Bill Text: MI HB4044 | 2019-2020 | 100th Legislature | Engrossed


Bill Title: Insurance; producers; license eligibility; modify. Amends secs. 1205 & 1239 of 1956 PA 218 (MCL 500.1205 & 500.1239).

Spectrum: Partisan Bill (Republican 1-0)

Status: (Engrossed) 2019-06-20 - Transmitted [HB4044 Detail]

Download: Michigan-2019-HB4044-Engrossed.html

HB-4044, As Passed House, June 20, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SUBSTITUTE FOR

 

HOUSE BILL NO. 4044

 

 

 

 

 

 

 

 

 

 

 

 

     A bill to amend 1956 PA 218, entitled

 

"The insurance code of 1956,"

 

by amending sections 1205 and 1239 (MCL 500.1205 and 500.1239),

 

section 1205 as amended by 2008 PA 422 and section 1239 as amended

 

by 2008 PA 423.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 1205. (1) A person applying for a resident insurance

 

producer license shall file with the commissioner director the

 

uniform application required by the commissioner director 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 The director shall not approve an application for a


resident insurer producer license shall not be approved unless the

 

commissioner director finds that the individual meets all of the

 

following conditions:

 

     (a) Is at least 18 years of age.

 

     (b) Has not committed any act listed in section 1239(1).

 

     (c) As required under section 1204(2), has completed a

 

prelicensing course of study for the qualifications for which the

 

person has applied.

 

     (d) Has paid the fees applicable to the individual under

 

section 240.

 

     (e) Has successfully passed the examination required for each

 

qualification for which the person has applied.

 

     (2) A business entity acting as an insurance producer shall

 

obtain an insurance producer license. A business entity applying

 

for an insurance producer license shall file with the commissioner

 

director the uniform business entity application required by the

 

commissioner. An director. The director shall not approve an

 

application for an insurance producer license under this subsection

 

shall not be approved unless the commissioner director finds all of

 

the following:

 

     (a) The business entity has paid the fees under section

 

240(1)(d).

 

     (b) The business entity has designated an individual licensed

 

producer responsible for the business entity's compliance with this

 

state's insurance laws, rules, and regulations.

 

     (c) The business entity has not committed any act listed in

 

section 1239(1).


     (3) The commissioner director may require the production of

 

any documents reasonably necessary to verify the information

 

contained in an application.

 

     (4) Each An insurer that sells, solicits, or negotiates any

 

form of limited line credit insurance shall provide to each

 

individual whose duties will include selling, soliciting, or

 

negotiating limited line credit insurance a program of instruction

 

that may be approved by the commissioner.director.

 

     Sec. 1239. (1) In addition to any other powers under this act,

 

the commissioner director may place on probation, suspend, or

 

revoke an insurance producer's license or may levy a civil fine

 

under section 1244 or any combination of actions, and the

 

commissioner director shall refuse to not issue a license under

 

section 1205 or 1206a, for any 1 or more of the following causes:

 

     (a) Providing incorrect, misleading, incomplete, or materially

 

untrue information in the license application.

 

     (b) Violating any insurance laws or violating any regulation,

 

subpoena, or order of the commissioner or of another state's

 

insurance commissioner.

 

     (a) (c) Obtaining or attempting to obtain a license through

 

misrepresentation or fraud.

 

     (b) (d) Improperly withholding, misappropriating, or

 

converting any money or property received in the course of doing

 

insurance business.

 

     (c) (e) Intentionally misrepresenting the terms of an actual

 

or proposed insurance contract or application for insurance.

 

     (d) (f) Having been convicted of a felony within 10 years


before the uniform application was filed.

 

     (e) Regardless of the date of conviction, having been

 

convicted of a felony involving any of the following:

 

     (i) Violence or threat of violence against an individual,

 

including, but not limited to, domestic violence.

 

     (ii) Criminal sexual conduct.

 

     (iii) A felony of a fiduciary nature or financial nature such

 

as fraud, embezzlement, bribery, or extortion.

 

     (f) (g) Having admitted or been found to have committed any

 

insurance unfair trade practice or fraud.

 

     (g) (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 producer license or its equivalent

 

denied, suspended, or revoked in any other state, province,

 

district, or territory.

 

     (h) (j) Forging another's name to an application for insurance

 

or to any document related to an insurance transaction.

 

     (k) Improperly using notes or any other reference material to

 

complete an examination for an insurance license.

 

     (l) Knowingly accepting insurance business from an individual

 

who is not licensed.

 

     (m) Failing to comply with an administrative or court order

 

imposing a child support obligation.

 

     (n) Failing to pay the single business tax or the Michigan

 

business tax or comply with any administrative or court order


directing payment of the single business tax or the Michigan

 

business tax.

 

     (i) Knowingly accepting insurance business from an individual

 

who is not licensed.

 

     (2) In addition to any other powers under this act, the

 

director may place on probation, suspend, or revoke an insurance

 

producer's license or may levy a civil fine under section 1244 or

 

any combination of actions, and the director may refuse to issue a

 

license under section 1205 or 1206a, for any 1 or more of the

 

following causes:

 

     (a) Providing incorrect, misleading, incomplete, or materially

 

untrue information in the license application.

 

     (b) Having been convicted of a felony other than a felony

 

described in subsection (1)(e).

 

     (c) Having an insurance producer license or its equivalent

 

denied, suspended, or revoked in any other state, province,

 

district, or territory.

 

     (d) Improperly using notes or any other reference material to

 

complete an examination for an insurance license.

 

     (e) Violating any insurance laws or violating any regulation,

 

subpoena, or order of the director or of another state's insurance

 

commissioner.

 

     (f) Failing to comply with an administrative or court order

 

imposing a child support obligation.

 

     (g) Failing to pay the single business tax or the Michigan

 

business tax or comply with any administrative or court order

 

directing payment of the single business tax or the Michigan


business tax.

 

     (3) Subject to subsection (2), after examination,

 

investigation, and interrogatories, the director shall issue a

 

license under section 1205 or 1206a to an applicant if the director

 

determines the applicant possesses good moral character to act as

 

an insurance producer.

 

     (4) (2) Before the commissioner director denies an application

 

for a license under section 1205 or 1206a, the commissioner

 

director shall notify in writing the applicant or licensee of the

 

denial and of the reason for the denial. Not later than 30 days

 

after this written denial, the applicant or licensee may make

 

written demand upon on the commissioner director for a hearing

 

before the commissioner director to determine the reasonableness of

 

the commissioner's director's action. A hearing under this

 

subsection shall must be held pursuant to under the administrative

 

procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328.

 

     (5) (3) The license of a business entity may be suspended,

 

revoked, or refused if the commissioner director finds, after

 

hearing, that an individual licensee's violation was known or

 

should have been known by 1 or more of the partners, officers, or

 

managers acting on behalf of the partnership or corporation and the

 

violation was neither not reported to the commissioner nor director

 

and corrective action was not taken.

 

     (6) (4) In addition to or in lieu instead of any applicable

 

denial, suspension, or revocation of a license, a person may, after

 

hearing, be subject to a civil fine under section 1244.

 

     (7) (5) In addition to the penalties under this section, the


commissioner director may enforce the provisions of and impose any

 

penalty or remedy authorized by this act against any a person who

 

that is under investigation for or charged with a violation of this

 

act even if the person's license or registration has been

 

surrendered or has lapsed by operation of law.

 

     Enacting section 1. This amendatory act takes effect 6 months

 

after the date it is enacted into law.

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