PROPOSED RULES
INSURANCE COMMISSIONER
Original Notice.
Preproposal statement of inquiry was filed as WSR 08-03-123.
Title of Rule and Other Identifying Information: Agent/broker (producer) licensing and renewals.
Hearing Location(s): Insurance Commissioner's Office, Room TR 120, 5000 Capitol Boulevard, Tumwater, WA 98504-0255, on August 5, 2008, at 9:00 a.m.
Date of Intended Adoption: August 12, 2008.
Submit Written Comments to: Kacy Scott, P.O. Box 40258, Olympia, WA 98504-0258, e-mail Kacys@oic.wa.gov, fax (360) 586-3109, by August 4, 2008.
Assistance for Persons with Disabilities: Contact Lorie Villaflores by August 4, 2008, TTY (360) 586-0241 or (360) 725-7087.
Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: These proposed rules amend chapter 284-17 WAC to enable electronic filing for applications and renewals of agent licenses, establish reciprocity for nonresident "personal lines" licensees, based on their states of residence, clarify and facilitate on-line licensing of insurance agents and brokers (producers), and clarify this state's "affiliation" rules.
Reasons Supporting Proposal: National standards for uniformity and reciprocity in personal qualification, education, training and experience of licensed insurance agents have been adopted by the National Association of Insurance Commissioners ("NAIC") in response to federal initiatives including the Gramm-Leach-Bliley Act at Sections 321 and 322 (Public Law 106-102). The "personal lines" line of authority is one of the major lines of authority adopted in the NAIC's Producer Licensing Model Act and which will be established for both resident and nonresident licensees effective July 1, 2009. Modernization of licensing transactions and processes will be made possible with the implementation of on-line licensing in Washington state. Current rules often contain requirements that do not contemplate electronic or web-based processes.
Statutory Authority for Adoption: RCW 48.02.060.
Statute Being Implemented: Chapter 48.17 RCW, chapter 217, Laws of 2008.
Rule is necessary because of federal law, GLBA Section 321 and 322 (Public Law 106-102).
Name of Proponent: Mike Kreidler, insurance commissioner, governmental.
Name of Agency Personnel Responsible for Drafting: Melodie Bankers, P.O. Box 40258, Olympia, WA 98504-0258, (360) 725-7039; Implementation: John Hamje, P.O. Box 40255, Olympia, WA 98504-0255, (360) 725-7262; and Enforcement: Carol Sureau, P.O Box 40255, Olympia, WA 98504-0255, (360) 725-7050.
No small business economic impact statement has been prepared under chapter 19.85 RCW. In accordance with RCW 19.85.030 (1)(a) a small business economic statement is not required because this rule does not impose more than minor costs on businesses in the industry.
A cost-benefit analysis is not required under RCW 34.05.328. A cost-benefit analysis is not required because this rule is a procedural rule as defined in RCW 34.05.328 (5)(c)(iii).
July 2, 2008
Mike Kreidler
Insurance Commissioner
OTS-1677.4
AMENDATORY SECTION(Amending Order R 94-14, filed 6/28/94,
effective 7/29/94)
WAC 284-17-120
Examination procedures for agents,
solicitors and adjusters.
(1) ((The commissioner has
contracted with an independent testing service for the
administration of agents', solicitors', and adjusters'
examinations. On and after June 1, 1982,)) Any person
((desiring)) applying to take an examination for ((the)) any
type of license shown in subsection (2) of this section ((will
be required to)) must submit a registration form and the
((appropriate)) applicable examination fee to ((the)) an
independent testing service under contract with the
commissioner for the administration of licensee examinations. ((Such)) This fee is not refundable. Registration forms and
information about examinations may be obtained from the office
of insurance commissioner, any prelicensing education
providers, or from the independent testing service. Current
information about the independent testing service, fees, dates
of examinations, and other information related to licensing
examinations, or to download an examination registration form,
are available through the commissioner's web site
(www.insurance.wa.gov).
(2) At least ((twice)) once each month at predetermined
locations, the independent testing service will conduct the
examinations required for the following types of licenses:
TYPE OF LICENSE | EXAMINATION(S) REQUIRED |
Life insurance agent or solicitor . . . . . . . . . . . . | Life |
Disability insurance agent or solicitor . . . . . . . . . . . . | Disability |
Life and disability agent or solicitor . . . . . . . . . . . . | Life, disability |
Property/casualty agent or solicitor . . . . . . . . . . . . | Property, casualty |
Property/casualty and disability agent or solicitor . . . . . . . . . . . . |
Property, casualty, disability |
Life/disability/ property/casualty agent or solicitor . . . . . . . . . . . . |
Life, disability, property, casualty |
Vehicle only agent or solicitor . . . . . . . . . . . . | Vehicle |
Surety only agent or solicitor . . . . . . . . . . . . | Surety |
Credit life and disability agent or solicitor . . . . . . . . . . . . |
Credit life and disability |
Independent adjuster . . . . . . . . . . . . | Adjuster |
Public adjuster . . . . . . . . . . . . | Adjuster |
Life and disability broker . . . . . . . . . . . . | Life and disability |
Property/casualty broker . . . . . . . . . . . . | Property and casualty (Disability questions are included) |
(4) Tests will be graded by the independent testing
service ((which will provide)) and each applicant ((with))
will be provided a score report, following examination. If
the examination is passed, the score report must be forwarded
by the applicant to the insurance commissioner with a
completed insurance license application, ((two)) one finger
print card((s)), appointment form(s) for each insurer to be
represented, and the ((appropriate)) applicable license,
((appointment)) finger print, and filing fees.
[Statutory Authority: RCW 48.01.030, 48.02.060(3), 48.14.010, 48.17.150(2), 48.17.160 (1)(5) and 48.17.500(3). 94-14-033 (Order R 94-14), § 284-17-120, filed 6/28/94, effective 7/29/94. Statutory Authority: RCW 48.02.060. 88-24-054 (Order R 88-13), § 284-17-120, filed 12/7/88; 84-19-022 (Order R 84-3), § 284-17-120, filed 9/12/84; 82-10-016 (Order R 82-2), § 284-17-120, filed 4/28/82.]
(1) "Business entity" means a corporation, partnership, firm, 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)) required, on forms
designated by the commissioner for that purpose, via first
class mail, commercial parcel delivery company, ((electronic))
telefacsimile ((transmission)), or ((e-mail)) electronic
transmission.
(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.
[Statutory Authority: RCW 48.02.060 (3)(a) and 48.17.150 (1)(g)(ii). 06-12-025 (Matter No. R 2005-06), § 284-17-421, filed 5/30/06, effective 6/30/06.]
(1) The licensee's authority to transact insurance in this state is limited to the scope of the license granted by the licensee's home state.
(2) For purposes of this section, "personal lines only authority" means property and casualty insurance coverage sold to individuals and families for primarily noncommercial purposes.
[]
(1) By submitting the appointment electronically through
NIPR (((preferred method))) or the commissioner's web site; 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)) on the commissioner's web site (www.insurance.wa.gov).
[Statutory Authority: RCW 48.02.060 (3)(a) and 48.17.150 (1)(g)(ii). 06-12-025 (Matter No. R 2005-06), § 284-17-437, filed 5/30/06, effective 6/30/06.]
[Statutory Authority: RCW 48.02.060 (3)(a) and 48.17.150 (1)(g)(ii). 06-12-025 (Matter No. R 2005-06), § 284-17-439, filed 5/30/06, effective 6/30/06.]
[Statutory Authority: RCW 48.02.060 (3)(a) and 48.17.150 (1)(g)(ii). 06-12-025 (Matter No. R 2005-06), § 284-17-441, filed 5/30/06, effective 6/30/06.]
(1) Sending ((written)) notice to the commissioner that
the appointment will be renewed on the form provided by the
commissioner for that purpose or through the commissioner's
web site (www.insurance.wa.gov); and
(2) Paying the renewal fee for each agent appointed by
the insurer ((on)) no later than the renewal date assigned by
the commissioner.
[Statutory Authority: RCW 48.02.060 (3)(a) and 48.17.150 (1)(g)(ii). 06-12-025 (Matter No. R 2005-06), § 284-17-443, filed 5/30/06, effective 6/30/06.]
(1))) electronically through NIPR (((preferred
method);)), the commissioner's web site, or
(((2) Using)) on the form provided by the commissioner
for that purpose. The form may be obtained upon request or
may be found ((at)) on the commissioner's web site
(www.insurance.wa.gov).
(2) The effective date of the termination is the date of receipt by the commissioner.
[Statutory Authority: RCW 48.02.060 (3)(a) and 48.17.150 (1)(g)(ii). 06-12-025 (Matter No. R 2005-06), § 284-17-445, filed 5/30/06, effective 6/30/06.]
(1))) the agent ((will)) is no longer authorized to act
as a representative of the insurer((; and)).
(2) The effective date of the termination is the date of receipt by the commissioner.
((The agent must also send a copy of the written notice
to the commissioner.))
[Statutory Authority: RCW 48.02.060 (3)(a) and 48.17.150 (1)(g)(ii). 06-12-025 (Matter No. R 2005-06), § 284-17-447, filed 5/30/06, effective 6/30/06.]
(2) If requested by the commissioner, the insurer must provide additional information, documents, records or other data pertaining to the "for cause" termination or activity of the agent.
(3) "For cause" includes the following conduct:
(a) Providing incorrect, misleading, incomplete or materially untrue information in the license application;
(b) Violating any insurance law, or violating any regulation, subpoena or order of the commissioner or of another state's insurance commissioner;
(c) Obtaining or attempting to obtain a license through misrepresentation or fraud;
(d) Improperly withholding, misappropriating or converting any moneys or properties received in the course of transacting the business of insurance;
(e) Intentionally misrepresenting the terms of an actual or proposed insurance contract or application for insurance;
(f) Having been convicted of a felony;
(g) Having admitted or been found to have committed any insurance unfair trade practice or fraud;
(h) Using fraudulent, coercive, or dishonest practices, or demonstrating incompetence, untrustworthiness or financial irresponsibility in the conduct of business in this state or elsewhere;
(i) Having an insurance license denied, suspended or revoked in any other state, province, district or territory;
(j) Forging another's name to an application for insurance or to any document related to an insurance transaction;
(k) Knowingly accepting insurance business from an individual who is not licensed;
(l) Being incompetent;
(m) Failing to account for premiums;
(n) Rebating; and
(o) Abandonment.
[Statutory Authority: RCW 48.02.060 (3)(a) and 48.17.150 (1)(g)(ii). 06-12-025 (Matter No. R 2005-06), § 284-17-449, filed 5/30/06, effective 6/30/06.]
(1) Insurers authorized to write lines of ((insurance))
authority 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)) If the agent's 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)) authority that the appointing insurer
is authorized to transact in the state of Washington.
[Statutory Authority: RCW 48.02.060 (3)(a) and 48.17.150 (1)(g)(ii). 06-12-025 (Matter No. R 2005-06), § 284-17-455, filed 5/30/06, effective 6/30/06.]
(((1))) (a) The agent is appointed by the insurer; and
(((2))) (b) The notice of appointment is submitted
electronically through NIPR or the commissioner's web site
(www.insurance.wa.gov).
(2) This authority is limited to a thirty-day calendar period beginning the date the agent signs the first application for insurance.
(3) 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.
[Statutory Authority: RCW 48.02.060 (3)(a) and 48.17.150 (1)(g)(ii). 06-12-025 (Matter No. R 2005-06), § 284-17-457, filed 5/30/06, effective 6/30/06.]
(1) The insurance contract will be effective;
(2) The agent ((is not entitled to)) must not 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.
[Statutory Authority: RCW 48.02.060 (3)(a) and 48.17.150 (1)(g)(ii). 06-12-025 (Matter No. R 2005-06), § 284-17-467, filed 5/30/06, effective 6/30/06.]
(1) Each business entity ((licensed as an agent, adjuster
or broker)) must ((notify)) submit to the commissioner ((of))
a notice of affiliation for all ((individual)) licensees
((that)) authorized to represent the business entity and act
on its behalf ((using the)). A form is provided by the
commissioner for that purpose((. The form may)) which can be
obtained upon request or ((may be)) found ((at)) on the
commissioner's web site (www.insurance.wa.gov). ((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.))
(2) A licensed business entity must have at least one affiliated individual licensee.
(3) If an agent is affiliated with a licensed business entity, the agent is not required to be directly appointed by an insurer to sell its products if the business entity is appointed by the insurer.
(4) The affiliated agent's, broker's, or surplus line broker's authority to act as a representative of a business entity is limited to those lines of authority for which the agent, broker, or surplus line broker is qualified and that are consistent with the business entity's lines of authority.
(5) If an agent, broker, surplus line broker, or adjuster cannot be affiliated electronically, the commissioner will notify the business entity that the licensee is not eligible for affiliation. A licensee cannot be affiliated under the following circumstances:
(a) The person's license is not valid;
(b) The agent, broker, or surplus line broker is not licensed for at least one of the lines or limited lines of authority that the business entity is authorized to transact in this state; or
(c) The agent is not licensed for at least one of the lines or limited lines of authority of the business entity's appointing insurers.
(6)(a) At the time of renewal of a business entity license, a renewal affiliation list will be sent to the business entity listing the affiliated agents, brokers, surplus line brokers, or adjusters whose affiliations are due to expire.
(b) A business entity may renew an affiliation by sending a list of affiliations to be renewed to the commissioner and paying the renewal fees or through the commissioner's web site (www.insurance.wa.gov).
[Statutory Authority: RCW 48.02.060 (3)(a) and 48.17.150 (1)(g)(ii). 06-12-025 (Matter No. R 2005-06), § 284-17-473, filed 5/30/06, effective 6/30/06.]
[Statutory Authority: RCW 48.02.060 (3)(a) and 48.17.150 (1)(g)(ii). 06-12-025 (Matter No. R 2005-06), § 284-17-477, filed 5/30/06, effective 6/30/06.]
(2) The effective date of the termination is the date of receipt by the commissioner.
[Statutory Authority: RCW 48.02.060 (3)(a) and 48.17.150 (1)(g)(ii). 06-12-025 (Matter No. R 2005-06), § 284-17-479, filed 5/30/06, effective 6/30/06.]
[Statutory Authority: RCW 48.02.060 (3)(a) and 48.17.150 (1)(g)(ii). 06-12-025 (Matter No. R 2005-06), § 284-17-481, filed 5/30/06, effective 6/30/06.]
[Statutory Authority: RCW 48.02.060 (3)(a) and 48.17.150 (1)(g)(ii). 06-12-025 (Matter No. R 2005-06), § 284-17-482, filed 5/30/06, effective 6/30/06.]
(1))), with a copy to the commissioner, electronically or
on the form provided by the commissioner for that purpose.
The form is available on the commissioner's web site
(www.insurance.wa.gov). The notice must state that the
((agent will)) licensee is no longer authorized to 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.
(2) The effective date of the termination is the date of receipt by the commissioner.
[Statutory Authority: RCW 48.02.060 (3)(a) and 48.17.150 (1)(g)(ii). 06-12-025 (Matter No. R 2005-06), § 284-17-483, filed 5/30/06, effective 6/30/06.]
The following sections of the Washington Administrative Code are repealed:
WAC 284-17-451 | What information must be provided relating to a "for cause" termination? |
WAC 284-17-453 | What conduct constitutes "for cause"? |
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? |
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? |
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? |