H. B. 4706
(By Delegates Facemyer, L. White,
Stalnaker, Beane and Davis)
[Introduced February 25, 2000; referred to the
Committee on Banking and Insurance then Finance.]
A BILL to amend article twelve, chapter thirty-three of the code
of West Virginia, one thousand nine hundred thirty-one, as
amended, by adding thereto a new section, designated
thirty-four, relating to providing specialty agent licenses
for credit insurance.
Be it enacted by the Legislature of West Virginia:
That article twelve, chapter thirty-three of the code of
West Virginia, one thousand nine hundred thirty-one, as amended,
be amended by adding thereto a new section, designated
thirty-four, to read as follows:
ARTICLE 12. AGENTS, BROKERS, SOLICITORS AND EXCESS LINE.
§33-12-34. Specialty license for credit life and credit
accident and sickness insurance.
(a) Purpose. This section authorizes the insurance
commissioner to issue specialty licenses to companies for the sale of credit insurance.
(b) Definitions.
The following words when used in this section shall have the
following meanings.
(1) "Authorized insurer" means an insurer that is licensed
by the commissioner to transact insurance in West Virginia.
(2) "Company" is any firm, partnership, corporation or
limited liability company which sells credit insurance in
connection with or as a part of its primary business.
(3) "Credit insurance" means:
(A) Credit life insurance;
(B) Credit accident and sickness insurance;
(C) Credit involuntary unemployment;
(D) Credit personal property; and
(E) Any other credit related insurance approved by the
commissioner.
(4) "Managing employee" is a salaried full-time employee of
the specialty licensee that is responsible for the supervision of
the other employees engaged in the placement of insurance under
this section.
(5) "Specialty license" means the authorization by the
commissioner for a company to sell credit insurance as agent of
an authorized insurer pursuant to the provisions of this section
without the necessity of agent prelicensing education, examination or continuing education.
(6) "Specialty licensee" is the company that obtains a
specialty license.
(c) The commissioner may issue a specialty license to any
company, including, but not limited to, a retail distributor of
goods, a dealer of motor vehicles, a bank, a state or federal
savings and loan, a state or federal credit union that has
satisfied the requirements of this section.
(d) As a prerequisite for issuance of a specialty license
under this section, there shall be filed with the commissioner a
written application for a specialty license, signed by an
authorized representative of the company, in such form or forms,
and supplements thereto, and containing such information as the
commissioner may prescribe. The specialty licensee shall pay to
the insurance commissioner an annual fee of two hundred dollars.
(e) On appointment of the specialty licensee by an
authorized insurer, a specialty licensee or any employee of the
specialty licensee may act as the agent of the insurer authorized
to engage in the business of insurance under this code in the
sale of credit life or credit accident and sickness insurance.
The authority conferred under this section specifically permits
the sale of both individual and group credit insurance.
(f) A specialty license issued under this article authorizes
an employee of the specialty licensee to act as an agent with respect to the kinds of insurance specified in this article if
the employee:
(1) Has been trained with respect to disclosures that are
required to be made to customers in connection with the sale of
credit insurance;
(2) Is acting on behalf of and under the supervision of the
license holder and the managing employee; and
(3) Is not compensated based primarily on the amount of
insurance sold by the employee under this article.
(g) The specialty licensee and the managing employee shall
directly supervise and be responsible for the actions of its
employees in the offer or sale of credit insurance as authorized
by this section.
(h) In the event that any provision of this section or
applicable provisions of the insurance code is violated by a
specialty licensee or its employees operating under his or her
direction, the commissioner may:
(1) After notice and a hearing, revoke or suspend a
specialty license issued under this section in accordance with
the provisions of section thirteen, article two of this chapter;
or
(2) After notice and hearing, impose such other penalties,
including suspending the transaction of insurance where
violations of this section have occurred, as the commissioner considers to be necessary or convenient to carry out the purposes
of this section.
(i) Neither a company licensed under this article nor its
employees shall be subject to an examination for licensure or to
the continuing education requirements of section two-a, of this
article.
(j) Notwithstanding any other provision of this chapter or
any rule adopted by the commissioner, a specialty licensee is not
required to treat premiums collected from a consumer purchasing
credit insurance when completing an associated consumer
transaction as money received in a fiduciary capacity if:
(1) The insurer appointed by the specialty licensee has
consented in writing, signed by an officer of the insurer, that
premiums need not be segregated from money received by the
license holder on account of the associated consumer transaction;
and
(2) Evidence of coverage is provided to each consumer who
elects to purchase the coverage.
(k) The sale of credit insurance not in conjunction with a
consumer transaction shall not be permitted.
(1) A specialty licensee may not in any manner advertise,
represent, or otherwise hold out the specialty licensee or any
employee of the specialty licensee as a licensed insurance agent
under another section or article of this chapter unless the entity or individual actually holds the applicable license.
(m) A specialty licensee may receive commissions or other
compensation for services rendered in connection with the sale of
credit insurance under this section.
(n) The specialty licensee shall maintain a list of the
locations in this state where its employees are selling insurance
and the name and address of its managing employee. This list
shall be submitted to the commissioner annually, and any changes
to this list shall be submitted to the commissioner quarterly.
(o) Notwithstanding any other provision of this section, a
company may elect to sell credit insurance through individuals
who are licensed as agents in accordance with this article.
Under those circumstances, the company need not be licensed as a
specialty licensee under this section.
NOTE: The purpose of this bill is to provide a specialty
license for the sale of credit insurance.
§33-12-34 is new; therefore, strike-throughs and
underscoring have been omitted.