1999 Legislation
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HOUSE BILL NO. 6 – Insurance license, Canadians, fees


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H0006........................................................by MR. SPEAKER
                   Requested by Department of Insurance
INSURANCE AGENTS - LICENSURE - Amends existing law relating to insurance
agent or broker licenses issued by the Department of Insurance to authorize
licensure of Canadians; to strike specific requirements of the application
for license; to increase the fee for service of a summons; and to further
clarify the application of certain requirements.

01/11    House intro - 1st rdg - to printing
01/11    Rpt prt - to Bus
01/29    Rpt out - rec d/p - to 2nd rdg
02/01    2nd rdg - to 3rd rdg
02/02    3rd rdg - PASSED - 65-0-4
      AYES -- Alltus, Barraclough, Barrett, Bell, Boe, Bruneel, Callister,
      Campbell, Chase, Clark, Crow, Cuddy, Deal, Denney, Ellsworth,
      Field(13), Field(20), Gagner, Geddes, Hadley, Hammond, Hansen(23),
      Hansen(29), Henbest, Hornbeck, Jaquet, Jones, Judd, Kellogg, Kempton,
      Kendell, Kjellander, Kunz, Lake, Limbaugh, Loertscher, Mader, Marley,
      McKague, Meyer, Montgomery, Mortensen, Moyle, Pischner, Pomeroy,
      Reynolds, Ridinger, Ringo, Robison, Sali, Schaefer, Sellman, Smith,
      Stevenson, Stoicheff, Stone, Taylor, Tilman, Tippets, Trail, Watson,
      Wheeler, Williams, Zimmermann, Mr Speaker
      NAYS -- None
      Absent and excused -- Black, Gould, Linford, Wood
    Dist. 19, Seat A, Vacant
    Floor Sponsor - Callister
    Title apvd - to Senate
02/03    Senate intro - 1st rdg - to Com/HuRes
03/03    Rpt out - rec d/p - to 2nd rdg
03/04    2nd rdg - to 3rd rdg
03/11    3rd rdg - PASSED - 34-0-1
      AYES--Andreason, Boatright, Branch, Bunderson, Burtenshaw, Cameron,
      Crow, Danielson, Darrington, Davis, Deide, Dunklin, Frasure, Geddes,
      Hawkins, Ingram, Ipsen, Keough, King, Lee, McLaughlin, Noh,
      Richardson, Riggs, Risch, Sandy, Schroeder, Sorensen, Stegner,
      Stennett, Thorne, Twiggs, Wheeler, Whitworth
      Absent and excused--Parry
    Floor Sponsor - Davis
    Title apvd - to House
03/12    To enrol
03/15    Rpt enrol - Sp signed
03/16    Pres signed - to Governor
03/18    Governor signed
         Session Law Chapter 97
         Effective: 07/01/99

Bill Text


 ||||              LEGISLATURE OF THE STATE OF IDAHO             ||||
Fifty-fifth Legislature                 First Regular Session - 1999

                             IN THE HOUSE OF REPRESENTATIVES

                                     HOUSE BILL NO. 6

                                      BY MR. SPEAKER
                          Requested by: Department of Insurance

 1                                        AN ACT

12    Be It Enacted by the Legislature of the State of Idaho:

13        SECTION 1.  That Section 41-1034, Idaho Code, be, and the same  is  hereby
14    amended to read as follows:

15        41-1034.  QUALIFICATIONS  --  AGENTS OR BROKERS. For the protection of the
16    people of this state, the director shall not issue,  continue,  or  permit  to
17    exist  any  agent or broker license except in compliance with this chapter, or
18    as to any individual not qualified therefor as follows:
19        (1)  Must be a natural person eighteen (18) years or more of age;
20        (2)  Must be a citizen of the United States of America  or of  Canada
21    ,  or  have  applied  to the United States department of immigration for
22    permanent residency and declared to the director of the department  of  insur-
23    ance  intention to apply for citizenship. If citizenship is not granted within
24    six (6) years of such declaration, any license issued to such person shall  be
25    revoked automatically;
26        (3)  Must  be  currently  domiciled in and be a bona fide resident of this
27    state. This provision does not apply as to any person licensed as  a  nonresi-
28    dent agent or broker under section 41-1066, Idaho Code;
29        (4)  Must  be  trustworthy,  be  of  good  character  and reputation as to
30    morals, integrity, financial responsibility, and must not have been  convicted
31    of or pled guilty to a felony or a misdemeanor. The misdemeanor must have been
32    one  which  evidences (a) bad moral character, dishonesty, or a lack of integ-
33    rity and financial responsibility, or (b) an unfitness and inability  to  pro-
34    vide  acceptable service to the consuming public. The director may at his dis-
35    cretion waive the requirement that the individual must   not  have  been  con-
36    victed of a felony or a misdemeanor, if the director finds that the individual
37    has been rehabilitated and is otherwise qualified to hold the license;
38        (5)  If  for  a  broker's  license,  must have had experience either as an
39    agent, consultant, service representative, adjuster, managing  general  agent,
40    or  broker,  or other special experience, education or training, all of suffi-
41    cient content and duration as deemed by the director to be  reasonably  neces-
42    sary  for  competence in fulfilling the responsibilities of a broker, and must
43    have filed the bond required by section 41-1054, Idaho Code;


 1        (6)  Must be competent as to the  business  to  be  transacted  under  the
 2    license applied for, and pass to the director's satisfaction any written exam-
 3    ination required under this chapter to test such competency;
 4        (7)  Must   not  be  a  service  representative,  as  defined  in  section
 5    41-1032(3), Idaho Code;
 6        (8)  Must intend in good faith to engage actively in the  insurance  busi-
 7    ness  under  the  license  with  respect to the general public, and not use or
 8    intend to use the  license principally for the purpose of  writing  controlled
 9    business as defined in section 41-1033, Idaho Code.

10        SECTION  2.  That  Section 41-1037, Idaho Code, be, and the same is hereby
11    amended to read as follows:

12        41-1037.  APPLICATION FOR LICENSE. (1) Written application for  an  agent,
13    broker or consultant license shall be made to the director by the applicant on
14    forms  prepared  and  furnished by the director, accompanied by the applicable
15    license application and fees shown in section 41-401, Idaho Code  (fee  sched-
16    ule). If the same are not already on file with the director in connection with
17    a  previous  application,  the  application  shall  also be accompanied by the
18    applicant's fingerprints on a standard police form  as  used  for  fingerprint
19    purposes , and by a recent photograph of the applicant . The appli-
20    cation  shall be signed  and duly sworn to  by the applicant .
21      before a notary public or other person authorized by law to  take
22    acknowledgements of deeds. 
23        (2)   The application form shall require the applicant to state:
24        (a)  His full name;
25        (b)  His  residences,  occupations, and places of business during the five
26        (5) years next preceding date of the application;
27        (c)  If for an agent, broker, or consultant license, the kind or kinds  of
28        insurance to be covered by the license;
29        (d)  Whether he has ever held a license to transact or advise with respect
30        to  any  kind  of insurance in any state; and whether any such license has
31        been refused, suspended or  revoked  or  any  administrative  disciplinary
32        action has been taken with respect to such license;
33        (e)  What insurance experience, if any, he has had;
34        (f)  What  instruction  in the kinds of insurance or contracts proposed to
35        be solicited or concerned with, and in the insurance laws of  this  state,
36        he has had or expects to have;
37        (g)  Whether any insurer or general agent or consultant client claims that
38        he is indebted under any agency contract or otherwise and, if so, the name
39        of  the  claimant,  the  nature  of  the claim and the applicant's defense
40        thereto;
41        (h)  Whether he has had a general agency contract or agency contract  can-
42        celled  and  if  so when, by what insurer or general agent and the reasons
43        therefor;
44        (i)  Whether he will devote all or part of his efforts to acting  as  such
45        agent,  broker  or  consultant,  and  if  part only, how much time he will
46        devote to such work, and in what other business or businesses  he  expects
47        to be engaged or employed;
48        (j)  Whether,  if  applicant  is  married, the applicant's spouse has ever
49        applied for or held a license to transact any kind  of  insurance  in  any
50        state  and  whether  such license has been refused, suspended, or revoked;
51        and
52        (k)  Such other information as the director may reasonably require.
53        (3)   If for an agent license, the application shall be  accompanied


 1    by  written appointment by an authorized insurer of the applicant as agent for
 2    a kind or kinds of insurance to be transacted under the  license,  subject  to
 3    issuance of the license.
 4        ( 4  3 )  If the applicant is a firm or corporation,
 5    as  provided  in  section  41-1036, Idaho Code, the application shall show, in
 6    addition, the names and residence  addresses  of  all  members,  officers  and
 7    directors,  and  shall designate the name and residence address  of each indi-
 8    vidual who is to exercise the license powers; and each such  individual  shall
 9    furnish  information  with  respect  to  himself  as  though for an individual
10    license.
11        ( 5  4 )  If  for  agent  license,  the  application
12    shall  also  be  accompanied by the certificate (on a form designated and fur-
13    nished by the director) of an officer or representative of  the  insurer  pro-
14    posed  to be represented or of the applicant's employer (in the case of appli-
15    cants for agent license) that the insurer, agent or broker  has  investigated,
16    or caused an investigation to be made of, the character and business record of
17    the  applicant  and  the  uses  to be made of the license, if granted, and the
18    findings of such investigation as to applicant's  trustworthiness,  integrity,
19    financial responsibility, competence and other qualifications for the license,
20    and  whether the applicant will use the license principally for the purpose of
21    writing controlled business, as referred to in section 41-1033, Idaho Code. In
22    lieu of, or in addition to, the certificate of the insurer, agent,  or  broker
23    provided for in this subsection, the director may, in his discretion, cause an
24    investigation  to  be  made  of  the  applicant  by an independent established
25    reporting agency; and in such event the applicant, insurer, agent, or  broker,
26    as  the  case  may be, shall pay to the director in advance an amount equal to
27    the cost of such investigation as determined by the director.
28        ( 6  5 )  No applicant for any  license  under  this
29    chapter shall  wilfully   willfully  withhold or misrep-
30    resent any fact or information called for in the application form or otherwise
31    by the director. Violation of this provision shall be a misdemeanor.

32        SECTION  3.  That  Section 41-1066, Idaho Code, be, and the same is hereby
33    amended to read as follows:

34        41-1066.  NONRESIDENT AGENTS, BROKERS -- SPECIAL CONDITIONS.  In  addition
35    to  the  qualifications  and  requirements  therefor  referred  to  in section
36    41-1065, Idaho Code, the issuance  of  such  a  nonresident  agent  or  broker
37    license is subject to the following conditions:
38        (1)  The  applicant  and  licensee  must at all times be qualified for and
39    hold in the state of his domicile  or principal place of business  
40    the  license  of such state as a n   resident  insurance
41    agent or broker covering all the kinds of insurance covered or to  be  covered
42    under the Idaho nonresident license. In the case of nonresident firms and cor-
43    porations,  each individual member, officer or employee to be named in or reg-
44    istered with the director as to the  Idaho  license  to  exercise  the  powers
45    thereof must either hold such a license in the  state of his  domi-
46    cile    state    or principal place of business  or have
47    qualified as for an individual license and be named in or registered as to the
48    license issued to the firm or corporation in the  state of    domi-
49    cile  state   or principal place of business .
50        (2)  The  director  may,  in  his  discretion, prior to issuance of such a
51    license, procure a report of investigation of the applicant made by an  estab-
52    lished  commercial investigation and reporting agency. The cost of such inves-
53    tigation and report shall be paid by the applicant to the director upon  noti-


 1    fication  by the director of the amount thereof. The director may, in his dis-
 2    cretion, require the applicant to deposit with him in advance an amount  esti-
 3    mated  as  being  sufficient  to  cover the cost of any such investigation and
 4    report, and the director shall promptly refund to the applicant any portion of
 5    such a deposit which is not actually expended for the purpose for which depos-
 6    ited. All such reports shall be deemed to  be  privileged  communications  and
 7    shall  not  be  admissible  in  evidence in any action or proceeding. All such
 8    reports shall be the property of the state of Idaho.
 9        (3)  The licensee shall not enter the state of Idaho and solicit insurance
10    business, inspect risks, or otherwise conduct business in  this  state  unless
11    similar  privileges in the state of the licensee's domicile  or principal
12    place of business  are granted to residents of this state holding  simi-
13    lar nonresident licenses issued by such other state.
14        (4)  The  licensee  shall  be  subject  to all such taxes, licenses, fees,
15    fines, penalties, deposit and bond requirements, and  other  material  obliga-
16    tions, prohibitions or restrictions, including countersignature and commission
17    requirements,  as are imposed by the state of the licensee's domicile  or
18    principal place of business  upon resident Idaho agents or  brokers  who
19    transact or seek to transact insurance in the state of the licensee's domicile
20     or principal place of business  which are in excess of or in addi-
21    tion to the taxes, licenses, fees, fines, penalties, deposit and bond require-
22    ments,  or  other  obligations,  prohibitions, or restriction imposed upon the
23    licensee by or under the laws of this state.
24        (5)  The licensee shall transact insurance in this state or  with  respect
25    to  subjects  of insurance resident, located, or to be performed in this state
26    only through insurers duly authorized  to  transact  such  insurance  in  this
27    state.
28        (6)  The license is not transferable.

29        SECTION  4.  That  Section 41-1067, Idaho Code, be, and the same is hereby
30    amended to read as follows:

31        41-1067.  NONRESIDENT AGENTS, BROKERS --  SERVICE  OF  PROCESS.  (1)  Each
32    licensed  nonresident agent or broker shall appoint the director as his attor-
33    ney to receive service of legal process issued against the agent or broker  in
34    this state upon causes of action arising within this state out of transactions
35    under  the  license.  Service  upon  the director as attorney shall constitute
36    effective legal service upon the agent or broker.
37        (2)  The appointment shall be irrevocable for as long as  there  could  be
38    any cause of action against the licensee arising out of his insurance transac-
39    tions in or with respect to this state.
40        (3)  Duplicate  copies of such legal process against the licensee shall be
41    served upon the director by a person competent to serve a summons. At the time
42    of service the plaintiff shall pay the director   five      an
43    appropriate  fee not in excess of thirty   dollars ($ 5 
44    30 .00),  taxable as costs in the action      which  fee
45    shall be determined by rule .
46        (4)  Upon  receiving  such  service, the director shall forthwith send one
47    (1) of the copies of the process, by registered or certified mail with  return
48    receipt  requested,  to  the  defendant licensee at his address last of record
49    with the director.
50        (5)  The director shall keep a record of the day and hour of service  upon
51    him of all such legal process.

52        SECTION  5.  That  Section 41-1068, Idaho Code, be, and the same is hereby


 1    amended to read as follows:

 3    ONLY.  (1) No authorized insurer shall make, write, place or cause to be made,
 4    written or placed in this state any policy,  duplicate  policy,  or  insurance
 5    contract of any kind, covering a subject of insurance resident, located, or to
 6    be  performed  in  this  state  through any nonresident person who is not then
 7    licensed as a nonresident agent or broker under this chapter.
 8        (2)  The director may suspend or revoke the certificate  of  authority  of
 9    any insurer violating this section.
10          (3)  This  section does not apply to life or disability insurances.

12        SECTION 6.  That Section 41-1108, Idaho Code, be, and the same  is  hereby
13    amended to read as follows:

14        41-1108.  OTHER  PROVISIONS  APPLICABLE. The following sections of chapter
15    10, title 41, Idaho Code, shall, to the extent so applicable, also apply as to
16    adjuster licenses:
17        (1)  41-1037( 7  5 )  (misrepresentations,  etc.  in
18    application--penalty).
19        (2)  41-1043 (issuance, refusal of license).
20        (3)  41-1046 (continuation, expiration of license).
21        (4)  41-1076 (change of address).
22        (5)  41-1077 (suspension, revocation, refusal of license).
23        (6)  41-1078 (procedure following suspension, revocation--reinstatement).
24        (7)  41-1079 (return of license).

Statement of Purpose / Fiscal Impact

                      STATEMENT  OF  PURPOSE
To amend Idaho Code Section 41-1034, to make it consistent with
Section 41-1025 by clarifying that Canadian residents may qualify
for an Idaho nonresident agent or broker license; to amend Idaho
Code Section 41-1037(1), to eliminate the requirement that
applicants for an insurance agent, broker or consultant license
include with the application a recent photograph of the applicant,
and to delete the application information requirements of Section
41-1037(2); to amend Idaho Code Section 41-1066 to allow the
Department to issue nonresident licenses to persons who are
licensed in and principally do business in a state other than their
state of domicile;  to amend Idaho Code Section 41-1067 to make the
fee for service of nonresident agents consistent with the fee for
service of nonresident insurance companies as set forth at Idaho
Code Section 41-334; and to amend Idaho Code Section 41-1068 to
clarify that the requirement that insurers transacting insurance in
Idaho through nonresident agents use only agents who are licensed
by the Department also applies to life or disability insurance.
                         FISCAL  IMPACT
Fiscal impact is expected to be minimal.
Name:     James Genetti
Agency:   Department of Insurance
Phone:    334-4250

Statement of Purpose/Fiscal Impact                              H