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HOUSE BILL NO. 138

INTRODUCED BY D. FERN

BY REQUEST OF THE STATE AUDITOR

 

AN ACT REVISING INSURANCE LAWS PERTAINING TO INSURER PRODUCER APPOINTMENTS; ALLOWING APPOINTMENT BY AFFILIATION; ALLOWING APPOINTMENT THROUGH BUSINESS ENTITY AFFILIATION; REVISING APPOINTMENT NOTICE REQUIREMENTS; AMENDING SECTIONS 33-17-231 AND 33-17-236, MCA; AND PROVIDING AN IMMEDIATE EFFECTIVE DATE.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:

 

     Section 1.  Appointment by affiliation. (1) Unless prohibited by the insurer, an individual insurance producer or business entity insurance producer may satisfy the appointment requirements of 33-17-236(1) by affiliating with a business entity insurance producer that has been appointed directly by the insurer.

     (2) A business entity insurance producer obtaining an appointment by affiliation under subsection (1) shall maintain a copy of each written affiliation agreement for 3 years following termination of the affiliation and make copies of the agreement available to the commissioner upon request.

     (3) If an insurance producer is appointed by affiliation under subsection (1), the insurer is not required to file a separate notice of appointment for that insurance producer under 33-17-231(1) and 33-17-236.

     (4) An appointment by affiliation under subsection (1) is effective on the date the insurance producer enters into an affiliation agreement.

     (5) An insurance producer appointed by affiliation under this section is authorized to transact the kinds of insurance for which the business entity insurance producer directly appointed by the insurer is also authorized, except:

     (a) an insurance producer appointed by affiliation may not transact kinds of insurance for which the insurance producer is not otherwise authorized; and

     (b) the insurer may specify in writing those kinds of insurance the insurance producer may transact under the appointment.

 

     Section 2.  Section 33-17-231, MCA, is amended to read:

     "33-17-231.  Appointment of insurance producers -- continuation and termination. (1) Each Except as provided in [section 1], each insurer appointing an insurance producer in this state shall file with the commissioner the appointment, specifying the kinds of insurance to be transacted by the insurance producer for the insurer. The appointment may be electronically filed. The commissioner may adopt rules to implement electronic filing.

     (2)  Each Except as provided in [section 1], each appointment remains in effect until the insurance producer's license is revoked or otherwise terminated unless written notice of earlier termination of the appointment is filed with the commissioner by the insurer or the insurance producer. The written notice may be electronically filed. The commissioner may adopt rules to implement electronic filing. Termination of the insurer's authority in Montana also terminates the appointment.

     (3)  Subject to the insurance producer's contract rights, an insurer may terminate an insurance producer's appointment at any time. The insurer shall promptly give written notice of the termination to the commissioner and to the insurance producer, except that the insurer is not required to notify the commissioner of termination of an appointment by affiliation. The commissioner may require reasonable proof that the insurer has given notice to the insurance producer.

     (4)  As part of the notice of termination given the commissioner, the insurer shall file with the commissioner a statement of the facts relative to the termination and the cause of termination. Any information or statement contained in the notice of termination is not admissible as evidence in any action or proceeding against the insurer or any representative of the insurer by or on behalf of any person affected by the termination.

     (5)  (a) An insurer that sells a qualified health plan in an exchange operating in this state shall appoint any producer who is certified by the commissioner pursuant to 33-17-243 and follows the appointment application process required by that insurer.

     (b)  To maintain the appointment, the producer shall maintain the producer's certification and license in good standing.

     (6) An appointment by affiliation terminates automatically on termination of the affiliation."

 

     Section 3.  Section 33-17-236, MCA, is amended to read:

     "33-17-236.  Appointments of insurance producers by insurers. (1) An insurance producer may not claim to be a representative of or an authorized or appointed insurance producer of or use another term implying a contractual relationship with a particular insurer unless the insurance producer is an appointed insurance producer of that insurer pursuant to this section. This does not prevent an insurance producer from obtaining and presenting a quotation from an insurer with whom the producer is not appointed. If the insurer consents, the insurer may bind coverage on a risk in accordance with 33-15-411 prior to the execution of an agency contract and policy issuance.

     (2)  The Except as provided in [section 1], the insurer shall, not later than 15 days from the date on which the agency contract is executed with a licensed an insurance producer, file with the insurance department a written notice of appointment on a form prescribed by the insurance department. The notice may be electronically filed pursuant to rules adopted by the commissioner.

     (3)  Upon receipt of the notice of appointment, the insurance department shall verify that the licensed insurance producer is eligible for appointment. If the licensed insurance producer is determined to be ineligible for appointment, the insurance department shall notify the insurer of the determination.

     (4) (a) An Except as provided in [section 1], an appointment is effective on the earlier of the date of the executed agency contract or the date on which the insurer files the notice of appointment with the insurance department, unless the appointment is disapproved by the insurance department.

     (b) A disapproved appointment is void on the date the department provides notification to the insurer.

     (c) An appointment of which notice is not filed within 15 days of execution of the agency contract is not effective until the date that the insurer files the notice of appointment with the insurance department.

     (5)  The Except as provided in 33-17-231, the appointment is perpetual until canceled by the insurer."

 

     Section 4.  Codification instruction. [Section 1] is intended to be codified as an integral part of Title 33, chapter 17, part 2, and the provisions of Title 33, chapter 17, part 2, apply to [section 1].

 

     Section 5.  Effective date. [This act] is effective on passage and approval.

- END -

 


Latest Version of HB 138 (HB0138.ENR)
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