Bill Summary – FastDemocracy

1                              STATE OF OKLAHOMA
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 2                  1st Session of the 59th Legislature (2023)
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 3   SENATE BILL 542                       By: Montgomery
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 6                                 AS INTRODUCED
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 7          An Act relating to the Insurance Department; amending
 7          36 O.S. 2021, Sections 350, 606.1, 924.1, 1250.4,
 8          1641, and 6652, which relate to electronic filings,
 8          procedures and requirements for insurers, rule
 9          promulgation, and compliance; clarifying requirements
 9          for certain filings and submissions; modifying public
10          hearing process; modifying required reduction in
10          premium charges for certain insureds; requiring
11          certain insurers to maintain up-to-date information
11          with the Insurance Commissioner; updating statutory
12          language; conforming language; and providing an
12          effective date.
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15   BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
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16       SECTION 1.      AMENDATORY     36 O.S. 2021, Section 350, is
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17   amended to read as follows:
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18       Section 350.   Notwithstanding any other provision of law that
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19   requires a particular form and associated payment to be filed with
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20   the Insurance Department in paper form, or to be mailed or hand-
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21   delivered to the Insurance Department, the Insurance Commissioner
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22   may, by appropriate order, require that all filings, including the
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23   payment of any transaction, filing, or other fee prescribed by the
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     Req. No. 390                                                Page 1
 1   Commissioner, of that specific type be filed or delivered in an
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 2   electronic format.
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 3       SECTION 2.        AMENDATORY      36 O.S. 2021, Section 606.1, is
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 4   amended to read as follows:
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 5       Section 606.1.     A.   1.   Any foreign or alien insurer which is
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 6   organized under the laws of any other jurisdiction for the purpose
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 7   of transacting insurance may become a domestic insurer by complying
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 8   with all of the requirements of law relative to the organization and
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 9   licensing of a domestic insurer of the same type and by designating
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10   its principal place of business at a location in this state,
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11   provided, the Insurance Commissioner approves the insurer’s
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12   application for redomestication following a public hearing.       Said
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13   domestic insurer will be entitled to like certificates and licenses
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14   to transact business in this state and shall be subject to the
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15   authority and jurisdiction of this state.
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16       2.   The Commissioner shall approve an insurer’s application to
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17   redomesticate unless, after a public hearing thereon, he finds that:
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18            a.      the insurer cannot comply with all the requirements of
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19                    law relative to the organization and licensing of a
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20                    domestic insurer,
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21            b.      after redomestication, the insurer would not be able
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22                    to satisfy the requirements for the issuance of a
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23                    license to write the line or lines of insurance for
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24                    which it is presently licensed,
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     Req. No. 390                                                    Page 2
 1              c.   the effect of the redomestication would be
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 2                   substantially to lessen competition in insurance in
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 3                   this state or tend to create a monopoly therein,
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 4              d.   the financial condition of the insurer is such as
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 5                   might jeopardize or prejudice the interest of its
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 6                   policyholders or the state and is not in the public
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 7                   interest, or
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 8              e.   the competence, experience and integrity of those
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 9                   persons who control the operation of the insurer are
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10                   such that it would not be in the interest of the
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11                   policyholders, the public or the state to permit the
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12                   redomestication.
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13       3.   The insurer’s application to redomesticate shall contain
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14   information acceptable to the Commissioner concerning its financial
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15   condition, its plan of operation for the succeeding three (3) years,
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16   and information concerning the competence, experience and integrity
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17   of those persons who control the operation of the insurer.
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18       4.   If the Commissioner determines that grounds exist to
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19   disapprove the application to redomesticate, a public hearing shall
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20   be held.   The application for redomestication shall be deemed
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21   approved unless the Commissioner has, within thirty (30) days after
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22   the conclusion of the hearing, entered his order disapproving the
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23   redomestication.
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     Req. No. 390                                                 Page 3
 1       B.   Any domestic insurer may, upon the approval of the Insurance
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 2   Commissioner, transfer its domicile to any other state in which it
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 3   is admitted to transact the business of insurance, and upon such a
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 4   transfer, shall cease to be a domestic insurer, and shall be
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 5   admitted to this state if qualified as a foreign insurer.     The
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 6   Commissioner shall approve any such proposed transfer unless he
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 7   shall determine such transfer is not in the interest of the
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 8   policyholders of this state.
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 9       C.   The certificate of authority, agents appointments and
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10   licenses, rates, and other items which the Insurance Commissioner
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11   allows, in his discretion, which are in existence at the time any
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12   insurer licensed to transact the business of insurance in this state
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13   transfers its corporate domicile to this or any other state by
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14   merger, consolidation or any other lawful method shall continue in
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15   full force and effect upon such transfer if such insurer remains
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16   duly qualified to transact the business of insurance in this state.
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17   All outstanding policies and other contracts of any transferring
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18   insurer shall remain in full force and effect and need not be
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19   endorsed as to the new name of the company or its new location
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20   unless so ordered by the Commissioner.   Every transferring insurer
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21   shall file new policy forms with the Commissioner on or before the
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22   effective date of the transfer, but may use existing policy forms
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23   with appropriate endorsements if allowed by, and under such
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24   conditions as approved by, the Commissioner.   However, every such
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     Req. No. 390                                                  Page 4
 1   transferring insurer shall notify the Commissioner of the details of
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 2   the proposed transfer, and shall file promptly, any resulting
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 3   amendments to corporate documents required to be filed with the
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 4   Commissioner.
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 5       D.   The Insurance Commissioner may promulgate rules and
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 6   regulations to carry out the purposes of this section.
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 7       SECTION 3.       AMENDATORY     36 O.S. 2021, Section 924.1, is
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 8   amended to read as follows:
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 9       Section 924.1.    A.   Any schedule of rates or rating plan for
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10   automobile or motorcycle liability and physical damage insurance
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11   submitted to or filed with the State Insurance Commissioner shall
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12   provide for an appropriate reduction in premium charges for those
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13   insured persons for a three-year period after successfully
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14   completing a motor vehicle accident prevention course which shall
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15   include but not be limited to an automobile or motorcycle accident
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16   prevention course as approved by the insurance company of the
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17   policyholder.    Provided, however, there shall be no reduction in
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18   premiums for a self-instructed course or a course which does not
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19   provide for actual classroom or field driving instruction for a
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20   minimum number of hours as provided in subsection E of this section.
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21   Provided further, there shall be no reduction in premiums for a
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22   course attended pursuant to a court order in connection with a motor
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23   vehicle violation or an alcohol- or drug-related offense.
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     Req. No. 390                                                   Page 5
 1       B.   All insurance companies writing automobile or motorcycle
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 2   liability and physical damage insurance in this state shall allow an
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 3   appropriate reduction in premium charges to all eligible persons
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 4   pursuant to this section.
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 5       C.   Upon successfully completing the approved course, each
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 6   participant shall be issued by the sponsoring agency of the course,
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 7   a certificate which shall be the basis of qualification for the
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 8   discount on insurance.
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 9       D.   Each participant shall successfully complete an approved
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10   course each three (3) years to continue to be eligible for the
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11   discount on insurance.
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12       E.   An approved course pursuant to this section shall provide at
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13   least six (6) hours of instruction.
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14       SECTION 4.        AMENDATORY     36 O.S. 2021, Section 1250.4, is
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15   amended to read as follows:
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16       Section 1250.4.     A.   An insurer’s claim files shall be subject
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17   to examination by the Insurance Commissioner or by duly appointed
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18   designees.     Such files shall contain all notes and work papers
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19   pertaining to a claim in such detail that pertinent events and the
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20   dates of such events can be reconstructed.     In addition, the
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21   Insurance Commissioner, authorized employees and examiners shall
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22   have access to any of an insurer’s files that may relate to a
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23   particular complaint under investigation or to an inquiry or
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24   examination by the Insurance Department.
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     Req. No. 390                                                   Page 6
 1       B.    Any person subject to the jurisdiction of the Commissioner,
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 2   upon receipt of any inquiry from the Commissioner shall, within
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 3   twenty (20) calendar days from the date of receipt of the inquiry,
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 4   furnish the Commissioner with an adequate response to the inquiry.
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 5   The Commissioner may, upon good cause shown and on a case-by-case
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 6   basis, extend the time allowed for a response for up to seven (7)
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 7   additional calendar days.    Any inquiry or response subject to this
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 8   subsection shall be delivered electronically.
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 9       C.    Every insurer subject to this section shall submit to the
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10   Insurance Commissioner any change in contact information, including,
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11   but not limited to, legal or assumed name, business mailing address,
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12   email address for any contact person for the insurer, or telephone
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13   number.     The notification shall be submitted electronically in the
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14   manner and form prescribed by the Commissioner, along with any fees
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15   deemed necessary.
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16       D.    Every insurer, upon receipt of any pertinent written
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17   communication including but not limited to e-mail or other forms of
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18   written electronic communication, or documentation by the insurer of
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19   a verbal communication from a claimant which reasonably suggests
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20   that a response is expected, shall, within thirty (30) days after
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21   receipt thereof, furnish the claimant with an adequate response to
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22   the communication.
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23       D. E.    Any violation by an insurer of this section shall subject
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24   the insurer to discipline including a civil penalty of not less than
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     Req. No. 390                                                  Page 7
 1   One Hundred Dollars ($100.00) nor more than Five Thousand Dollars
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 2   ($5,000.00).
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 3       SECTION 5.      AMENDATORY      36 O.S. 2021, Section 1641, is
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 4   amended to read as follows:
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 5       Section 1641.   The Commissioner may, upon notice and opportunity
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 6   for all interested persons to be heard, issue such rules,
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 7   regulations and orders as shall be necessary to carry out the
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 8   provisions of this act.
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 9       SECTION 6.      AMENDATORY      36 O.S. 2021, Section 6652, is
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10   amended to read as follows:
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11       Section 6652.   A.    No vehicle protection product may be sold or
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12   offered for sale in this state unless the seller, warrantor and
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13   administrator, if any, comply with the provisions of the Vehicle
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14   Protection Product Act.
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15       B.   Vehicle protection product warrantors and related vehicle
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16   protection product sellers and warranty administrators complying
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17   with the Vehicle Protection Product Act are not required to comply
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18   with and are not subject to any other provisions of the Insurance
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19   Code.
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20       C.   Service Licensed service contract providers who may sell
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21   vehicle protection products and are licensed motor vehicle ancillary
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22   protection products under the Service Warranty Act in Title 15 of
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23   the Oklahoma Statutes.    Sales under this subsection are shall not be
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24   subject to the requirements of the Vehicle Protection Product Act.
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     Req. No. 390                                                  Page 8
 1   and sales Licensed service contract providers may also be registered
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 2   under the Vehicle Protection Product Act.   Sales of the vehicle
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 3   protection products under the Vehicle Protection Product Act are
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 4   exempt from the requirements of the Service Warranty Act.
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 5       D.   Warranties, indemnity agreements and guarantees that are not
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 6   provided as a part of a vehicle protection product are not subject
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 7   to the provisions of the Vehicle Protection Product Act.
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 8       SECTION 7.   This act shall become effective November 1, 2023.
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10       59-1-390       RD        1/17/2023 5:31:55 PM
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     Req. No. 390                                                Page 9
Statutes affected: 
Committee Substitute: 36-607
Floor (House): 36-607
Floor (Senate): 36-607
Engrossed: 36-607
Amended And Engrossed: 36-607, 36-107.3, 36-18., 36-2021, 36-907, 36-19., 36-908
Enrolled (final version): 36-607, 36-107.3, 36-18., 36-2021, 36-907, 36-19., 36-908
Senate Committee Substitute: 36-607