Relates to licensing and authorizing new lines of insurance; repealer

Section 2 of the bill also amends Insurance Law §§ 2101 (m), (n), and (o) by removing "licensed" to conform to the National Association of Insurance Commissioners' ("NAIC') Producer Licensing Model Act.

Section 3 of the bill amends Insurance Law § 2101(r) by renumbering paragraphs 6 and 7 as paragraphs 9 and 10, and inserting new paragraphs 6, 7, and 8 that add credit, crop, and surety, respectively, to the definition of "line of authority."

Section 4 of the bill amends Insurance Law § 2103(a) to permit the Superintendent to issue an insurance agent's license for credit insurance as provided under Insurance Law § 2101(r)(6)(A), and amends Insurance Law § 2103(b) to permit the Superintendent to issue an insurance agent's license for credit insurance as provided under Insurance Law § 2101(r)(6)(B), crop insurance, and surety insurance.

Section 5 of the bill amends Insurance Law § 2103(f) to: (1) require 20 hours of pre-licensing education per line of authority that an individual seeks to qualify for under Insurance Law § 21 03(a); (2) require 20 hours of pre-licensing education per line of authority that an individual seeks to qualify for pursuant to Insurance Law § 2103(b); and (3) require entities seeking to provide insurance agent licensing courses to file for approval with the Superintendent.

Section 6 of the bill amends Insurance Law § 2103 (g) by not requiring a written examination as a prerequisite to the issuance of a travel insurance agent's license to any ticket selling agent or representative of a railroad company, steamship company, carrier by air, public bus carrier, or other common carrier who acts as an insurance agent only in reference to insurance coverage for trip cancellation, trip interruption, baggage, life, accident and health, disability, and personal effects, when limited to a specific trip and sold in connection with transportation provided by the common carrier.

Section 6 of the bill also amends Insurance Law §§ 2103(g)(9) and (10) to give the Superintendent discretion via 3 regulation to determine which other professional designations, if held, would exempt an individual seeking to be named a licensee or sublicensee from all or any part of the insurance agent pre-licensing, written exam or prerequisite pre-licensing course as set forth in either Insurance Law §§ 2103(f)(2)(A) or (B).

Section 7 of the bill amends Insurance Law § 2104(c)(1)(A) to require an individual to complete not less than twenty hours of pre-licensing education per line of authority that an individual seeks to qualify for under Insurance Law § 2104(b) and makes technical amendments to Insurance Law §. 2104(c)(J)(B) and (C). Section 8 of the bill also amends Insurance Law § 2104(c) by renumbering paragraph (2) as paragraph (3), and adds a new paragraph (2) that requires entities seeking to provide insurance broker licensing courses to file for approval with the Superintendent.

Section 8 of the bill amends Insurance Law § 2104(e)(1)(B) by giving the Superintendent discretion via regulation to determine which other professional designations, if held, would exempt an individual seeking to be named a licensee or sublicensee from all or part of the insurance broker pre-licensing, written exam or prerequisite course as set forth in Insurance Law § 2104(c)(1)(A).

Section 9 of the bill repeals Insurance Law § 2108(d)(2), which requires an individual applying for, or renewing, an adjuster's license to submit the individual's fingerprints to the Superintendent. Since this bill adds a new catchall fingerprinting section to Article 21 of the Insurance Law, this provision is no longer necessary.

Section 10 of the bill amends Insurance Law § 2108(f)(1) to include language stating that an individual shall not be deemed qualified to take the independent adjuster exam without demonstrating that: (1) the individual possesses a minimum of one-year's experience in the insurance business, with involvement in sales, underwriting, claims, or other experience considered sufficient by the Superintendent; or (2) the individual completed forty hours of formal training in a course, program of instruction, or seminars approved by the Superintendent.

Section 11 of the bill amends Insurance Law §§ 2108(r)(1), (2), and (3)(A)(i) by changing all references to "public adjuster" to "adjuster," and making technical amendments.

Section 12 of the bill amends the Insurance Law by adding a new Insurance Law § 2113 to grant the Superintendent the authority to require an individual who is applying for a license, pursuant to Article 21 of the Insurance Law, to submit his or her fingerprints.

Section 13 of the bill amends Insurance Law § 2132(c)(1) to require that any person with an Article 21 license, who is not exempt under Insurance Law § 2132(b), must participate in 24 credit hours of continuing education. This section also permits a person licensed as an individual and acting as a sublicensee of any business entity licensed under Article 21, to count the continuing education credits accumulated to satisfy the renewal requirements for both the individual license and the sublicense, so long as the credits are for a same line of authority.

Section 14 of the bill amends Insurance Law § 2136(d) to permit the licensing of non-resident adjusters on a reciprocal basis.

Section 15 of the bill provides that it will be effective 180 days after the bill becomes law.

Existing law

The Legislature amended Article 21 of the Insurance Law as part of Chapter 687 of the Laws of 2003, by enacting many of the provisions of the NAIC Producer Licensing Model Act. This bill would complete the modernization process that the 2003 amendment initiated.

Legislative history

This bill was introduced in 2008 (S.7369A/A.10404) and passed the Senate.

Statement in support

In 2003, New York enacted a producer licensing law that permits New York's insurance agents and brokers to transact business in other states on a non-resident basis with greater ease. See Chapter 687 of the Laws of 2003. It also permits non-resident insurance producers licensed in other states to transact business in New York.

This bill builds upon the success of Chapter 687 of the Laws of 2003, and is a substantial step towards the completion of the licensing modernization process. The amendments set forth in this bill ensure that New York's producer licensing schematic is reciprocal with other states as it establishes uniform standards for licensing. The bill creates parity for the resident licensees with non-residents who achieved reciprocity by the implementation of the NAIC Producer Licensing Model Act. Other states, through the auspices of the NAIC, have agreed to uniform standards for resident licensing, the purpose of which is to increase reliance on the state-based licensing process, and create a system that prevents individuals from jurisdiction shopping.

Furthermore, this bill heightens the qualifications that individuals seeking to be licensed pursuant to Article 21 of the Insurance Law must meet. By increasing the qualifications, this bill ensures that licensees have the education and expertise necessary to perform their duties as licensees, thereby enhancing insurance consumer protection in New York State.

Budget implications

This bill will not have an impact on state finances.

Effective date

This bill would take effect on the 180th day after it becomes law.