is not eligible for an appointment where the agent's
license is not valid or the agent is not licensed for all
lines of insurance that the appointing insurer is authorized
to transact in the state of Washington.
[]
NEW SECTION
WAC 284-17-441
How will the commissioner notify an
insurer if an agent is ineligible for an appointment when the
appointment has not been submitted electronically?
The
commissioner will notify an insurer that an agent is
ineligible for an appointment when the appointment has not
been submitted electronically by sending written notice to the
insurer.
[]
NEW SECTION
WAC 284-17-443
How may an insurer renew an agent's
appointment?
A renewal appointment list will be sent to the
insurer identifying all of the insurer's agents whose
appointments are due to expire. An insurer may renew an
appointment by: (1) Sending written notice to the commissioner that the
appointment will be renewed; and
(2) Paying the renewal fee for each agent appointed by
the insurer on the renewal date assigned by the commissioner.
[]
NEW SECTION
WAC 284-17-445
How may an insurer terminate an
appointment?
An insurer may terminate an appointment by
sending written notice of termination to the agent and by
sending a notice of termination of the appointment to the
commissioner: (1) Electronically through NIPR (preferred method); or
(2) Using the form provided by the commissioner for that
purpose. The form may be obtained upon request or may be
found at the commissioner's web site.
[]
NEW SECTION
WAC 284-17-447
How may an agent terminate an
appointment?
An agent may terminate an appointment by sending
advance written notice to the insurer stating: (1) The agent will no longer act as a representative of
the insurer; and
(2) The effective date of the termination.
The agent must also send a copy of the written notice to
the commissioner.
[]
NEW SECTION
WAC 284-17-449
When an agent's appointment is terminated
"for cause," what procedure must be followed in notifying the
commissioner?
If an insurer or its authorized representative
terminates the appointment of an agent "for cause," the
insurer must notify the insurance commissioner within thirty
days following the effective date of the termination by
sending written notice of termination of the appointment "for
cause" to the commissioner.
[]
NEW SECTION
WAC 284-17-451
What information must be provided
relating to a "for cause" termination?
Upon the written
request of the commissioner, the insurer shall provide
additional information, documents, records or other data
pertaining to the "for cause" termination or activity of the
agent.
[]
NEW SECTION
WAC 284-17-453
What conduct constitutes "for cause"?
"For cause" includes the following conduct: (1) Providing incorrect, misleading, incomplete or
materially untrue information in the license application;
(2) Violating any insurance laws, or violating any
regulation, subpoena or order of the commissioner or of
another state's insurance commissioner;
(3) Obtaining or attempting to obtain a license through
misrepresentation or fraud;
(4) Improperly withholding, misappropriating or
converting any moneys or properties received in the course of
doing insurance business;
(5) Intentionally misrepresenting the terms of an actual
or proposed insurance contract or application for insurance;
(6) Having been convicted of a felony;
(7) Having admitted or been found to have committed any
insurance unfair trade practice or fraud;
(8) Using fraudulent, coercive, or dishonest practices,
or demonstrating incompetence, untrustworthiness or financial
irresponsibility in the conduct of business in this state or
elsewhere;
(9) Having an insurance license, denied, suspended or
revoked in any other state, province, district or territory;
(10) Forging another's name to an application for
insurance or to any document related to an insurance
transaction;
(11) Knowingly accepting insurance business from an
individual who is not licensed;
(12) Incompetence;
(13) Failure to account for premiums;
(14) Rebating; and
(15) Abandonment.
[]
NEW SECTION
WAC 284-17-455
Is an agent required to be licensed for
the same lines of authority as the appointing insurer?
An
applicant for an agent's license must be licensed for all
lines of insurance that the appointing insurer is authorized
to transact in the state of Washington with the following
exceptions: (1) Insurers authorized to write lines of insurance in
addition to vehicle insurance or surety insurance may appoint
agents to write vehicle insurance or surety insurance only.
It is only necessary that these appointees take a qualifying
examination for vehicle insurance or surety insurance.
(2) Where the appointment is for the "limited" licenses
of travel, credit life and disability, credit casualty,
specialty producers, or rental car agents, it is not necessary
for the applicant to be licensed for all lines of insurance
that the appointing insurer is authorized to transact in the
state of Washington.
[]
NEW SECTION
WAC 284-17-457
May a licensed agent act as a
representative of an insurer and solicit insurance on its
behalf before notifying the commissioner of the appointment?
A licensed agent may act as a representative of an insurer and
solicit insurance on its behalf before notifying the
commissioner of the appointment where: (1) The agent is appointed by the insurer; and
(2) The notice of appointment is submitted electronically
through NIPR.
[]
NEW SECTION
WAC 284-17-459
How long may a licensed agent act as a
representative of an insurer and solicit insurance on its
behalf before notifying the commissioner of the appointment?
A licensed agent may act as a representative of an insurer and
solicit insurance on its behalf before notifying the
commissioner of the appointment for up to thirty calendar days
after the date the agent has signed the first application for
insurance for submission to the insurer.
[]
NEW SECTION
WAC 284-17-461
May a licensed agent act as a
representative of an insurer and solicit insurance on its
behalf before notifying the commissioner of the appointment if
the notice of appointment is not submitted electronically?
If
the notice of appointment is not submitted electronically, the
commissioner must receive written notice of the appointment
and accept the appointment before the licensed agent may act
as a representative of an insurer and solicit insurance on its
behalf.
[]
NEW SECTION
WAC 284-17-463
Who is responsible for ensuring that the
agent is eligible for appointment?
The agent and the
appointing insurer are responsible for ensuring that the agent
is eligible for appointment.
[]
NEW SECTION
WAC 284-17-467
What are the consequences when an agent
has solicited insurance on behalf of an insurer as authorized
by WAC 284-17-457 but is later determined not to be eligible
for appointment by the insurer?
When an agent has solicited
insurance on behalf of an insurer as authorized by WAC 284-17-457 but is later determined not to be eligible for
appointment by the insurer: (1) The insurance will be effective;
(2) The agent is not entitled to receive compensation for
any insurance or insurance product sold by the agent; and
(3) The agent and the insurer may be subject to
disciplinary action under RCW 48.17.530.
[]
NEW SECTION
WAC 284-17-469
Is the insurer responsible for the acts
of the agent during the period of time the agent is acting as
a representative of the insurer or soliciting insurance on its
behalf?
The insurer is responsible for the acts of the agent
during the period of time the agent is acting as a
representative of the insurer or soliciting insurance on its
behalf but before the commissioner is notified of the
appointment. This is the case whether or not the
thirty-calendar-day period after the date the agent has signed
the first application for insurance for submission to the
insurer has elapsed. Any misconduct or errors that may occur
during this time will be the responsibility of the insurer and
the agent.
[]
NEW SECTION
WAC 284-17-471
What are the consequences if the
commissioner is not notified of the appointment within thirty
calendar days after the date the agent has signed the first
application for insurance for submission to the insurer and
the agent continues to act as a representative of the insurer
or solicit insurance on its behalf?
If the commissioner is
not notified of the appointment within thirty calendar days
after the date the agent has signed the first application for
insurance for submission to the insurer, the agent may no
longer act as a representative of the insurer or solicit
insurance on its behalf. If the agent continues to do so, the
insurance will be effective but the agent and the insurer may
be subject to disciplinary action under RCW 48.17.530.
[]
NEW SECTION
WAC 284-17-473
Is a business entity licensed as an
agent, adjuster or broker required to affiliate an individual
licensee?
Each business entity licensed as an agent, adjuster
or broker must notify the commissioner of all individual
licensees that represent the business entity and act on its
behalf using the form provided by the commissioner for that
purpose. The form may be obtained upon request or may be
found at the commissioner's web site. Individual licensees
that represent the business entity and act on its behalf are
"affiliated" with the licensed business entity. A business
entity licensee must have at least one individual licensee who
is affiliated.
[]
NEW SECTION
WAC 284-17-475
Must an individual licensee who is
affiliated with a business entity license be individually
appointed by insurers if the business entity is appointed by
the insurer?
If an individual licensee is affiliated with a
business entity licensee, the individual is not required to be
directly appointed by the insurer. The licensee's authority
to act as an agent is limited to those lines for which the
licensee is qualified and within the business entity's lines
of authority.
[]
NEW SECTION
WAC 284-17-477
How long is an affiliation valid?
An
affiliation by a business entity which is not revoked will be
valid until the first renewal date after the notice of
affiliation. Thereafter, each affiliation may be renewed for
a period of two years upon payment of the annual affiliation
renewal fee for each affiliation at the time of renewal of the
business entity license.
[]
NEW SECTION
WAC 284-17-479
How may a business entity terminate an
affiliation?
A business entity may terminate an affiliation
of an individual by sending written notice of termination to
the agent and a copy to the commissioner.
[]
NEW SECTION
WAC 284-17-481
How should an insurer notify the
commissioner of a termination of an affiliation "for cause"?
If a business entity or its authorized representative
terminates the affiliation of a producer "for cause," the
business entity must notify the commissioner within thirty
days following the effective date of the termination by
sending written notice of termination of the affiliation to
the commissioner.
[]
NEW SECTION
WAC 284-17-482
What information must be provided
relating to a "for cause" termination?
Upon the written
request of the commissioner, the business entity shall provide
additional information, documents, records or other data
pertaining to the "for cause" termination or conduct of the
affiliated person.
[]
NEW SECTION
WAC 284-17-483
How may an individual agent terminate an
affiliation?
An individual agent may terminate the agent's
affiliation by sending advance written notice to the business
entity stating: (1) The agent will no longer act on behalf of the
business entity; and
(2) The effective date of the termination.
The agent must also send a copy of the written notice to
the commissioner.
[]
REPEALER The following sections of the Washington Administrative Code are repealed:
| WAC 284-17-400 |
Renewal dates for agents,
brokers, solicitors and
adjusters. |
| WAC 284-17-410 |
Appointment renewal and
termination procedures for
insurance agents. |
| WAC 284-17-420 |
Appointment, affiliation and
renewal procedures for licensed
persons empowered to exercise the
authority conferred to a
corporate or firm licensee. |
© Washington State Code Reviser's Office