1 STATE OF OKLAHOMA
2 1st Session of the 59th Legislature (2023)
3 SENATE BILL 539 By: Montgomery
4
5
6 AS INTRODUCED
7 An Act relating to insurance licensure; amending 36
O.S. 2021, Sections 1435.13, 1435.29, as amended by
8 Section 7, Chapter 225, O.S.L. 2022 (36 O.S. Supp.
2022, Section 1435.29), 6206, 6217, and 6220, which
9 relate to power over licensure, continuing education,
license evidence, license expiration and renewal, and
10 causes for disbarring licensure; removing certain
parameters for license termination; modifying time
11 period for review of certain continuing education
courses; requiring licensee maintain updated
12 information with the Insurance Commissioner;
clarifying and conforming language; and providing an
13 effective date.
14
15
16 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
17 SECTION 1. AMENDATORY 36 O.S. 2021, Section 1435.13, is
18 amended to read as follows:
19 Section 1435.13. A. The Insurance Commissioner may place on
20 probation, censure, suspend, revoke or refuse to issue or renew a
21 license issued pursuant to the Oklahoma Producer Licensing Act or
22 may levy a civil penalty in accordance with subsection D of this
23 section or any combination of actions, for any one or more of the
24 following causes:
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1 1. Providing incorrect, misleading, incomplete or materially
2 untrue information in the license application;
3 2. Violating any insurance laws, or violating any regulation,
4 subpoena or order of the Insurance Commissioner or of another
5 state’s Insurance Commissioner;
6 3. Obtaining or attempting to obtain a license through
7 misrepresentation or fraud;
8 4. Improperly withholding, misappropriating or converting any
9 monies or properties received in the course of doing insurance
10 business;
11 5. Intentionally misrepresenting the terms of an actual or
12 proposed insurance contract or application for insurance;
13 6. Having been convicted of a felony;
14 7. Having admitted or been found to have committed any
15 insurance unfair trade practice or fraud;
16 8. Using fraudulent, coercive or dishonest practices, or
17 demonstrating incompetence, untrustworthiness or financial
18 irresponsibility in the conduct of business in this state or
19 elsewhere;
20 9. Having an insurance producer license, or its equivalent,
21 denied, suspended, censured, placed on probation or revoked in any
22 other state, province, district or territory;
23 10. Forging another’s name to an application for insurance or
24 to any document related to an insurance transaction;
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1 11. Improperly using notes or any other reference material to
2 complete an examination for an insurance license;
3 12. Knowingly accepting insurance business from an individual
4 who is not licensed;
5 13. Failing to comply with an administrative or court order
6 imposing a child support obligation;
7 14. Failing to pay state income tax or comply with any
8 administrative or court order directing payment of state income tax;
9 15. Failing to respond to an inquiry from the Department as
10 required in Section 1250.4 of this title; or
11 16. Any cause for which an original issuance of a license could
12 have been refused.
13 B. 1. In the event that the action by the Insurance
14 Commissioner is to nonrenew or to deny an application for a license,
15 the Insurance Commissioner shall notify the applicant or licensee
16 and advise the applicant or licensee, in writing, of the reason for
17 the denial or nonrenewal of the applicant’s or licensee’s license.
18 The applicant or licensee may make written demand upon the Insurance
19 Commissioner within thirty (30) days of the date of notification of
20 the notification by the Insurance Commissioner for a hearing before
21 the Insurance Commissioner or an independent hearing examiner to
22 determine the reasonableness of the Insurance Commissioner’s action.
23 The hearing shall be heard within a reasonable time period and shall
24 be held pursuant to the Oklahoma Administrative Procedures Act.
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1 2. The Insurance Department shall only terminate a license
2 issued pursuant to the Oklahoma Producer Licensing Act that failed
3 to renew after a twelve-month inactive period upon notification by
4 first-class mail ninety (90) days prior to termination of the
5 license. The provisions of this subsection shall not apply to a
6 licensee that willfully and knowingly violates any provision of this
7 Code as to which refusal, suspension or revocation is mandatory.
8 C. The license of a business entity may be suspended, revoked
9 or refused if the Insurance Commissioner finds, after opportunity
10 for hearing, that an individual licensee’s violation was known or
11 should have been known by one or more of the partners, officers or
12 managers acting on behalf of the partnership or corporation and the
13 violation was neither reported to the Insurance Commissioner nor
14 corrective action taken.
15 D. In addition to or in lieu of any applicable denial,
16 probation, censure, suspension or revocation of a license, a person
17 may, after opportunity for hearing, be subject to a civil fine of
18 not less than One Hundred Dollars ($100.00) nor more than One
19 Thousand Dollars ($1,000.00) for each occurrence. The penalty may
20 be enforced in the same manner in which civil judgments may be
21 enforced.
22 E. Every licensee licensed pursuant to the provisions of the
23 Oklahoma Producer Licensing Act shall keep at the licensee’s place
24 of business the usual and customary records pertaining to
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1 transactions authorized by the license. All records as to any
2 particular transactions shall be kept available and open to the
3 inspection of the Commissioner at any time during business hours
4 during the three (3) years immediately following the date of
5 completion of the transaction. The Commissioner may require a
6 financial or market conduct examination during any investigation of
7 a licensee. The cost of such examination shall be apportioned among
8 all of the appointing insurers of the licensee.
9 F. The Insurance Commissioner shall retain the authority to
10 enforce the provisions of and impose any penalty or remedy
11 authorized by the Oklahoma Producer Licensing Act and this title
12 against any person who is under investigation for or charged with a
13 violation of the Oklahoma Producer Licensing Act or this title even
14 if the person’s license or registration has been surrendered or has
15 lapsed by operation of law.
16 G. Files pertaining to investigations or legal matters which
17 contain information concurring a current and ongoing investigation
18 of allegations of violations of the Oklahoma Insurance Code by a
19 licensed agent shall not be available for public inspection without
20 proper judicial authorization; however, a licensee under
21 investigation for alleged violations of the Oklahoma Insurance Code,
22 or against whom an action for alleged violations of the Oklahoma
23 Insurance Code has been commenced, may view evidence and complaints
24 pertaining to the investigation, other than privileged information,
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1 at reasonable times at the Commissioner’s office. All qualification
2 examination materials, booklets and answers for any license
3 authorized to be issued by the Commissioner under any statute shall
4 not be available for public inspection. The residence address,
5 residence telephone number, birth date and Social Security number of
6 a licensee shall not be available for public inspection. A separate
7 business or mailing address provided by the licensee shall be
8 considered a public record. If the residence and business addresses
9 or residence and business telephone numbers are the same, such
10 addresses or telephone numbers shall be considered a public record.
11 H. The Commissioner shall promptly notify all appointing
12 insurers, where applicable, and the licensee regarding any censure,
13 suspension, revocation or termination of license by the
14 Commissioner.
15 I. Upon suspension, revocation or termination of the license of
16 a resident or nonresident of this state, the Commissioner shall
17 notify the Central Office of the National Association of Insurance
18 Commissioners, or its appropriate nonprofit affiliates and the
19 Insurance Commissioner of each state for whom the Commissioner has
20 executed a certificate of licensure status.
21 J. The Commissioner may issue a duplicate license for any lost,
22 stolen or destroyed license issued pursuant to the Oklahoma Producer
23 Licensing Act upon an affidavit of the licensee prescribed by the
24
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1 Commissioner concerning the facts of such loss, theft or
2 destruction.
3 SECTION 2. AMENDATORY 36 O.S. 2021, Section 1435.29, as
4 amended by Section 7, Chapter 225, O.S.L. 2022 (36 O.S. Supp. 2022,
5 Section 1435.29), is amended to read as follows:
6 Section 1435.29. A. 1. Each insurance producer, with the
7 exception of title producers and aircraft title producers or any
8 other producer exempt by rule, shall, biennially, complete not less
9 than twenty-one (21) clock hours of continuing insurance education.
10 Such education may include a written or oral examination.
11 2. Licensees, with the exception of title producers and
12 aircraft title producers or any other producer exempt by rule, shall
13 complete, in addition to the foregoing, three (3) clock hours of
14 ethics course work in this same period.
15 3. Each title producer and aircraft title producer shall,
16 biennially, complete not less than sixteen (16) clock hours of
17 continuing insurance education, two (2) hours of which shall be
18 ethics course work, which shall cover the line for which the
19 producer is licensed. Such education may include a written or oral
20 examination.
21 B. 1. The Insurance Commissioner shall approve courses and
22 providers of continuing education. The Insurance Department may use
23 one or more of the following to review and provide a nonbinding
24
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1 recommendation to the Insurance Commissioner on approval or
2 disapproval of courses and providers of continuing education:
3 a. employees of the Insurance Commissioner,
4 b. a continuing education advisory committee, or
5 c. an independent service whose normal business
6 activities include the review and approval of
7 continuing education courses and providers. The
8 Commissioner may negotiate agreements with such
9 independent service to review documents and other
10 materials submitted for approval of courses and
11 providers and provide the Commissioner with its
12 nonbinding recommendation. The Commissioner may
13 require such independent service to collect the fee
14 charged by the independent service for reviewing
15 materials provided for review directly from the course
16 providers.
17 The Insurance Commissioner has sole authority to approve courses
18 and providers of continuing education. If the Insurance
19 Commissioner uses one of the entities listed above to provide a
20 nonbinding recommendation, the Commissioner shall adopt or decline
21 to adopt the recommendation within thirty (30) days of receipt of
22 the recommendation. In the event the Insurance Commissioner takes
23 no action within said thirty-day period, the recommendation made to
24
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1 the Commissioner will be deemed to have been adopted by the
2 Commissioner.
3 The Insurance Commissioner may certify providers and courses
4 offered for license examination study. The Insurance Department
5 shall use employees of the Insurance Commissioner to review and
6 certify license examination study program providers and courses.
7 2. Each insurance company shall be allowed to provide
8 continuing education to insurance producers as required by this
9 section; provided that such continuing education meets the general
10 standards for education otherwise established by the Insurance
11 Commissioner.
12 3. An insurance producer who, during the time period prior to
13 renewal, participates in a professional designation program,
14 approved by the Insurance Commissioner, shall be deemed to have met
15 the biennial requirement for continuing education.
16 The curriculum for the program shall total a minimum of twenty-
17 four (24) hours within a twenty-four-month period. Each approved
18 professional designation program included in this section shall be
19 reviewed for quality and compliance every three (3) two (2) years in
20 accordance with standardized criteria promulgated by rule.
21 Continuation of approved status is contingent upon the findings of
22 the review. The list of professional designation programs approved
23 under this paragraph shall be made available to producers and
24 providers annually.
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1 4. The Insurance Department may promulgate rules providing that
2 courses or programs offered by professional associations shall
3 qualify for presumptive continuing education credit approval. The
4 rules shall include standardized criteria for reviewing the
5 professional associations’ mission, membership, and other relevant
6 information, and shall provide a procedure for the Department to
7 disallow all or part of a presumptively approved course.
8 Professional association courses approved in accordance with this
9 paragraph shall be reviewed every three (3) two (2) years to
10 determine whether they continue to qualify for continuing education
11 credit.
12 5. Subject to approval by the Commissioner, the active
13 membership of the licensed producer or broker in local, regional,
14 state, or national professional insurance organizations or
15 associations may be approved for up to one (1) annual hour of
16 instruction. The hour shall be credited upon timely filing with the
17 Commissioner, or designee of the Commissioner, and appropriate
18 written evidence acceptable to the Commissioner of such active
19 membership in the organization or association.
20 6. The active service of a licensed producer as a member of a
21 continuing education advisory committee, as described in paragraph 1
22 of this subsection, shall be deemed to qualify for continuing
23 education credit on an hour-for-hour basis.
24
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1 C. 1. Annual fees and course submission fees shall be set
2 forth as a rule by the Commissioner. The fees are payable to the
3 Insurance Commissioner. Provided, public-funded educational
4 institutions, federal agencies, nonprofit organizations, not-for-
5 profit organizations, and state agencies shall be exempt from this
6 subsection.
7 2. The Commissioner may assess a civil penalty, after notice
8 and opportunity for hearing, against a continuing education provider
9 who fails to comply with the requirements of the Oklahoma Producer
10 Licensing Act, of not less than One Hundred Dollars ($100.00) nor
11 more than Five Hundred Dollars ($500.00), for each occurrence. The
12 civil penalty may be enforced in the same manner in which civil
13 judgments may be enforced.
14 D. Failure of an insurance producer to comply with the
15 requirements of the Oklahoma Producer Licensing Act may, after
16 notice and opportunity for hearing, result in censure, suspension,
17 nonrenewal of license or a civil penalty of up to Five Hundred
18 Dollars ($500.00) or by both such penalty and civil penalty. Said
19 civil penalty may be enforced in the same manner in which civil
20 judgments may be enforced.
21 E. Limited lines producers and nonresident agents who have
22 successfully completed an equivalent or greater requirement shall be
23 exempt from the provisions of this section.
24
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1 F. E. Members of the Legislature shall be exempt from this
2 section.
3 G. F. The Commissioner shall adopt and promulgate such rules as
4 are necessary for effective administration of this section.
5 SECTION 3. AMENDATORY 36 O.S. 2021, Section 6206, is
6 amended to read as follows:
7 Section 6206. A. The Insurance Commissioner shall license as
8 an adjuster only an individual who has fully complied with the
9 provisions of the Insurance Adjusters Licensing Act, including the
10 fur