SB 3121, 2009 Regular Session

Jan 29, 2009      Mississippi State Legislature

SB157 105814-By Senator French RFD: Governmental Affairs First Read: 03-FEB-09 Page 0 105814-1:n:01/15/2009:JRC/mfp LRS2009-20SYNOPSIS: Under existing law, insurance producers are licensed for various lines of authority, including automobile and industrial fire. 1Under existing law, certain insurance 1producers must complete a prelicensing course of 1study before qualifying for an insurance producer license. Under existing law, administrative complaints filed by the Department of Insurance against insurance producers must be served via registered or certified mail. Under existing law, the Commissioner of Insurance is authorized to conduct background 2investigations for all applicants for licensure as 2an insurance producer prior to the issuance of the 2license. Under existing law, insurance producers are generally subject to a continuing education requirement but there are several exceptions to this requirement. Page Under existing law, insurance producers are required to certify on the license renewal form whether they have completed the continuing education requirement. This bill would do away with the insurance producer lines of authority for automobile and industrial fire and provide a transition for existing producer licenses and would add surety, travel, and crop insurance as limited lines insurance. 1This bill would also provide exceptions to 1the prelicensing course of study to qualify for an 1insurance producer license for those applicants with a college insurance degree and for applicants for the variable life and variable annuity line of authority. This bill would also provide an exception to the prelicensing examination requirement for an insurance producer license for those applicants for the variable life and variable annuity line of 2authority, but would require those applicants to be 2licensed for the life line of authority and also be 2registered under the securities law. This bill would also authorize the Commissioner of Insurance to prescribe by rule alternative methods to serve administrative complaints. Page This bill would also authorize the Commissioner of Insurance to conduct state and federal criminal history background investigations of all resident insurance producers. This bill would remove exemptions from the continuing education requirement for insurance producers, but would provide a grandfather provision for those currently exempt. This bill would do away with the requirement for insurance producers to certify on the license 1renewal form whether they have complied with the 1continuing education requirement. 1A BILL TO BE ENTITLED AN ACT Relating to insurance; to amend Sections 27-7-1, 27-7-5, 27-7-14.1, 27-7-20, 27-7-21, 27-7-37, 27-8A-1, 27-8A-6, and 27-8A-13, Code of Alabama 1975; to remove the 2insurance producer line authority for automobile and 2industrial fire and provide a transition for existing producer 2licenses; to add surety, travel, and crop insurance as limited lines insurance; to provide exceptions to the prelicensing course of study to qualify for an insurance producer license for applicants with a college insurance degree and for applicants for the variable life and variable annuity line of Page authority; to authorize the Commissioner of Insurance to prescribe by rule alternative methods to serve administrative complaints; to authorize the Commissioner of Insurance to conduct state and federal criminal history background investigations of all resident insurance producers; to remove exemptions from the continuing education requirements of insurance producers while providing a grandfather provision for those currently exempt; and to eliminate the requirement that insurance producers certify on the license renewal form whether they have complied with the continuing education 1requirement. 1BE IT ENACTED BY THE LEGISLATURE OF ALABAMA: 1Section 1. Sections 27-7-1, 27-7-5, 27-7-14.1, 27-7-20, 27-7-21, 27-7-37, 27-8A-1, 27-8A-6, and 27-8A-13, Code of Alabama 1975, are amended to read as follows: "§27-7-1. "For the purposes of this chapter, the following terms shall have the meanings respectively ascribed to them by this section: "(1) BUSINESS ENTITY. A corporation, association, 2partnership, limited liability company, limited liability 2partnership, or other legal entity. 2"(2) COMMISSIONER. The Alabama Commissioner of Insurance. "(3) HOME STATE. The District of Columbia and any state or territory of the United States in which an insurance producer maintains his or her principal place of residence or Page 4 principal place of business and is licensed to act as an insurance producer. "(4) INSURANCE. As defined in Section 27-1-2. "(5) INSURANCE PRODUCER or PRODUCER. A person required to be licensed under the laws of this state to sell, solicit, or negotiate insurance. "(6) INSURER. As defined in Section 27-1-2. For the purposes of this chapter, insurer shall also mean an insurance company licensed pursuant to Chapter 3, commencing with Section 27-3-1 of this title; a health care service plan 1licensed pursuant to Article 6, commencing with Section 110-4-100 of Chapter 4 of Title 10; a dental service 1corporation licensed pursuant to Article 12, commencing with Section 22-21-360 of Chapter 21 of Title 22; a health maintenance organization licensed pursuant to Chapter 21A, commencing with Section 27-21A-1 of this title; a mutual aid association licensed pursuant to Chapter 30, commencing with Section 27-30-1 of this title; a fraternal benefit society licensed pursuant to Chapter 34, commencing with Section 27-34-1 of this title; an automobile club or association 2licensed pursuant to Chapter 39, commencing with Section 227-39-1 of this title; and a legal service insurance 2corporation licensed pursuant to Chapter 43, commencing with Section 27-43-1 of this title. "(7) LICENSE. A document issued by the commissioner authorizing a person to act as an insurance producer for the lines of authority specified in the document. The license Page 5 itself does not create any authority, actual, apparent, or inherent, in the holder to represent or commit an insurance carrier. "(8) LICENSEE. A producer or service representative licensed in accordance with this chapter. "(8) (9) LIFE LINES OF AUTHORITY. Any one or more of the following lines as defined in Section 27-7-14.1: Life; accident and health or sickness, also known as disability; and variable life and variable annuity products. "(9) (10) LIMITED LINE CREDIT INSURANCE. Credit 1life, credit disability, credit property, credit unemployment, 1creditor-placed, also known as forced-placed, nonfiling, 1involuntary unemployment, mortgage life, mortgage guaranty, mortgage disability, guaranteed automobile protection (GAP), family and medical leave insurance, and any other form of insurance offered in connection with an extension of credit that is limited to partially or wholly extinguishing that credit obligation that the commissioner determines should be designated a form of limited line credit insurance. "(10) (11) LIMITED LINE CREDIT INSURANCE PRODUCER. A 2person who sells, solicits, or negotiates one or more forms of 2limited line credit insurance coverage to individuals through 2a master, corporate, group, or individual policy. "(11) (12) LIMITED LINES INSURANCE. Limited line credit insurance, insurance on rental vehicles defined in Section 27-7-5.1, surety, travel, and crop insurance as defined in Section 27-7-14.1, and any other line of insurance Page 6 that the commissioner deems necessary to recognize for the purposes of complying with subsection (e) of Section 27-7-28. "(12) (13) LIMITED LINES PRODUCER. A person authorized by the commissioner to sell, solicit, or negotiate limited lines insurance. "(13) (14) NAIC. The National Association of Insurance Commissioners. "(14) (15) NEGOTIATE. The act of conferring directly with or offering advice directly to a purchaser or prospective purchaser of a particular contract of insurance concerning any 1of the substantive benefits, terms, or conditions of the 1contract, provided that the person engaged in that act either 1sells insurance or obtains insurance from insurers for purchasers. "(15) (16) PERSON. An individual or a business entity. "(16) (17) PROPERTY LINES OF AUTHORITY. Any one or more of the following lines as defined in Section 27-7-14.1: Property; casualty; and personal lines; and automobile. "(17) (18) SELL. To exchange a contract of insurance 2by any means, for money or its equivalent, on behalf of an 2insurance company. 2"(18) (19) SERVICE REPRESENTATIVE. A natural person, other than an officer, manager, or managing general agent of the insurer, employed on salary or at an hourly rate by an insurer, managing general agent, or a captive producer to work for, with or through producers in selling, soliciting, or Page 7 negotiating insurance in the insurer or in the insurers represented by the managing general agent or a captive producer, but only in the property lines of authority. Officers and salaried nonresident traveling representatives of a mutual insurer operating on the premium deposit plan or of a reciprocal insurer not using resident producers for the solicitation of business who inspect risks or solicit insurance in this state and who receive no commissions from the insurer shall be deemed also to be service representatives. A service representative shall otherwise 1qualify and be licensed as a service representative under this 1chapter, but shall not be required to take and pass an 1examination nor be a resident of Alabama if qualified as a service representative in the state of his or her domicile. The service representative must be appointed for each insurer or association of insurers represented and for each class of insurance handled by the insurer or insurers in this state. "(19) (20) SOLICIT. Attempting to sell insurance or asking or urging a person to apply for a particular kind of insurance from a particular company. 2"(20) (21) TERMINATE. The cancellation of the 2relationship between an insurance producer and the insurer or 2the termination of a producer's authority to transact insurance. "(21) (22) UNIFORM BUSINESS ENTITY APPLICATION. The current version of the NAIC Uniform Business Entity Application for resident and nonresident business entities. Page 8 "(22) (23) UNIFORM APPLICATION. The current version of the NAIC Uniform Application for resident and nonresident producer licensing. "§27-7-5. "(a) An individual applying for a resident insurance producer license shall make application to the commissioner on the Uniform Application, and an individual applying for a service representative license shall make application to the commissioner on the application prescribed by the commissioner, each declaring under penalty of refusal, 1suspension, or revocation of the license that the statements 1made in the application are true, correct, and complete to the 1best of the individual's knowledge and belief. Before approving the application, the commissioner shall find that the individual has satisfied all of the following: "(1) The individual is at least 18 years of age. "(2) The individual has not committed any act that is a ground for denial, suspension, or revocation set forth in Section 27-7-19. "(3) The individual has completed a prelicensing 2course of study for the lines of authority for which the 2person has applied, consisting of 20 classroom hours per line 2of authority, or equivalent individual instruction, on the general principles of insurance for that line of authority, the course to be taught only by those educational institutions, junior or senior colleges, technical colleges, trade schools, insurance companies, or insurance trade Page 9 organizations which hold written authority from the commissioner to issue certificates of completion. "a. Each authority holder must apply annually for the continued authority to issue certificates under rules and regulations to be prescribed by the commissioner. "b. Prior to writing the designated examination for license, the applicant must furnish a certificate of completion of the aforesaid prelicensing course from the authorized educational institution, insurance company, or insurance trade organization. 1"c. All applicants for a license to transact the 1life lines of authority who are holders of the professional 1designation chartered life underwriter (CLU); all applicants for a license to transact the property lines of authority who are holders of the professional designations chartered property casualty underwriter (CPCU) or certified insurance counselor (CIC); or other similar professional insurance designations as the commissioner may prescribe by regulation shall be deemed to have completed the prelicensing course as prescribed in this subdivision. 2"d. All applicants with a college insurance degree 2are exempt from the requirements of this subdivision for all 2lines of authority. "d. e. All applicants for a license to transact only the following lines of authority shall be exempt from the requirements of this subdivision: Page "1. Industrial fire, commonly known as debit fire, insurance Variable life and variable annuity products. "2. Limited lines insurance. "e. f. All producers and service representatives who are lawfully licensed as such for a particular line of authority as an agent, broker, solicitor, or service representative immediately prior to January 1, 2002, the effective date of this amendatory act are exempt from the requirements of this subdivision for that line of authority unless, after January 1, 2002 the effective date of this 1amendatory act, the license is permitted to expire or is 1otherwise terminated and remains out of effect for a period of 112 consecutive months, in which case the exemption from the prelicensing course shall no longer be applicable. "(4) The individual has successfully passed the examination for the lines of authority for which the individual has applied, except that no examination shall be required of an applicant as follows: "a. All applicants for a license to transact only one or more of the limited lines insurance. 2"b. All applicants for a license to transact the 2life lines of authority who are holders of the professional 2designation chartered life underwriter (CLU) variable life and variable annuity products line of authority. "c. All applicants for a license to transact the property lines of authority who are holders of the Page 1professional designation chartered property casualty underwriter (CPCU) or certified insurance counselor (CIC). "d. The commissioner may prescribe by regulation other similar professional insurance designations as exemptions from the examination requirement for particular lines of authority. "e. c. All producers lawfully licensed as such for a particular line of authority as an agent, broker, solicitor, or service representative immediately prior to January 1, 2002, the effective date of this amendatory act are exempt 1from the requirements of this subdivision for that line of 1authority unless, after January 1, 2002 the effective date of 1this amendatory act, the license is permitted to expire or is otherwise terminated and remains out of effect for a period of 12 consecutive months, in which case the exemption from examination shall no longer be applicable. "f. d. All service representatives. "(5) The individual has paid the fees set forth in Section 27-4-2. "(6) All producers seeking to be licensed for or 2holding the variable life and variable annuity product line of 2authority must also hold the life line of authority as an 2insurance producer and must also successfully complete the appropriate securities examinations and be registered under the securities law. "(b) A business entity acting as an insurance producer is required to obtain an insurance producer license. Page 1Application shall be made using the Uniform Business Entity Application. Before approving the application, the commissioner shall find that the business entity has satisfied all of the following: "(1) A licensed individual producer has been designated responsible for the business entity's compliance with the insurance laws, rules, and regulations of this state. "(2) The business entity has paid the fees set forth in Section 27-4-2. "(c) The commissioner may require any documents 1reasonably necessary to verify the information contained in an 1application. 1"(d) Each 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. "§27-7-14.1. "(a) Unless denied licensure pursuant to Section 27-7-19, persons who have met the requirements of Sections 227-7-4.3 and 27-7-5 shall be issued an insurance producer 2license. An insurance producer may receive qualification for a 2license in one or more of the following lines of authority: "(1) LIFE. Insurance coverage on human lives including benefits of endowment and annuities, and may include benefits in the event of death or dismemberment by accident and benefits for disability income. Page 1"(2) ACCIDENT AND HEALTH OR SICKNESS, commonly known as disability. Insurance coverage for sickness, bodily injury, or accidental death and may include benefits for disability income. "(3) PROPERTY. Insurance coverage for the direct or consequential loss or damage to property of every kind. "(4) CASUALTY. Insurance coverage against legal liability, including that for death, injury, or disability or damage to real or personal property, and surety. "(5) VARIABLE LIFE and VARIABLE ANNUITY PRODUCTS. 1Insurance coverage provided under variable life insurance 1contracts and variable annuities. 1"(6) PERSONAL LINES. Property and casualty insurance coverage sold to individuals and families for primarily noncommercial purposes. "(7) CREDIT. Limited line credit insurance. "(8) BAIL BOND. Surety coverage for bail, as defined in Chapter 13 of Title 15. "(9) AUTOMOBILE. Property and casualty coverage for automobiles. 2"(10) INDUSTRIAL FIRE, commonly known as debit fire. 2Fire insurance sold through a debit agency system, in 2accordance with regulations promulgated by the commissioner. "(11) (9) RENTAL VEHICLE. As described in Section 27-7-5.1. "(10) CROP. Insurance providing protection against damage to crops from unfavorable weather conditions, fire or Page lightning, flood, hail, insect infestation, disease, or other yeild-reducing conditions or perils provided by the private insurance market, or that is subsidized by the Federal Crop Insurance Corporation, including Multi-Peril Crop Insurance. "(11) SURETY. Insurance or bond that covers obligations to pay the debts or answer for the default of another, including faithlessness in a position of public or private trust. For the purpose of limited line licensing, surety does not include bail bonds. "(12) TRAVEL. Insurance coverage for trip 1cancellation, trip interruptions, baggage, life, sickness and 1accident, disability, and personal effects when limited to a 1specific trip and sold in connection with transportation provided by a common carrier. "(12) (13) Any other line of insurance permitted under state laws or regulations. "(b) Unless denied licensure pursuant to Section 27-7-19, persons who have met the requirements of Section 27-7-5 shall be issued a service representative license. A service representative shall receive qualification for a 2license in the following lines of authority: 2"(1) PROPERTY. Insurance coverage for the direct or 2consequential loss or damage to property of every kind. "(2) CASUALTY. Insurance coverage against legal liability, including that for death, injury, or disability or damage to real or personal property, and surety. Page "(c) An insurance producer or service representative license shall remain in effect unless revoked or suspended as long as the license renewal fee set forth in Section 27-8A-9 is paid and education requirements for resident individual producers and service representatives set forth in Chapter 8A of this title are met by the due date. "(d) An individual insurance producer who allows his or her license to lapse may, within 12 months from the due date of the renewal fee, reinstate the same license without the necessity of completing the prelicensing course or passing 1a written examination; a service representative who allows his 1or her license to lapse may, within 12 months from the due 1date of the renewal fee, reinstate the same license without the necessity of completing the prelicensing course; however, a penalty in the amount of double the unpaid renewal fee shall be required for any renewal fee received after the due date. "(e) A licensed insurance producer or service representative who is unable to comply with license renewal procedures due to military service or some other extenuating circumstance, e.g., a long-term medical disability, may 2request a waiver of those procedures. The producer or service 2representative may also request a waiver of any examination 2requirement or any other fine or sanction imposed for failure to comply with renewal procedures. "§27-7-20. "The commissioner shall institute a proceeding to suspend or revoke a license against a licensee for the Page imposition of a penalty set forth in Section 27-7-19 by filing and serving a complaint as to the licensee, giving notice thereof to all interested parties the licensee is licensed or appointed to represent, and otherwise proceeding as provided in Section 27-7-37. The commissioner is not required to swear to such a complaint. "§27-7-21. "Upon refusal to renew or upon suspension or revocation of any license instituting a proceeding against a licensee for the imposition of a penalty set forth in Section 127-7-19, the commissioner shall forthwith give written notice 1thereof to the licensee and all persons and insurers 1represented by the licensee and of record in the commissioner's office. The notice shall state the grounds for the commissioner's action. If a proceeding as provided for in Section 27-7-37 has not already been had as to such action, upon written demand of any interested party feeling aggrieved and filed with the commissioner within 10 days after the above notice, the commissioner shall institute a complaint against the licensee under Section 27-7-37 within 10 days after 2receipt of the demand. 2"§27-7-37. 2"(a) Any person having an interest and feeling aggrieved may file a complaint with the commissioner against any licensed agent, solicitor, broker insurance producer, managing general agent or service representative for the purpose of revocation or suspension of his license seeking the Page imposition of a penalty against the licensee as set forth in Section 27-7-19. The complaint shall be in writing and shall specify in reasonable detail the charge or charges made, the truth of which shall be sworn to by the complainant or some other person who has knowledge of the facts averred. "(b) If, upon reviewing the complaint, the commissioner finds that the charges made therein constitute grounds for the revocation or suspension of the license under imposition of a penalty against the licensee set forth in Section 27-7-19, he the commissioner shall forthwith notify 1the licensee against whom the complaint has been made and 1serve him the licensee with a copy of the complaint. Service 1of the notice and copy of the complaint made shall be sent by registered or certified mail, addressed to the licensee at the address shown by the records of the commissioner, return receipt requested and marked "deliver addressee only." The commissioner shall, by regulation, prescribe the methods through which service is made, which methods may include personal service, service by first class or certified mail, service by publication, or such other alternative or dual 2methods of service as the commissioner may determine to be 2reasonably calculated to furnish notice under the 2circumstances. "(c) Within 30 days after service upon the licensee of the copy of the complaint made against him, the licensee shall file with the commissioner his an answer in writing to the charges, either specifically admitting or denying or Page specifically confessing and avoiding each of the charges made. If the licensee against whom the complaint has been made stands in default for answer, the charges set forth in the complaint shall be taken as admitted. "(d) After receipt of the licensee's answer, the commissioner shall fix a time and place for the hearing of the complaint at his the commissioner's office or elsewhere as provided in Section 27-2-30 and shall serve notice thereof upon the licensee and the complainant by registered or certified mail as provided in subsection (b) of this section 1with respect to service of the complaint upon the licensee; 1such notice shall be served at least 20 days before the date 1fixed for the hearing. "(e) At the time fixed by the commissioner for the hearing, the complaint shall be heard before the commissioner or a deputy appointed by him the commissioner, and the complainant and licensee may each be represented by an attorney-at-law and may give the testimony and offer proof, documentary or ore tenus, as to the truth of the charges and any denial thereof. 2"(f) The commissioner shall have any power of 2subpoena, subpoena duces tecum or discovery obtaining in the 2circuit courts of this state, and any party shall have the right, upon request in writing filed with the commissioner, to cause a writ of subpoena to issue out of the office of the commissioner which shall be signed by him the commissioner or his or her deputy and directed to the sheriff of any county of Page this state returnable to the office of the commissioner. The cost of issuing and serving subpoenas and witness fees shall be the same as such costs and fees in the circuit court and shall be recoverable by the prevailing party from the other party. The commissioner shall tax such costs, and, upon the same not being paid within a period of 10 days therefrom, payment thereof may be enforced in any court having jurisdiction over the person of the defaulting party. "(g) The testimony may be taken orally or by deposition, and any party shall have the right of introducing 1proof by deposition as may obtain in the circuit courts of 1this state. 1"(h) The commissioner or his a deputy appointed by the commissioner shall preside over the hearing and shall make a written finding of facts upon which his or her decisions shall be based. "(i) The commissioner shall, within 30 days after the conclusion of the hearing, make a ruling in writing fully disposing of the complaint and a copy of the ruling shall be served upon the complainant, the licensee and all interested 2parties represented by the licensee, by registered or 2certified mail as provided in subsection (b) of this section 2with respect to service of the complaint upon the licensee, addressed to the licensee at the address shown by the records of the commissioner. "(j) Pursuant to such hearing, if the commissioner finds that the grounds therefor exist under Section 27-7-19, Page he the commissioner may suspend or revoke the licenses of impose the penalties set forth in Section 27-7-19 against the licensee complained against. "§27-8A-1. "(a) Any natural person individual licensed in this state as an insurance producer or service representative for the lines of insurance listed in subsection (b), and not exempt under subsection (c), shall satisfactorily complete a minimum of classroom hours biennially of courses, programs of instruction, or seminars as may be approved by the 1commissioner pursuant to this chapter, three hours of which 1shall be on the topic of insurance producer ethics or business 1practices. No person holding licenses for more than one line or type of insurance shall be required to complete a greater number of classroom hours than is required of a person holding a license for a single line or type of insurance. "(b) This chapter shall apply to all natural persons individuals licensed in this state as insurance producers and service representatives for the following kinds of insurance: "(1) The life lines of authority. 2"(2) The property lines of authority. 2"(3) All other lines of insurance for which an 2examination is required for licensing. "(4) Any combination thereof. "(c) The continuing education requirements of this chapter shall not apply to: Page 2"(1) Any person exempt from licensing pursuant to subsection (b) of Section 27-3-27. "(2) Any person licensed only for any kind or kinds of insurance for which an examination is not required by law of this state. "(3) Any person licensed only for limited lines insurance, industrial fire, commonly known as debit fire, insurance, or any combination thereof. "(4) All producers and service representatives licensed in this state for 15 years and at least 60 years of 1age or older. 1"(5) Any person who holds a designation as a 1Chartered Property and Casualty Underwriter, Certified Insurance Counselor, Chartered Life Underwriter, Chartered Financial Consultant, Certified Financial Planner certificant, Registered Health Underwriter, Registered Employee Benefits Consultant, Certified Health Consultant, or Associate Risk Manager. "(6) (4) Newly licensed producers and service representatives for 12 months following the effective date of 2their license. 2"(7) Officers of insurers who are not engaged in the 2active sale of products. "(8) Persons who are active members of the Alabama Legislature during any portion of the biennial reporting period. Page 2"(d) Up to hours of excess classroom hours completed during any two-year period may be carried forward to the next biennial reporting period. "(e) In lieu of the hours required in subsection (a), any producer or service representative employed by another producer or by an insurer to work only in the office of the employer and who is not licensed as a nonresident in any other state shall satisfactorily complete a minimum of classroom hours biennially, one and one-half hours of which shall be on the topic of insurance producer ethics or business 1practices. 1"(e) Any licensee entitled to a reduced hour 1requirement or exempt from the requirements of this section immediately prior to the effective date of this amendatory act shall continue to be entitled to a reduced hour requirement or exempt from the requirements of this section after the effective date of this amendatory act, for so long as the licensee remains eligible for the reduced hour requirement or exempt as set forth in this section as it existed immediately prior to the effective date of this amendatory act, unless the 2license is permitted to expire or is otherwise terminated and 2remains out of effect for a period of 12 consecutive months, 2in which case the reduced hour requirement or exemption shall no longer be applicable. "§27-8A-6. "The department's application for a license renewal form shall include a question asking if the producer has met Page 2the state's continuing education requirements as set forth in this chapter, and by signing the application, he or she certifies the answer of yes or no as being a correct statement. Such certification statement may be answered either by the producer, the employer of the producer, or any insurer with which the producer is appointed. In answering the certification statement, the employer or insurer shall be entitled to rely on and act upon the oral or written statement of the producer regarding whether the producer has met the state's continuing education requirements, what courses, 1programs, or seminars of instruction were taken and the number 1of hours involved. Neither the an employer of a licensee nor 1the any insurer appointing a licensee shall be responsible or liable in any way for the failure of any producer licensee to meet the requirements of this chapter or to maintain the necessary records. No employer or insurer shall be required to investigate or inquire whether the producer has met the requirements specified herein prior to the agent individual becoming licensed appointed as a producer licensee for the employer or insurer. The responsibility for complying with the 2requirements of this chapter Sections 27-8A-1 and 27-8A-2shall rest solely on the producer licensee. 2"§27-8A-13. "The commissioner may conduct background investigations, to include criminal history inquiries, for all applicants for license as an insurance producer prior to the issuance of the license. Page "(a) In furtherance of the national goal of promoting uniformity and reciprocity among the states with regard to producer licensing, this section sets forth the requirements to obtain access to the Federal Bureau of Investigation Criminal Justice Information Services Division criminal history record information and to secure information or reports from the Federal Bureau of Investigation Criminal Justice Information Services Division. The scope of this section is to set forth the applicability of the criminal history record check to applicants for a home state insurance 1producer license. 1"(b) As used in this section, the following terms 1have the meanings ascribed in this subsection, unless a different meaning is clearly required by the context: "(1) APPLICANT. "a. An individual applying for any of the following: "1. An initial home state license as an insurance producer. "2. An additional line of authority under an existing home state insurance producer license where a 2criminal history record check has not been obtained. 2"3. A resident insurance producer licensed under 2change of home state provisions. "b. Applicant does not mean a person applying for renewal or continuation of a home state insurance producer license or a nonresident insurance producer license. Page "(2) FINGERPRINT. An impression of the lines on the finger taken for the purpose of identification. The impression may be obtained electronically or in ink converted to an electronic format. "(c) In order to make a determination of license eligibility, the commissioner is authorized to require fingerprints of applicants and to submit the fingerprints and the fee required to perform the criminal history record checks to the Alabama Department of Public Safety and to the Federal Bureau of Investigation for the state and national criminal 1history record checks. 1"(d) The commissioner shall require a criminal 1history record check on each applicant in accordance with this section. The commissioner shall require each applicant to submit a full set of fingerprints, including a scanned file from a hard copy fingerprint, in order for the commissioner to obtain and receive national criminal history records from the Federal Bureau of Investigation Criminal Justice Information Services Division. "(e) The commissioner shall collect a fee from each 2applicant in an amount established by regulation. The amount 2of the fee must be sufficient to cover both of the following: 2"(1) The cost of the collection and transmittal of fingerprints by persons, including local law enforcement agencies that are approved by the commissioner to capture fingerprints, to the Alabama Department of Public Safety and the Federal Bureau of Investigation. Page "(2) The cost of any amounts charged by the Department of Public Safety and the Federal Bureau of Investigation to perform the criminal history record checks. "(f) The commissioner may contract for the collection and transmission of fingerprints authorized under this section and may order that the fee for collecting and transmitting fingerprints be payable directly to the contractor by the applicant. "(g) The commissioner is authorized to receive criminal history record information directly from the Federal 1Bureau of Investigation in lieu of via transmission of the 1information from the Federal Bureau of Investigation to the 1Alabama Department of Public Safety. "(h) The commissioner shall treat and maintain an applicant's fingerprints and any criminal history record information obtained under this section as confidential and shall apply security measures consistent with the Federal Bureau of Investigation Criminal Justice Information Services Division standards for the electronic storage of fingerprints and necessary identifying information. The commissioner shall 2limit the use of records solely to the purposes authorized in 2this section. The fingerprints and the criminal history record 2information in the custody of the commissioner shall not be subject to subpoena, other than one issued in a criminal action or investigation, and shall be confidential by law and privileged and shall not be subject to discovery or admissible in evidence in any private civil action. Page "(i) The commissioner may promulgate such rules as are necessary for the administration of this section." Section 2. (a) Every license for the automobile and industrial fire lines of authority in force immediately prior to the effective date of this act and existing under any law amended by this act is valid until its expiration date on or after the effective date of this act, unless earlier terminated in accordance with applicable law. Upon the next renewal of a license for the automobile line of authority, the license shall be replaced with a license for the personal 1lines of authority. Upon the next renewal of a license for the 1industrial fire line of authority, the license shall be 1replaced with a license for the property line of authority. (b) Any appointment for the automobile or industrial fire line of authority in place immediately prior to the effective date of this act and existing under any law amended by this act is valid until its expiration date on or after the effective date of this act, unless earlier terminated in accordance with applicable law. Upon the next renewal of an appointment for the automobile line of authority, the 2appointment shall be replaced with an appointment for the 2personal lines of authority. Upon the next renewal of an 2appointment for the industrial fire line of authority, the appointment shall be replaced with an appointment for the property line of authority, and the appointments shall thereafter be subject to continuation or termination as though originally issued in accordance with this act. Page 28 Section 3. This act shall become effective on the first day of the third month following its passage and approval by the Governor, or its otherwise becoming law. Page 29

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