Section | Headnote |
---|---|
60K.01 | Definitions. |
60K.02 | Insurance agents; solicitors license. |
60K.03 | License application. |
60K.04 | Township mutual agents. |
60K.05 | Fraternal benefit society representatives. |
60K.06 | Fees. |
60K.07 | Temporary licenses. |
60K.08 | Repealed, 1999 c 177 s 88 |
60K.081 | Brokerage business. |
60K.09 | Unfit person not to be employed by insurer. |
60K.10 | Term of appointments. |
60K.11 | Denial, revocation, suspension, and censure of licenses. |
60K.12 | Tax clearance certificate. |
60K.13 | Surrender, loss, or destruction of license. |
60K.14 | Prohibited acts; required acts. |
60K.15 | Insurer's agent. |
60K.16 | Liability for placing insurance in unauthorized company. |
60K.17 | Agents; variable contracts. |
60K.18 | Altering existing policies; written binders required. |
60K.19 | Continuing insurance education. |
60K.20 | Social security numbers of licensed agents; commissioner's authority to provide to NAIC. |
60K.30 | Purpose and scope. |
60K.31 | Definitions. |
60K.32 | License required. |
60K.33 | Criminal penalty. |
60K.34 | Exceptions to licensing. |
60K.35 | Fraternal benefit society representatives. |
60K.36 | Examinations. |
60K.37 | Application for license. |
60K.38 | License. |
60K.39 | Nonresident licensing. |
60K.40 | Individuals licensed in another state; exemption from examination. |
60K.41 | Assumed names. |
60K.42 | Temporary licensing. |
60K.43 | License denial, nonrenewal, or revocation. |
60K.44 | Tax clearance certificate. |
60K.45 | Surrender of license. |
60K.46 | Required acts. |
60K.47 | Liability for placing insurance in unauthorized company. |
60K.48 | Commissions. |
60K.49 | Appointments. |
60K.50 | Limitation on appointments. |
60K.51 | Notification to commissioner of termination. |
60K.52 | Use and sharing of licensing and investigative data. |
60K.53 | Reciprocity. |
60K.54 | Reporting of actions. |
60K.55 | Fees. |
60K.56 | Continuing insurance education. |
60K.01 Definitions.
Unless the language or context clearly indicates that a different meaning is intended, the definitions in section 60A.01 are applicable to this chapter.
HIST: 1992 c 564 art 3 s 3
* NOTE: This section is repealed by Laws 2001, chapter 117, article *1, section 28, effective July 1, 2002. Laws 2001, chapter 117, article *1, section 29.
60K.02 Insurance agents; solicitors license.
Subdivision 1. Requirement. No person shall act or assume to act as an insurance agent in the solicitation or procurement of applications for insurance, nor in the sale of insurance or policies of insurance, nor in any manner aid as an insurance agent in the negotiation of insurance by or with an insurer, including resident agents or reciprocal or interinsurance exchanges and fraternal benefit societies, until that person obtains from the commissioner a license for that purpose. The license must specifically set forth the name of the person authorized to act as an agent and the class or classes of insurance for which that person is authorized to solicit or countersign policies. An insurance agent may qualify for a license to sell: (1) life and health; (2) life and health and variable contracts; (3) property and casualty; (4) travel baggage; (5) bail bonds; (6) title insurance; and (7) farm property and liability.
No insurer shall appoint or reappoint a natural person, partnership, or corporation to act as an insurance agent on its behalf until that natural person, partnership, or corporation obtains a license as an insurance agent.
Subd. 2. Partnerships and corporations. A license issued to a partnership or corporation must be solely in the name of the entity to which it is issued; provided that each partner, director, officer, stockholder, or employee of the licensed entity who is personally engaged in the solicitation or negotiation of a policy of insurance on behalf of the licensed entity shall be personally licensed as an insurance agent.
Upon request by the commissioner, each partnership and corporation licensed as an insurance agent shall provide the commissioner with a list of the names of each partner, director, officer, stockholder, and employee who is required to hold a valid insurance agent's license.
Subd. 3. Transition. (a) Any agent who is qualified for life or accident and health as of June 1, 1981, is qualified for a life and health license under Laws 1981, chapter 307, and is appointed by an insurer which has submitted a written requisition for a license for that agent as of June 1, 1981.
(b) Any agent who is qualified for one or more lines of insurance, excluding life or accident and health and farm property liability as of June 1, 1981, is qualified for a property and casualty license under Laws 1981, chapter 307, and is appointed by any insurer which has submitted a written requisition for a license for that agent as of June 1, 1981.
Subd. 4. Criminal penalties. A person who acts or assumes to act as an insurance agent without a valid license issued by the commissioner is guilty of a gross misdemeanor.
HIST: 1992 c 564 art 3 s 4; 1999 c 177 s 29
* NOTE: This section is repealed by Laws 2001, chapter 117, article *1, section 28, effective July 1, 2002. Laws 2001, chapter 117, article *1, section 29.
60K.03 License application.
Subdivision 1. Procedure. An application for a license to act as an insurance agent shall be made to the commissioner by the person who seeks to be licensed. The application for license shall be accompanied by a written appointment from an admitted insurer authorizing the applicant to act as its agent under one or both classes of license. The insurer must also submit its check payable to the state treasurer for the amount of the appointment fee prescribed by section 60A.14, subdivision 1, paragraph (c), clause (6), at the time the agent becomes licensed. The application and appointment must be on forms prescribed by the commissioner.
If the applicant is a natural person, no license shall be issued until that natural person has become qualified.
If the applicant is a partnership or corporation, no license shall be issued until at least one natural person who is a partner, director, officer, stockholder, or employee shall be licensed as an insurance agent.
Subd. 2. Resident agent. The commissioner shall issue a resident insurance agent's license to a qualified resident of this state as follows:
(a) A person may qualify as a resident of this state if that person resides in this state or the principal place of business of that person is maintained in this state. Application for a license claiming residency in this state for licensing purposes constitutes an election of residency in this state. A license issued upon an application claiming residency in this state is void if the licensee, while holding a resident license in this state, also holds, or makes application for, a resident license in, or thereafter claims to be a resident of, any other state or jurisdiction or if the licensee ceases to be a resident of this state; provided, however, if the applicant is a resident of a community or trade area, the border of which is contiguous with the state line of this state, the applicant may qualify for a resident license in this state and at the same time hold a resident license from the contiguous state.
(b) The commissioner shall subject each applicant who is a natural person to a written examination as to the applicant's competence to act as an insurance agent. The examination must be held at a reasonable time and place designated by the commissioner.
(c) The examination shall be approved for use by the commissioner and shall test the applicant's knowledge of the lines of insurance, policies, and transactions to be handled under the class of license applied for, of the duties and responsibilities of the licensee, and pertinent insurance laws of this state.
(d) The examination shall be given only after the applicant has completed a program of classroom studies in a school, which shall not include a school sponsored by, offered by, or affiliated with an insurance company or its agents; except that this limitation does not preclude a bona fide professional association of agents, not acting on behalf of an insurer, from offering courses. The course of study shall consist of 30 hours of classroom study devoted to the basic fundamentals of insurance for those seeking a Minnesota license for the first time, 15 hours devoted to specific life and health topics for those seeking a life and health license, and 15 hours devoted to specific property and casualty topics for those seeking a property and casualty license. Of the 30 hours of required classroom study, at least three hours must be devoted to state insurance laws, regulations, and rules. The program of studies or study course shall have been approved by the commissioner in order to qualify under this paragraph. If the applicant has been previously licensed for the particular line of insurance in the state of Minnesota, the requirement of a program of studies or a study course shall be waived. A certification of compliance by the organization offering the course shall accompany the applicant's license application. This program of studies in a school or a study course shall not apply to farm property perils and farm liability applicants, or to agents writing such other lines of insurance as the commissioner may exempt from examination by order.
(e) The applicant must pass the examination with a grade determined by the commissioner to indicate satisfactory knowledge and understanding of the class or classes of insurance for which the applicant seeks qualification. The commissioner shall inform the applicant as to whether or not the applicant has passed. Examination results are valid for a period of three years from the date of the examination.
(f) An applicant who has failed to pass an examination may take subsequent examinations. Examination fees for subsequent examinations shall not be waived.
(g) Any applicant for a license covering the same class or classes of insurance for which the applicant was licensed under a similar license in this state, other than a temporary license, within the three years preceding the date of the application shall be exempt from the requirement of a written examination, unless the previous license was revoked or suspended by the commissioner. An applicant whose license is not renewed under section 60K.12 is exempt from the requirement of a written examination.
Subd. 3. Nonresident agent. The commissioner shall issue a nonresident insurance agent's license to a qualified person who is a resident of another state or country as follows:
(a) A person may qualify for a license under this section as a nonresident only if that person holds a license in another state, province of Canada, or other foreign country which, in the opinion of the commissioner, qualifies that person for the same activity as that for which a license is sought.
(b) The commissioner shall not issue a license to a nonresident applicant until that person files with the commissioner a designation of the commissioner and the commissioner's successors in office as the applicant's true and lawful attorney upon whom may be served all lawful process in an action, suit, or proceeding instituted by or on behalf of an interested person arising out of the applicant's insurance business in this state. This designation constitutes an agreement that this service of process is of the same legal force and validity as personal service of process in this state upon that applicant.
Service of process upon a licensee in an action or proceeding begun in a court of competent jurisdiction of this state may be made in compliance with section 45.028, subdivision 2.
(c) A nonresident agent shall be held to the same knowledge of state insurance law, regulations, and rules as that required of a resident agent according to subdivision 2, paragraph (d).
(d) A nonresident license terminates automatically when the resident license for that class of license in the state, province, or foreign country in which the licensee is a resident is terminated for any reason.
Subd. 4. Term. All licenses issued pursuant to this section remain in force until voluntarily terminated by the licensee, not renewed as prescribed in section 60K.06, or until suspended or revoked by the commissioner. A voluntary termination occurs when the license is surrendered to the commissioner with the request that it be terminated or when the licensee dies, or when the licensee is dissolved or its existence is terminated. In the case of a nonresident license, a voluntary termination also occurs upon the happening of the event described in subdivision 3, paragraph (c).
Every licensed agent shall notify the commissioner within ten days of a change of name, address, or information contained in the application.
Subd. 5. Subsequent appointments. A person who holds a valid agent's license from this state may solicit applications for insurance on behalf of an admitted insurer with which the licensee does not have a valid appointment on file with the commissioner; provided that the licensee has permission from the insurer to solicit insurance on its behalf and, provided further, that the insurer upon receipt of the application for insurance submits a written notice of appointment to the commissioner accompanied by its check payable to the state treasurer in the amount of the appointment fee prescribed by section 60A.14, subdivision 1, paragraph (c), clause (6). The notice of appointment must be on a form prescribed by the commissioner.
Subd. 6. Amendment of license. An application to the commissioner to amend a license to reflect a change of name, or to include an additional class of license, or for any other reason, shall be on forms provided by the commissioner and shall be accompanied by the applicant's surrendered license and a check payable to the state treasurer for the amount of fee specified in section 60K.06, subdivision 2, paragraph (a).
An applicant who surrenders an insurance license pursuant to this subdivision retains licensed status until an amended license is received.
Subd. 7. Exceptions. The following are exempt from the general licensing requirements prescribed by this section:
(1) agents of township mutuals who are exempted pursuant to section 60K.04;
(2) fraternal benefit society representatives exempted pursuant to section 60K.05;
(3) any regular salaried officer or employee of a licensed insurer, without license or other qualification, may act on behalf of that licensed insurer in the negotiation of insurance for that insurer, provided that a licensed agent must participate in the sale of the insurance;
(4) employers and their officers or employees, and the trustees or employees of any trust plan, to the extent that the employers, officers, employees, or trustees are engaged in the administration or operation of any program of employee benefits for the employees of the employers or employees of their subsidiaries or affiliates involving the use of insurance issued by a licensed insurance company; provided that the activities of the officers, employees and trustees are incidental to clerical or administrative duties and their compensation does not vary with the volume of insurance or applications for insurance;
(5) employees of a creditor who enroll debtors for credit life, credit accident and health, or credit involuntary unemployment insurance; provided the employees receive no commission or fee for it;
(6) clerical or administrative employees of an insurance agent who take insurance applications or receive premiums in the office of their employer, if the activities are incidental to clerical or administrative duties and the employee's compensation does not vary with the volume of the applications or premiums;
(7) rental vehicle companies and their employees in connection with the offer of insurance authorized under section 72A.125;
(8) employees of a retailer who enroll purchasers for credit insurance associated with a retail purchase; provided the employees receive no commission, fee, bonus, or other form of compensation for it; and
(9) representatives of prepaid legal service plans in connection with the sale and marketing of these plans.
HIST: 1992 c 564 art 3 s 5; 1993 c 343 s 6; 1994 c 632 art 4 s 27-29; 1995 c 258 s 13; 1996 c 446 art 1 s 8; 1999 c 177 s 30,31; 1999 c 236 s 1; 2000 c 483 s 6
* NOTE: This section is repealed by Laws 2001, chapter 117, article *1, section 28, effective July 1, 2002. Laws 2001, chapter 117, article *1, section 29.
60K.04 Township mutual agents.
No agent for a township mutual shall be required to take an examination to become eligible for an agent's license in farm property perils and farm liability if it is certified by one or more township mutual companies that the agent has been acting in the capacity of an agent at least since January 1, 1971, and no new examination shall be required for eligibility for a license in farm property perils and farm liability for a licensed agent in farm windstorm and hail insurance who was licensed prior to January 1, 1971.
HIST: 1992 c 564 art 3 s 6
* NOTE: This section is repealed by Laws 2001, chapter 117, article *1, section 28, effective July 1, 2002. Laws 2001, chapter 117, article *1, section 29.
60K.05 Fraternal benefit society representatives.
Representatives of fraternal benefit societies who solicit and negotiate insurance contracts shall be deemed to be insurance agents and subject to the licensing requirements as set forth in section 60K.03, subdivision 1; provided, that no insurance agent's license shall be required of:
(1) any officer, employee, or secretary of a fraternal benefit society or of any subordinate lodge or branch who devotes substantially all of that person's time to activities other than the solicitation or negotiation of insurance contracts and who receives no commission or other compensation directly dependent upon the number or amount of contracts solicited or negotiated; or
(2) any agent or representative of a fraternal benefit society who devotes, or intends to devote, less than 50 percent of that person's time to the solicitation and procurement of insurance contracts for that society. Any person who in the preceding calendar year has solicited and procured life insurance in excess of $50,000 face amount, or, in the case of any other kinds of insurance which the society may write, on the persons of more than 25 individuals, and who has received or will receive a commission or other compensation in the total amount of $1,000 or more, shall be presumed to be devoting, or intending to devote, 50 percent of that person's time to the solicitation or procurement of insurance contracts for that society.
HIST: 1992 c 564 art 3 s 7
* NOTE: This section is repealed by Laws 2001, chapter 117, article *1, section 28, effective July 1, 2002. Laws 2001, chapter 117, article *1, section 29.
60K.06 Fees.
Subdivision 1. Renewal fees. (a) Each agent licensed pursuant to section 60K.03 shall pay in accordance with the procedure adopted by the commissioner a renewal fee as prescribed by subdivision 2.
(b) Every agent, corporation, limited liability company, and partnership renewal license is valid for a period of 24 months. The commissioner may stagger the implementation of the 24-month licensing program so that approximately one-half of the licenses will expire on October 31 of each even-numbered year and the other half on October 31 of each odd-numbered year. Those licensees who will receive a 12-month license on November 1, 1994, because of the staggered implementation schedule, will pay for the license a fee reduced by an amount equal to one-half the fee for renewal of the license.
(c) Persons whose applications have been properly and timely filed who have not received notice of denial of renewal are approved for renewal and may continue to transact business whether or not the renewed license has been received on or before November 1. Applications for renewal of a license are timely filed if received by the commissioner on or before October 15 of the year due, on forms duly executed and accompanied by appropriate fees. An application mailed is considered timely filed if addressed to the commissioner, with proper postage, and postmarked by October 15.
Subd. 2. Licensing fees. (a) In addition to the fees and charges provided for examinations, each agent licensed pursuant to section 60K.03 shall pay to the commissioner:
(1) a fee of $80 per license for an initial license issued to an individual agent, and a fee of $80 for each renewal;
(2) a fee of $200 for an initial license issued to a partnership, limited liability company, or corporation, and a fee of $150 for each renewal;
(3) a fee of $75 for an initial amendment (variable annuity) to a license, and a fee of $50 for each renewal; and
(4) a fee of $500 for an initial surplus lines agent's license, and a fee of $500 for each renewal.
(b) Persons whose applications have been properly and timely filed who have not received notice of denial of renewal are approved for renewal and may continue to transact business whether or not the renewed license has been received on or before November 1 of the renewal year. Applications for renewal of a license are timely filed if received by the commissioner on or before the 15th day preceding the license renewal date of the applicant on forms duly executed and accompanied by appropriate fees. An application mailed is considered timely filed if addressed to the commissioner, with proper postage, and postmarked on or before the 15th day preceding the licensing renewal date of the applicant.
(c) Initial licenses issued under this section must be valid for a period not to exceed two years. The commissioner shall assign an expiration date to each initial license so that approximately one-half of all licenses expire each year. Each initial license must expire on October 31 of the expiration year assigned by the commissioner.
(d) All fees shall be retained by the commissioner and are nonreturnable, except that an overpayment of any fee must be refunded upon proper application.
Subd. 3. Initial license expiration; fee reduction. If an initial license issued under subdivision 2, paragraph (a), expires less than 12 months after issuance, the license fee must be reduced by an amount equal to one-half the fee for a renewal of the license.
HIST: 1992 c 564 art 3 s 8; 1994 c 632 art 4 s 30; 1997 c 200 art 1 s 43; 1999 c 223 art 2 s 7
* NOTE: This section is repealed by Laws 2001, chapter 117, article *1, section 28, effective July 1, 2002. Laws 2001, chapter 117, article *1, section 29.
60K.07 Temporary licenses.
Subdivision 1. Repealed, 1997 c 222 s 60
Subd. 2. Permissive temporary license. The commissioner may issue a temporary license to a person to act as an insurance agent for a period not to exceed 90 days, which may be extended as determined by the commissioner, without requiring an examination if the commissioner considers a temporary license necessary for the servicing of an insurance business in the following cases:
(1) to an agent licensed as a resident agent in another state where the commissioner determines that the foreign license is substantially the equivalent of that being applied for from the state of Minnesota and where the agent has been transferred into this state with the intention of becoming a resident, working as an insurance agent, and obtaining a resident license from the state of Minnesota;
(2) to the surviving spouse or next of kin, or to the administrator or executor, or to an employee of a deceased licensed insurance agent, or to the spouse, next of kin, an employee, or legal guardian of a disabled licensed insurance agent;
(3) to the designee of a licensed insurance agent entering upon active service in the armed forces of the United States; or
(4) in any other circumstance where the commissioner considers that the public interest will best be served by the issuance of a temporary license.
HIST: 1992 c 564 art 3 s 9
* NOTE: This section is repealed by Laws 2001, chapter 117, article *1, section 28, effective July 1, 2002. Laws 2001, chapter 117, article *1, section 29.
60K.08 Repealed, 1999 c 177 s 88
60K.081 Brokerage business.
Every insurance agent licensed to transact business in this state may procure the insurance of risks, or parts of risks, in the class or classes of insurance for which the agent is licensed, from an insurer authorized to transact business in this state, when the agent is not an appointed agent of the insurer, but the insurance must be consummated only through an appointed agent of the insurer.
HIST: 2000 c 483 s 7
* NOTE: This section is repealed by Laws 2001, chapter 117, article *1, section 28, effective July 1, 2002. Laws 2001, chapter 117, article *1, section 29.
60K.09 Unfit person not to be employed by insurer.
No insurer, its officers, agents, or managers shall knowingly make application to the commissioner for appointment of a person as its agent where that person is known to the insurer, its officers, agents, or managers making the application, to be unfit or disqualified to be licensed as an insurance agent, and immediately upon the discovery by the insurer, its officers, agents, or managers having supervision of the agent, of the unfitness or disqualification, the insurer, or the officers agents, or managers shall forthwith inform the commissioner in writing of their decision to terminate their appointment of this agent; nor shall any insurer retain in its employ any agent known by it to be disqualified or unfit to be licensed as an insurance agent.
HIST: 1992 c 564 art 3 s 11
* NOTE: This section is repealed by Laws 2001, chapter 117, article *1, section 28, effective July 1, 2002. Laws 2001, chapter 117, article *1, section 29.
60K.10 Term of appointments.
All appointments of agents by insurers pursuant to this section shall remain in force until terminated voluntarily by the appointing insurer or the license of the agent has for any reason been terminated during the appointment. The original appointing insurer, as well as any subsequent appointing insurer, may terminate the appointment of an agent at any time by giving written notice thereof to the commissioner and by sending a copy thereof to the last known address of the agent. The effective date of the termination shall be the date of receipt of the notice by the commissioner unless another date is specified by the insurer in the notice. Within 30 days after the insurer gives notice of termination to the commissioner, the insurer shall furnish the agent with a current statement of the agent's commission account.
Accompanying the notice of a termination given to the commissioner by the insurer shall be a statement of the specific reasons constituting the cause of termination. Any document, record, or statement relating to the agent which is disclosed or furnished to the commissioner contemporaneously with, or subsequent to, the notice of termination shall be deemed confidential by the commissioner and a privileged communication. The document, record, or statement furnished to the commissioner shall not be admissible in whole or in part for any purpose in any action or proceeding against (1) the insurer or any of its officers, employees, or representatives submitting or providing the document, record, or statement, or (2) any person, firm, or corporation furnishing in good faith to the insurer the information upon which the reasons for termination are based.
HIST: 1992 c 564 art 3 s 12
* NOTE: This section is repealed by Laws 2001, chapter 117, article *1, section 28, effective July 1, 2002. Laws 2001, chapter 117, article *1, section 29.
60K.11 Denial, revocation, suspension, and censure of licenses.
Subdivision 1. Grounds. The commissioner may by order take any or all of the following actions:
(1) deny, suspend, or revoke an insurance agent or agency license;
(2) censure the licensee; or
(3) impose a civil penalty as provided for in section 45.027, subdivision 6.
In order to take this action the commissioner must find that the order is in the public interest and that the applicant; licensee; or in the case of an insurance agency, partner, director, shareholder, officer, or agent of that insurance agency:
(i) does not intend to or is not in good faith carrying on the business of an insurance agent;
(ii) has filed an application for a license which is incomplete in any material respect or contains any statement which, in light of the circumstances under which it is made, contains any misrepresentation, or is false, misleading, or fraudulent;
(iii) has engaged in an act or practice, whether or not such act or practice involves the business of insurance, which demonstrates that the applicant or licensee is untrustworthy, financially irresponsible, or otherwise incompetent or unqualified to act as an insurance agent or agency;
(iv) has pled guilty, with or without explicitly admitting guilt, pled nolo contendere, or been convicted of a felony, gross misdemeanor, or misdemeanor involving moral turpitude, including, but not limited to, assault or similar conduct;
(v) has violated or failed to comply with any of the provisions of the insurance laws including chapter 45 or chapters 60A to 72A or any rule or order under those chapters;
(vi) is permanently or temporarily enjoined by any court of competent jurisdiction from engaging in or continuing any conduct or practice involving any aspect of the insurance business;
(vii) has violated or failed to comply with any order of the insurance regulator of any other state or jurisdiction;
(viii) has had an insurance agent or agency license denied, suspended, or revoked, has been censured or reprimanded, has been the subject of any other discipline imposed by, or has paid or has been required to pay a monetary penalty or fine to, another state or jurisdiction;
(ix) has misrepresented the terms of any actual or proposed insurance contract;
(x) has engaged in any fraudulent, coercive, deceptive, or dishonest act or practice whether or not such act or practice involves the business of insurance;
(xi) has improperly withheld, misappropriated, or converted to the licensee's or applicant's own use any money belonging to a policyholder, insurer, beneficiary, or other person;
(xii) has forged another's name to any document whether or not the document relates to an application for insurance or a policy of insurance; or
(xiii) has, while performing residential mortgage activity regulated under chapter 58, violated any notification, disclosure, or recordkeeping requirement, or any standard of conduct, imposed by chapter 58.
Subd. 2. Licensees. If the commissioner determines that one of the conditions listed in subdivision 1 exists, the commissioner may issue an order requiring a licensee to show cause why any or all of the following should not occur: (1) the license revocation or suspension; (2) censuring of the licensee; or (3) the imposition of a civil penalty. The order shall be calculated to give reasonable notice of the time and place for hearing on the matter, and shall state the reasons for the entry of the order. The commissioner may by order summarily suspend a license pending final determination of any order to show cause. If a license is suspended pending final determination of an order to show cause, a hearing on the merits shall be held within 30 days of the issuance of the order of suspension. All hearings shall be conducted in accordance with the provisions of chapter 14. After the hearing, the commissioner shall enter an order disposing of the matter as the facts require. If the licensee fails to appear at a hearing after having been duly notified of it, the licensee shall be considered in default, and the proceeding may be determined against the licensee upon consideration of the order to show cause, the allegations of which may be considered to be true.
Subd. 3. Applicants. Whenever it appears to the commissioner that a license application should be denied pursuant to subdivision 1, the commissioner shall promptly give a written notice to the applicant of the denial. The notice must state the grounds for the denial and give reasonable notice of the rights of the applicant to request a hearing. A hearing must be held not later than 30 days after the request for the hearing is received by the commissioner unless the applicant and the department of commerce agree that the hearing may be held at a later date. If no hearing is requested within 30 days of service of the notice, the denial will become final. All hearings shall be conducted in accordance with the provisions of chapter 14. After the hearing, the commissioner shall enter an order making such disposition as the facts require. If the applicant fails to appear at a hearing after having been duly notified of it, the person shall be considered in default, and the proceeding may be determined against the applicant upon consideration of the notice denying application, the allegations of which may be considered to be true. All fees accompanying the application and appointment are considered earned and are not refundable.
Subd. 4. Actions against lapsed license. If a license lapses, is surrendered, withdrawn, terminated, or otherwise becomes ineffective, the commissioner may institute a proceeding under this subdivision within two years after the license was last effective and enter a revocation or suspension order as of the last date on which the license was in effect, or impose a civil penalty as provided for in section 45.027, subdivision 6.
Subd. 5. Notification of action taken by other state. An insurance agent shall notify the commissioner within 30 days of any fine imposed on that agent by another state or of a suspension or revocation of license by the commissioner of commerce of this state or the commissioner of insurance of any other state.
Subd. 6. Conditions for relicensure. A revocation of a license shall prohibit the licensee from making a new application for a license for at least two years from the effective date of the revocation. Further, the commissioner shall, as a condition of reapplication, require the applicant to obtain a performance bond issued by an insurer authorized to transact business in this state in the amount of $20,000 or a greater amount the commissioner considers appropriate for the protection of citizens of this state in the event the commissioner grants the application. The bond shall be filed with the commissioner, with the state of Minnesota as obligee, conditioned for the prompt payment to any aggrieved person entitled to payment of any amounts received by the licensee or to protect any aggrieved person from loss resulting from fraudulent, deceptive, dishonest, or other prohibited practices arising out of any transaction when the licensee was licensed or performed acts for which a license is required under this chapter. The bond shall remain operative for as long as that licensee is licensed. The bond required by this subdivision must provide coverage for all matters arising during the period of licensure.
HIST: 1992 c 564 art 3 s 13; 1999 c 151 s 38
* NOTE: This section is repealed by Laws 2001, chapter 117, article *1, section 28, effective July 1, 2002. Laws 2001, chapter 117, article *1, section 29.
60K.12 Tax clearance certificate.
Subdivision 1. Requirement for issuance or renewal of license. In addition to the provisions of section 60K.11, the commissioner may not issue or renew a license if the commissioner of revenue notifies the commissioner and the licensee or applicant for a license that the licensee or applicant owes the state delinquent taxes in the amount of $500 or more. The commissioner may issue or renew the license only if: (1) the commissioner of revenue issues a tax clearance certificate; and (2) the commissioner of revenue or the licensee or applicant forwards a copy of the clearance certificate to the commissioner. The commissioner of revenue may issue a clearance certificate only if the licensee or applicant does not owe the state any uncontested delinquent taxes.
Subd. 2. Definitions. For purposes of this section, the following terms have the meanings given them:
(1) "taxes" are all taxes payable to the commissioner of revenue, including penalties and interest due on those taxes; and
(2) "delinquent taxes" do not include a tax liability if (i) an administrative or court action that contests the amount or validity of the liability has been filed or served, (ii) the appeal period to contest the tax liability has not expired, or (iii) the licensee or applicant has entered into a payment agreement to pay the liability and is current with the payments.
Subd. 3. Contested case hearing. In lieu of the notice and hearing requirements of section 60K.11, when a licensee or applicant is required to obtain a clearance certificate under this section, a contested case hearing must be held if the licensee or applicant requests a hearing in writing to the commissioner of revenue within 30 days of the date of the notice provided in subdivision 1. The hearing must be held within 45 days of the date the commissioner of revenue refers the case to the office of administrative hearings. Notwithstanding any law to the contrary, the licensee or applicant must be served with 20 days' notice in writing specifying the time and place of the hearing and the allegations against the licensee or applicant. The notice may be served personally or by mail.
Subd. 4. Identification required. The commissioner shall require all licensees or applicants to provide their social security number and Minnesota business identification number on all license applications. Upon request of the commissioner of revenue, the commissioner must provide to the commissioner of revenue a list of all licensees and applicants, including the name and address, social security number, and business identification number. The commissioner of revenue may request a list of the licensees and applicants no more than once each calendar year.
HIST: 1992 c 564 art 3 s 14
* NOTE: This section is repealed by Laws 2001, chapter 117, article *1, section 28, effective July 1, 2002. Laws 2001, chapter 117, article *1, section 29.
60K.13 Surrender, loss, or destruction of license.
Subdivision 1. Notification. The commissioner shall promptly notify the licensee and all appointing insurers, where applicable, of any suspension, revocation, or termination of the licensee's agent's license by the commissioner. Upon receipt of the notice of suspension or revocation of a license, the licensee shall immediately deliver it to the commissioner.
Subd. 2. Return of license. An agent whose resident or nonresident license is terminated, as provided in section 60K.11, shall deliver the terminated license to the commissioner by personal delivery or by mail within 30 days after the date of termination.
Subd. 3. Duplicate license. The commissioner may issue a duplicate license for any lost, stolen, or destroyed license issued pursuant to this section upon an affidavit of the licensee concerning the facts of the loss, theft, or destruction, and the payment of a fee of $3 by money order or cashier's check payable to the state treasurer.
HIST: 1992 c 564 art 3 s 15
* NOTE: This section is repealed by Laws 2001, chapter 117, article *1, section 28, effective July 1, 2002. Laws 2001, chapter 117, article *1, section 29.
60K.14 Prohibited acts; required acts.
Subdivision 1. Personal solicitation of insurance sales. (a) Definitions. For the purposes of this section, the following terms have the meanings given them:
(1) "agent" means a person, copartnership, or corporation required to be licensed pursuant to section 60K.02; and
(2) "personal solicitation" means any contact by an agent, or any person acting on behalf of an agent, made for the purpose of selling or attempting to sell insurance, when either the agent or a person acting for the agent contacts the buyer by telephone or in person, except: (i) an attempted sale in which the buyer personally knows the identity of the agent, the name of the general agency, if any, which the agent represents, and the fact that the agent is an insurance agent; (ii) an attempted sale in which the prospective purchaser of insurance initiated the contact; or (iii) a personal contact which takes place at the agent's place of business.
(b) Disclosure requirement. Before a personal solicitation, the agent or person acting for an agent shall, at the time of initial personal contact with the potential buyer, clearly and expressly disclose in writing:
(1) the name of the person making the contact;
(2) the name of the agent, general agency, or insurer that person represents; and
(3) the fact that the agent, agency, or insurer is in the business of selling insurance.
If the initial personal contact is made by telephone, the disclosures required by this subdivision need not be made in writing.
(c) False representation of government affiliation. No agent or person acting for an agent shall make any communication to a potential buyer that indicates or gives the impression that the agent is acting on behalf of a government agency.
Subd. 2. Fees for services. No person shall charge a fee for any services rendered in connection with the solicitation, negotiation, or servicing of any insurance contract unless:
(1) before rendering the services, a written statement is provided disclosing:
(i) the services for which fees are charged;
(ii) the amount of the fees;
(iii) that the fees are charged in addition to premiums; and
(iv) that premiums include a commission; and
(2) all fees charged are reasonable in relation to the services rendered.
Subd. 3. Commissions or compensation. No commission or other compensation shall be paid or allowed by any person, firm, or corporation to any other person, firm, or corporation acting, or assuming to act, as an insurance agent without a license therefor. A duly licensed agent may pay commissions or assign or direct that commissions be paid to a partnership of which the agent is a member, employee, or agent, or to a corporation of which the agent is an officer, employee, or agent. This subdivision does not prevent the payment or receipt of renewal or other deferred commissions to or by any person solely because the person has ceased to hold a license to act as an insurance agent.
Subd. 4. Suitability of insurance. In recommending the purchase of any life, endowment, individual accident and sickness, long-term care, annuity, life-endowment, or Medicare supplement insurance to a customer, an agent must have reasonable grounds for believing that the recommendation is suitable for the customer and must make reasonable inquiries to determine suitability. The suitability of a recommended purchase of insurance will be determined by reference to the totality of the particular customer's circumstances, including, but not limited to, the customer's income, the customer's need for insurance, and the values, benefits, and costs of the customer's existing insurance program, if any, when compared to the values, benefits, and costs of the recommended policy or policies.
Subd. 5. Premiums. All premiums or other money received by an agent from an insured or applicant for insurance must be forthwith deposited directly in a business checking, savings, or other similar account maintained by the agent or agency, unless the money is forwarded directly to the designated insurer.
Subd. 6. Privacy of client. Except as otherwise provided by law, no insurance agent may disclose nor cause to be disclosed to any other person the identity of a person insured through the agent without the consent of the insured.
Subd. 7. Disclosure of commissions. Before selling any health plan as defined in section 62A.011, subdivision 3, an agent shall disclose in writing to the prospective purchaser the amount of any commission or other compensation the agent will receive as a direct result of the sale. The disclosure may be expressed in dollars or as a percentage of the premium. The amount disclosed need not include any anticipated renewal commissions.
HIST: 1992 c 564 art 3 s 16; 1993 c 345 art 5 s 3; 1994 c 485 s 15; 1994 c 625 art 10 s 2; 1995 c 258 s 14; 2000 c 483 s 8
* NOTE: This section is repealed by Laws 2001, chapter 117, article *1, section 28, effective July 1, 2002. Laws 2001, chapter 117, article *1, section 29.
60K.15 Insurer's agent.
Any person who solicits insurance is the agent of the insurer and not the agent of the insured.
HIST: 1992 c 564 art 3 s 17
* NOTE: This section is repealed by Laws 2001, chapter 117, article *1, section 28, effective July 1, 2002. Laws 2001, chapter 117, article *1, section 29.
60K.16 Liability for placing insurance in unauthorized company.
Any person, regardless of whether that person is required to be licensed as an insurance agent, who participates in any manner in the sale of any insurance policy or certificate, or any other contract providing benefits, for or on behalf of any company which is required to be, but which is not authorized to engage in the business of insurance in this state, other than pursuant to sections 60A.195 to 60A.209, shall be personally liable for all premiums, whether earned or unearned, paid by the insured, and the premiums may be recovered by the insured. In addition, that person shall be personally liable for any loss the insured has sustained or may sustain if the loss is one resulting from a risk or hazard covered in the issued policy, certificate, or contract or which would have been covered if the policy, certificate, or contract had been issued to the purchaser of the insurance.
HIST: 1992 c 564 art 3 s 18
* NOTE: This section is repealed by Laws 2001, chapter 117, article *1, section 28, effective July 1, 2002. Laws 2001, chapter 117, article *1, section 29.
60K.17 Agents; variable contracts.
Subdivision 1. License required. No person shall sell or offer for sale a contract on a variable basis unless prior to making any solicitation or sale the person has obtained from the commissioner a license therefor. The license shall only be granted, upon the written requisition of an insurer, to a qualified person who holds a current license authorizing the person to solicit and sell life insurance and annuity contracts in this state. To become qualified, a person shall complete a written application on a form prescribed by the commissioner and shall take and pass an examination prescribed by the commissioner.
Subd. 2. Exceptions. (a) Any regularly salaried officer or employee of a licensed insurer may, without license or other qualification, act on behalf of that licensed insurer in the negotiation of a contract on a variable basis, provided that a licensed agent must participate in the sale of any contract.
(b) Any person who holds a valid license to solicit and sell life insurance and annuity contracts may solicit and sell contracts on a variable basis without acquiring a license under this subdivision if the contract is based on an account which is excluded from the definition of investment company under the Investment Company Act of 1940, United States Code, title 15, section 80a-3(11).
Subd. 3. Rules. The commissioner may by rule waive or modify any of the requirements in this section or prescribe additional requirements considered necessary for the proper sale and solicitation of contracts on a variable basis.
HIST: 1992 c 564 art 3 s 19
* NOTE: This section is repealed by Laws 2001, chapter 117, article *1, section 28, effective July 1, 2002. Laws 2001, chapter 117, article *1, section 29.
60K.18 Altering existing policies; written binders required.
An insurance agent having express authority to bind coverage, who orally agrees on behalf of an insurer to provide insurance coverage, or to alter an existing insurance agreement, shall execute and deliver a written memorandum or binder containing the terms of the oral agreement to the insured within three business days from the time the oral agreement is entered.
HIST: 1992 c 564 art 3 s 20
* NOTE: This section is repealed by Laws 2001, chapter 117, article *1, section 28, effective July 1, 2002. Laws 2001, chapter 117, article *1, section 29.
60K.19 Continuing insurance education.
Subdivision 1. Definition. For the purposes of this section, "course" means a course, program of instruction, or seminar of continuing insurance education. A "professional designation examination" means a written, proctored, and graded examination the passage of which leads to a bona fide insurance or financial planning professional designation used by agents.
Subd. 2. Applicability. This section applies to all natural persons licensed by this state to sell classes of insurance for which licensing examinations are required.
Subd. 3. Exemptions. This section does not apply to:
(a) persons soliciting or selling solely on behalf of companies organized and operating according to chapter 67A; or
(b) persons holding life and health, or property and casualty licenses who, at the time of license renewal, certify to the commissioner in writing that they will sell only credit life, credit accident and health, credit involuntary unemployment, and credit property insurance, during that year and do in fact so limit their sale of insurance.
Subd. 4. Repealed, 2001 c 161 s 58
Subd. 5. Powers of the advisory task force. (a) Applications for approval of individuals responsible for monitoring course offerings must be submitted to the commissioner on forms prescribed by the commissioner and must be accompanied by a fee of not more than $100 payable to the state of Minnesota for deposit in the general fund. A fee of $10 for each hour or fraction of one hour of course approval sought must be forwarded with the application for course approval. If the advisory task force is created, it shall make recommendations to the commissioner regarding the accreditation of courses sponsored by institutions, both public and private, which satisfy the criteria established by this section, the number of credit hours to be assigned to the courses, and rules which may be promulgated by the commissioner. The advisory task force shall seek out and encourage the presentation of courses.
(b) If the advisory task force is created, it shall make recommendations and provide subsequent evaluations to the commissioner regarding procedures for reporting compliance with the minimum education requirement.
(c) The advisory task force shall recommend the approval or disapproval of professional designation examinations that meet the criteria established by this section and the number of continuing education credit hours to be awarded for passage of the examination. In order to be approved, a professional designation examination must:
(1) lead to a recognized insurance or financial planning professional designation used by agents; and
(2) conclude with a written examination that is proctored and graded.
Subd. 6. Powers of the commissioner. (a) The commissioner shall make the final determination as to accreditation and assignment of credit hours for courses.
(b) The commissioner shall adopt procedures for reporting compliance with the minimum education requirement.
(c) The commissioner shall promulgate rules according to chapter 14 to carry out the purposes of this section.
Subd. 7. Criteria for course accreditation. (a) The commissioner may accredit a course only to the extent it is designed to impart substantive and procedural knowledge of the insurance field. The burden of demonstrating that the course satisfies this requirement is on the individual or organization seeking accreditation. The commissioner shall approve any educational program approved by Minnesota Continuing Legal Education relating to the insurance field. The commissioner is authorized to establish a procedure for renewal of course accreditation.
(b) The commissioner shall approve or disapprove professional designation examinations that are recommended for approval by the advisory task force. In order for an agent to receive full continuing education credit for a professional designation examination, the agent must pass the examination. An agent may not receive credit for classroom instruction preparing for the professional designation examination and also receive continuing education credit for passing the professional designation examination.
(c) The commissioner may not accredit a course:
(1) that is designed to prepare students for a license examination;
(2) in mechanical office or business skills, including typing, speedreading, use of calculators, or other machines or equipment;
(3) in sales promotion, including meetings held in conjunction with the general business of the licensed agent; or
(4) in motivation, the art of selling, psychology, or time management.
Subd. 8. Minimum education requirement. Each person subject to this section shall complete a minimum of 30 credit hours of courses accredited by the commissioner during each 24-month licensing period. Any person whose initial licensing period extends more than six months shall complete 15 hours of courses accredited by the commissioner during the initial license period. Any person teaching or lecturing at an accredited course qualifies for three times the number of credit hours that would be granted to a person completing the accredited course. No more than one-half of the credit hours per licensing period required under this section may be credited to a person for attending any combination of courses either: (1) sponsored by, offered by, or affiliated with an insurance company or its agents; or (2) offered using new delivery technology, including computer, interactive technology, and the Internet. Courses sponsored by, offered by, or affiliated with an insurance company or agent may restrict its students to agents of the company or agency.
Subd. 9. Waiver of requirements. (a) The commissioner may grant a waiver or an extension of time up to 90 days to complete the minimum education requirement to an individual upon a showing of good cause. It is the licensed person's responsibility to request a waiver or extension on a form prescribed by the commissioner. As of the day the licensed person properly files a request for a waiver or extension, the license remains in effect until the commissioner notifies the licensed person of the commissioner's decision. The commissioner may approve a waiver or extension subject to any reasonable conditions. The person's license remains in effect during the compliance period determined by the commissioner. If the licensed person fails to comply with any reasonable conditions imposed by the commissioner, the commissioner shall terminate the license. If the request for a waiver or extension is denied by the commissioner, the licensed person shall have 30 days within which to satisfy the minimum education requirement involved in the request for a waiver or extension. If the minimum education requirement is not satisfied within the compliance period, the commissioner shall terminate the person's license.
(b) Upon application on a form prescribed by the commissioner, the commissioner may grant a waiver of the minimum education requirement to a licensee who is no longer actively engaged in the solicitation and sale of insurance. A licensed person seeking a waiver from the requirements of this section may be required to submit information to the commissioner that substantiates the person's retirement or inactive status. A licensed person receiving a waiver from the commissioner may maintain and renew a license but may not solicit or sell new insurance business while this waiver is in effect. A licensee may, for a fee, continue to service an insurance policy for which the licensee is the agent of record, if the policy is in force at the time the waiver is granted. An insurer may not terminate a service contract or refuse to pay compensation because the waiver does not allow the licensee to solicit or sell new insurance.
For the purposes of receiving renewal commissions and other benefits or compensation from insurers, an agent receiving a waiver under this paragraph is considered to be the holder of a valid insurance agent license in this state.
Subd. 10. Reporting. (a) After completing the minimum education requirement, each person subject to this section shall file or cause to be filed a compliance report in accordance with the procedures adopted by the commissioner. The compliance report must not claim credit for continuing education not actually completed at the date of filing the report.
(b) An institution offering an accredited course shall comply with the procedure for reporting compliance adopted by the commissioner.
(c) If a person subject to this section completes a nonaccredited course, that person may submit a written report to the advisory committee accompanied by a fee of not more than $10 payable to the state of Minnesota for deposit in the general fund. This report must be accompanied by proof satisfactory to the commissioner that the person has completed the minimum education requirement for the annual period during which the nonaccredited course was completed. Upon the recommendation of the advisory committee that the course satisfies the criteria for course accreditation, the commissioner may approve the nonaccredited course and shall so inform the person. If the nonaccredited course is approved by the commissioner, it may be used to satisfy the minimum education requirement for the person's next annual compliance period.
Subd. 11. Enforcement. If a person subject to this section fails to complete the minimum education or reporting requirement or to pay the prescribed fees for any annual period, no license may be renewed or continued in force for that person for any class of insurance beginning June 1 of the year due and that person may not act as an insurance agent until the person has demonstrated to the satisfaction of the commissioner that all requirements of this section have been complied with or that a waiver or extension has been obtained.
HIST: 1983 c 289 s 114 subd 1; 1983 c 328 s 6; 1984 c 552 s 3; 1984 c 578 s 2; 1984 c 592 s 34-36; 1984 c 655 art 1 s 92; 1Sp1985 c 10 s 53,54; 1986 c 444; 1987 c 337 s 8-10; 1989 c 231 s 1-5; 1992 c 513 art 3 s 25; 1992 c 564 art 1 s 19,20; 1993 c 343 s 7; 1994 c 632 art 4 s 31; 1996 c 439 art 1 s 7-9; 1997 c 187 art 3 s 14; 1999 c 177 s 32,33; 2000 c 483 s 9; 2001 c 141 s 1; 2001 c 208 s 5
* NOTE: This section is repealed by Laws 2001, chapter 117, *article 1, section 28, effective July 1, 2002. Laws 2001, *chapter 117, article 1, section 29.
* NOTE: This section is repealed by Laws 2001, chapter 117, article *1, section 28, effective July 1, 2002. Laws 2001, chapter 117, article *1, section 29.
60K.20 Social security numbers of licensed agents; commissioner's authority to provide to NAIC.
The commissioner may provide the social security numbers of licensed insurance agents to the National Association of Insurance Commissioners.
HIST: 1997 c 222 s 7
* NOTE: This section is repealed by Laws 2001, chapter 117, article *1, section 28, effective July 1, 2002. Laws 2001, chapter 117, article *1, section 29.
60K.30 Purpose and scope.
(a) Sections 60K.30 to 60K.56 govern the qualifications and procedures for the licensing of insurance producers.
(b) Except as to the underlying requirement that a surplus lines agent or broker obtain an insurance producer license, this chapter does not apply to surplus lines agents or brokers licensed under sections 60A.195 to 60A.209, except as provided in sections 60K.39 and 60K.53, subdivision 2.
HIST: 2001 c 117 art 1 s 1
* NOTE: This section, as added by Laws 2001, chapter 117, *article 1, section 1, is effective July 1, 2002. Laws 2001, *chapter 117, article 1, section 29.
60K.31 Definitions.
Subdivision 1. Scope. For purposes of sections 60K.31 to 60K.57, the terms in subdivisions 2 to 18 have the meanings given them. The definitions in section 60A.02 are applicable to terms not defined in this section, unless the language or context clearly indicates that a different meaning is intended.
Subd. 2. Business entity. "Business entity" means a corporation, association, partnership, limited liability company, limited liability partnership, or other legal entity.
Subd. 3. Commissioner. "Commissioner" means the commissioner of commerce.
Subd. 4. Home state. "Home state" means the District of Columbia and any state or territory of the United States in which an insurance producer maintains the producer's principal place of residence or principal place of business and is licensed to act as an insurance producer.
Subd. 5. Insurance. "Insurance" means any of the lines of authority in section 60A.06.
Subd. 6. Insurance producer. "Insurance producer" means a person required to be licensed under the laws of this state to sell, solicit, or negotiate insurance.
Subd. 7. License. "License" means 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 itself does not create any authority, actual, apparent, or inherent, in the holder to represent or commit an insurance carrier.
Subd. 8. Limited line credit insurance. "Limited line credit insurance" includes credit life, credit disability, credit property, credit unemployment, involuntary unemployment, mortgage life, mortgage guaranty, mortgage disability, guaranteed automobile protection 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.
Subd. 9. Limited line credit insurance producer. "Limited line credit insurance producer" means a person who sells, solicits, or negotiates one or more forms of limited line credit insurance coverage to individuals through a master, corporate, group, or individual policy.
Subd. 10. Limited lines insurance. "Limited lines insurance" means those lines of insurance defined in section 60K.38, subdivision 1, paragraph (c), or any other line of insurance that the commissioner considers necessary to recognize for the purposes of complying with section 60K.39, subdivision 5.
Subd. 11. Limited lines producer. "Limited lines producer" means a person authorized by the commissioner to sell, solicit, or negotiate limited lines insurance.
Subd. 12. Negotiate. "Negotiate" means the act of conferring directly with or offering advice directly to a purchaser or prospective purchaser of a particular contract of insurance concerning any of the substantive benefits, terms, or conditions of the contract if the person engaged in that act either sells insurance or obtains insurance from insurers for purchasers.
Subd. 13. Person. "Person" means an individual or a business entity.
Subd. 14. Sell. "Sell" means to exchange a contract of insurance by any means, for money or its equivalent, on behalf of an insurance company.
Subd. 15. Solicit. "Solicit" means attempting to sell insurance or asking or urging a person to apply for a particular kind of insurance from a particular company.
Subd. 16. Terminate. "Terminate" means the cancellation of the relationship between an insurance producer and the insurer or the termination of a producer's authority to transact insurance.
Subd. 17. Uniform Business Entity Application. "Uniform Business Entity Application" means the current version of the Uniform Business Entity Application for resident and nonresident business entities of the National Association of Insurance Commissioners.
Subd. 18. Uniform Application. "Uniform Application" means the current version of the Uniform Application for resident and nonresident producer licensing of the National Association of Insurance Commissioners.
HIST: 2001 c 117 art 1 s 2
* NOTE: This section, as added by Laws 2001, chapter 117, *article 1, section 2, is effective July 1, 2002. Laws 2001, *chapter 117, article 1, section 29.
60K.32 License required.
A person shall not sell, solicit, or negotiate insurance in this state for any class or classes of insurance unless the person is licensed for that line of authority under sections 60K.31 to 60K.57. The license itself does not create any authority, actual, apparent, or inherent, in the holder to represent or commit an insurance carrier.
HIST: 2001 c 117 art 1 s 3
* NOTE: This section, as added by Laws 2001, chapter 117, *article 1, section 3, is effective July 1, 2002. Laws 2001, *chapter 117, article 1, section 29.
60K.33 Criminal penalty.
A person who acts or assumes to act as an insurance producer without a license issued under this chapter is guilty of a gross misdemeanor.
HIST: 2001 c 117 art 1 s 4
* NOTE: This section, as added by Laws 2001, chapter 117, *article 1, section 4, is effective July 1, 2002. Laws 2001, *chapter 117, article 1, section 29.
60K.34 Exceptions to licensing.
Subdivision 1. License not required. Nothing in sections 60K.31 to 60K.57 requires an insurer to obtain an insurance producer license. In this section, the term "insurer" does not include an insurer's officers, directors, employees, subsidiaries, or affiliates.
Subd. 2. Specific exceptions. A license as an insurance producer is not required of the following:
(1) a fraternal benefit society representative exempted pursuant to section 60K.35;
(2) an officer, director, or employee of an insurer or of an insurance producer if the officer, director, or employee does not receive any commission on policies written or sold to insure risks residing, located, or to be performed in this state and:
(i) the officer, director, or employee's activities are executive, administrative, managerial, clerical, or a combination of these, and are only indirectly related to the sale, solicitation, or negotiation of insurance;
(ii) the officer, director, or employee's function relates to underwriting, loss control, inspection, or the processing, adjusting, investigating, or settling of a claim on a contract of insurance; or
(iii) the officer, director, or employee is acting in the capacity of a special agent or agency supervisor assisting insurance producers where the person's activities are limited to providing technical advice and assistance to licensed insurance producers and do not include the sale, solicitation, or negotiation of insurance;
(3) a person who secures and furnishes information for the purpose of group life insurance, group property and casualty insurance, group annuities, group or blanket accident and health insurance; or for the purpose of enrolling individuals under plans; issuing certificates under plans or otherwise assisting in administering plans; or performs administrative services related to mass-marketed property and casualty insurance; where no commission is paid to the person for the service;
(4) an employer or association or its officers, directors, employees, or the trustees of an employee trust plan, to the extent that the employers, officers, employees, directors, or trustees are engaged in the administration or operation of a program of employee benefits for the employer's or association's own employees or the employees of its subsidiaries or affiliates, which program involves the use of insurance issued by an insurer, as long as the employers, associations, officers, directors, employees, or trustees are not in any manner compensated, directly or indirectly, by the company issuing the contracts;
(5) employees of insurers or organizations employed by insurers who are engaging in the inspection, rating or classification of risks, or in the supervision of the training of insurance producers and who are not individually engaged in the sale, solicitation, or negotiation of insurance;
(6) a person whose activities in this state are limited to advertising without the intent to solicit insurance in this state through communications in printed publications or other forms of electronic mass media whose distribution is not limited to residents of the state, if the person does not sell, solicit, or negotiate insurance that would insure risks residing, located, or to be performed in this state;
(7) a person who is not a resident of this state who sells, solicits, or negotiates a contract of insurance for commercial property and casualty risks to an insured with risks located in more than one state insured under that contract, if the person is otherwise licensed as an insurance producer to sell, solicit, or negotiate that insurance in the state where the insured maintains its principal place of business and the contract of insurance insures risks located in that state;
(8) a salaried full-time employee who counsels or advises the employee's employer relative to the insurance interests of the employer or of the subsidiaries or business affiliates of the employer if the employee does not sell or solicit insurance or receive a commission; or
(9) rental vehicle companies and their employees in connection with the offer of rental vehicle personal accident insurance under section 72A.125.
HIST: 2001 c 117 art 1 s 5
* NOTE: This section, as added by Laws 2001, chapter 117, *article 1, section 5, is effective July 1, 2002. Laws 2001, *chapter 117, article 1, section 29.
60K.35 Fraternal benefit society representatives.
Representatives of fraternal benefit societies who solicit and negotiate insurance contracts are considered to be insurance producers and are subject to the licensing requirements of this chapter, provided that no insurance producer's license is required of:
(1) any officer, employee, or secretary of a fraternal benefit society or of any subordinate lodge or branch who devotes substantially all of that person's time to activities other than the solicitation or negotiation of insurance contracts and who receives no commission or other compensation directly dependent upon the number or amount of contracts solicited or negotiated; or
(2) any agent or representative of a fraternal benefit society who devotes, or intends to devote, less than 50 percent of that person's time to the solicitation and procurement of insurance contracts for that society. Any person who in the preceding calendar year has solicited and procured life insurance in excess of $50,000 face amount, or, in the case of any other kinds of insurance that the society may write, on the persons of more than 25 individuals, and who has received or will receive a commission or other compensation in the total amount of $1,000 or more, is presumed to be devoting, or intending to devote, 50 percent of that person's time to the solicitation or procurement of insurance contracts for that society.
HIST: 2001 c 117 art 1 s 6
* NOTE: This section, as added by Laws 2001, chapter 117, *article 1, section 6, is effective July 1, 2002. Laws 2001, *chapter 117, article 1, section 29.
60K.36 Examinations.
Subdivision 1. Requirement. A resident individual applying for an insurance producer license shall pass a written examination unless exempt under subdivision 2 or section 60K.40. The examination must test the knowledge of the individual concerning the lines of authority for which the application is made, the duties and responsibilities of an insurance producer, and the insurance laws and rules of this state. Examinations required by this section must be approved by the commissioner.
Subd. 2. Examination not required. A resident individual applying for a limited lines credit insurance, title insurance, travel baggage insurance, or bail bonds license is not required to take a written examination.
Subd. 3. Administration. The commissioner may make arrangements, including contracting with an outside testing service, for administering examinations.
Subd. 4. Course of study. The examination must be given only after the applicant has completed a program of classroom studies in a school, which must not include a school sponsored by, offered by, or affiliated with an insurance company or its producers; except that this limitation does not preclude a bona fide professional association of insurance producers, not acting on behalf of an insurer, from offering courses. The course of study must consist of 30 hours of classroom study devoted to the basic fundamentals of insurance for those seeking a Minnesota license for the first time and 7.5 hours devoted to the line in which the producer seeks to be licensed. The program of studies or study course must have been approved by the commissioner in order to qualify under this subdivision. If the applicant has been previously licensed for the particular line of insurance in the state of Minnesota, the requirement of a program of studies or a study course must be waived. A certification of compliance by the organization offering the course must accompany the applicant's license application. This program of studies in a school or a study course does not apply to limited lines farm property liability applicants or to variable life and variable annuity applicants.
Subd. 5. Failure to appear or pass. An individual who fails to appear for the examination as scheduled or fails to pass the examination shall reapply for an examination and remit all required fees and forms before being rescheduled for another examination.
Subd. 6. Results; validity. Examination results are valid for three years from the date of the examination.
HIST: 2001 c 117 art 1 s 7
* NOTE: This section, as added by Laws 2001, chapter 117, *article 1, section 7, is effective July 1, 2002. Laws 2001, *chapter 117, article 1, section 29.
60K.37 Application for license.
Subdivision 1. Resident insurance producer. A person is a resident of this state if that person resides in this state or the principal place of business of that person is maintained in this state. Application for a license claiming residency in this state constitutes an election of residency in this state. A license issued upon an application claiming residency in this state is void if the licensee, while holding a resident license in this state, obtains a resident license in, or claims to be a resident of, any other state or jurisdiction or if the licensee ceases to be a resident of this state. However, if the applicant is a resident of a community or trade area, the border of which is contiguous with the state line of this state, the applicant may qualify for a resident license in this state and at the same time hold a resident license from the contiguous state.
Subd. 2. Individuals. A person applying for a resident insurance producer license shall make application to the commissioner on the Uniform Application and declare under penalty of refusal, suspension, or revocation of the license that the statements made in the application are true, correct, and complete to the best of the individual's knowledge and belief. Before approving the application, the commissioner shall find that the individual:
(1) is at least 18 years of age;
(2) has not committed any act that is a ground for denial, suspension, or revocation set forth in section 60K.43;
(3) has completed, where required by the commissioner, a prelicensing course of study for the lines of authority for which the person has applied;
(4) has paid the fees set forth in section 60K.55; and
(5) has successfully passed the examinations for the lines of authority for which the person has applied.
Subd. 3. Businesses. (a) A business entity acting as an insurance producer is required to obtain an insurance producer license. Application must be made using the Uniform Business Entity Application. Before approving the application, the commissioner shall find that:
(1) the business entity has paid the fees set forth in section 60K.55; and
(2) the business entity has designated an individual licensed producer responsible for the business entity's compliance with the insurance laws and rules of this state.
(b) A business entity insurance producer license does not grant authority to any individual officer, director, partner, member, or employee to act as an insurance producer.
Subd. 4. Service of process. Application for a license under this chapter constitutes appointment of the commissioner as the person's agent for service of process under section 45.028.
Subd. 5. Additional documentation. The commissioner may require any documents reasonably necessary to verify the information contained in an application.
Subd. 6. Limited line credit insurance instruction. An 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 that may be approved by the commissioner.
Subd. 7. Variable life and variable annuity. A resident individual applying for a variable life and variable annuity license shall demonstrate that the applicant holds a current license as a life insurance producer.
HIST: 2001 c 117 art 1 s 8
* NOTE: This section, as added by Laws 2001, chapter 117, *article 1, section 8, is effective July 1, 2002. Laws 2001, *chapter 117, article 1, section 29.
60K.38 License.
Subdivision 1. Issuance. (a) Unless denied a license under section 60K.43, a person who has met the requirements of sections 60K.36 and 60K.37 must be issued an insurance producer license. An insurance producer may receive qualification for a license in one or more of the lines of authority in paragraphs (b) and (c).
(b) An individual insurance producer may receive qualification for a license in one or more of the following major lines:
(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;
(2) accident and health or sickness 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;
(5) variable life and variable annuity products insurance: coverage provided under variable life insurance contracts and variable annuities; and
(6) personal lines: property and casualty insurance coverage sold to individuals and families for primarily noncommercial purposes.
(c) An individual insurance producer may receive qualification for a license in one or more of the following limited lines:
(1) limited line credit insurance;
(2) farm property and liability insurance;
(3) title insurance;
(4) travel baggage insurance;
(5) bail bonds; and
(6) any other line of insurance permitted under state laws or rules.
Subd. 2. Period of effectiveness. An insurance producer license remains in effect unless revoked or suspended as long as the fee set forth in section 60K.55 is paid, continuing education requirements for resident individual producers are met, and all additional documentation required by the commissioner is provided by the renewal date.
Subd. 3. Lapsed license. An individual insurance producer who allows the license to lapse may, within 12 months from the due date of the renewal fee, reinstate the license without the necessity of passing a written examination. However, a penalty in the amount of twice the unpaid renewal fee must be paid by the individual for any renewal fee received after the due date.
Subd. 4. Waivers. A licensed insurance producer who is unable to comply with license renewal procedures due to military service or some other extenuating circumstance, such as a long-term medical disability, may request a waiver of those procedures. The producer may also request a waiver of any examination requirement or any other fine or sanction imposed for failure to comply with renewal procedures.
Subd. 5. Contents. The license must contain the licensee's name, address, producer license number, and the date of issuance, the lines of authority, the expiration date, and any other information the commissioner considers necessary.
Subd. 6. Name or address changes. Licensees shall inform the commissioner, by any means acceptable to the commissioner, of a change of name or address within ten days of the change.
Subd. 7. Administrative assistance to the commissioner. In order to assist in the performance of the commissioner's duties, the commissioner may contract with nongovernmental entities, including the National Association of Insurance Commissioners (NAIC) or any affiliates or subsidiaries that the NAIC oversees, to perform any ministerial functions, including the collection of fees, related to producer licensing that the commissioner and the nongovernmental entity consider appropriate.
HIST: 2001 c 117 art 1 s 9
* NOTE: This section, as added by Laws 2001, chapter 117, *article 1, section 9, is effective July 1, 2002. Laws 2001, *chapter 117, article 1, section 29.
60K.39 Nonresident licensing.
Subdivision 1. Issuance. Unless denied a license under section 62K.41, a nonresident person shall receive a nonresident producer license if:
(1) the person is currently licensed as a resident and in good standing in the person's home state;
(2) the person has submitted the proper request for licensure and has paid the fees required by section 60K.55;
(3) the person has submitted or transmitted to the commissioner the application for licensure that the person submitted to the person's home state, or in lieu of the same, a completed Uniform Application; and
(4) the person's home state awards nonresident producer licenses to residents of this state on the same basis.
Subd. 2. Verification of licensing status. The commissioner may verify the producer's licensing status through the producer database maintained by the National Association of Insurance Commissioners, its affiliates, or subsidiaries.
Subd. 3. Change of address. A nonresident producer who moves from one state to another state or a resident producer who moves from this state to another state shall file a change of address and provide certification from the new resident state within ten days of the change of legal residence. No fee or license application is required.
Subd. 4. Termination; resident license. A nonresident producer license terminates automatically when the person's resident license is terminated for any reason.
Subd. 5. Surplus lines producers. (a) Notwithstanding any other provision of sections 60K.31 to 60K.57, a person licensed as a surplus lines producer in the person's home state shall receive a nonresident surplus lines producer license under subdivision 1. Except as to subdivision 1, nothing in this section otherwise amends or supersedes any provision of sections 60A.195 to 60A.209.
(b) No surplus lines agent or broker licensed under sections 60A.195 to 60A.209 may do business in this state unless the agent or broker has complied with the requirements set forth in section 60A.198, subdivision 3, paragraphs (b) to (d).
Subd. 6. Limited lines producer. Notwithstanding any other provision of sections 60K.31 to 60K.57, a person licensed as a limited line credit insurance or other type of limited lines producer in the person's home state shall receive a nonresident limited lines producer license, under subdivision 1, granting the same scope of authority as granted under the license issued by the producer's home state. For the purposes of this subdivision, limited line insurance is any authority granted by the home state that restricts the authority of the license to less than the total authority prescribed in the associated major lines pursuant to section 60K.38, subdivision 1, clauses (1) to (6).
HIST: 2001 c 117 art 1 s 10
* NOTE: This section, as added by Laws 2001, chapter 117, *article 1, section 10, is effective July 1, 2002. Laws 2001, *chapter 117, article 1, section 29.
60K.40 Individuals licensed in another state; exemption from examination.
Subdivision 1. Availability. An individual who applies for an insurance producer license in this state who was previously licensed for the same lines of authority in another state is not required to complete any prelicensing education or examination. This exemption is only available if the person is currently licensed in that state or if the application is received within 90 days of the cancellation of the applicant's previous license and if the prior state issues a certification that, at the time of cancellation, the applicant was in good standing in that state or the state's Producer Database records, maintained by the National Association of Insurance Commissioners, its affiliates, or subsidiaries, indicate that the producer is or was licensed in good standing for the line of authority requested.
Subd. 2. Required application. If a person licensed as an insurance producer in another state who moves to this state makes application within 90 days of establishing legal residence to become a resident licensee under section 60K.37, no prelicensing education or examination is required of that person to obtain any line of authority previously held in the prior state.
HIST: 2001 c 117 art 1 s 11
* NOTE: This section, as added by Laws 2001, chapter 117, *article 1, section 11, is effective July 1, 2002. Laws 2001, *chapter 117, article 1, section 29.
60K.41 Assumed names.
An insurance producer doing business under any name other than the producer's legal name shall provide the commissioner with documentation that the assumed name has been properly filed with the secretary of state before using the assumed name.
HIST: 2001 c 117 art 1 s 12
* NOTE: This section, as added by Laws 2001, chapter 117, *article 1, section 12, is effective July 1, 2002. Laws 2001, *chapter 117, article 1, section 29.
60K.42 Temporary licensing.
Subdivision 1. Commissioner's authority to grant. The commissioner may issue a temporary insurance producer license for a period not to exceed 180 days without requiring an examination if the commissioner considers the temporary license necessary for the servicing of an insurance business in the following cases:
(1) to the surviving spouse or court-appointed personal representative of a licensed insurance producer who dies or becomes mentally or physically disabled to allow adequate time for the sale of the insurance business owned by the producer or for the recovery or return of the producer to the business or to provide for the training and licensing of new personnel to operate the producer's business;
(2) to a member or employee of a business entity licensed as an insurance producer, upon the death or disability of an individual designated in the business entity application or the license;
(3) to the designee of a licensed insurance producer entering active service in the armed forces of the United States of America; or
(4) in any other circumstance where the commissioner considers that the public interest will best be served by the issuance of this license.
Subd. 2. Limitations. The commissioner may by order limit the authority of any temporary licensee in any way considered necessary to protect insureds and the public. The commissioner may require the temporary licensee to have a suitable sponsor who is a licensed producer or insurer and who assumes responsibility for all acts of the temporary licensee and may impose other similar requirements designed to protect insureds and the public. The commissioner may by order revoke a temporary license if the interests of insureds or the public are endangered. A temporary license may not continue after the owner or the personal representative disposes of the business.
HIST: 2001 c 117 art 1 s 13
* NOTE: This section, as added by Laws 2001, chapter 117, *article 1, section 13, is effective July 1, 2002. Laws 2001, *chapter 117, article 1, section 29.
60K.43 License denial, nonrenewal, or revocation.
Subdivision 1. Causes. The commissioner may, by order, restrict, censure, suspend, revoke, or refuse to issue or renew an insurance producer's license or may levy a civil penalty under section 45.027 or any combination of actions, for any one or more of the following causes:
(1) providing incorrect, misleading, incomplete, or materially untrue information in the licensing application;
(2) violating any insurance laws, including chapter 45 or chapters 60A to 72A, or violating any regulation, subpoena, or order of the commissioner or of another state's insurance commissioner;
(3) obtaining or attempting to obtain a license through misrepresentation or fraud;
(4) improperly withholding, misappropriating, or converting any money or properties received in the course of doing insurance business;
(5) misrepresenting the terms of an actual or proposed insurance contract or application for insurance;
(6) having pled guilty, with or without explicitly admitting guilt, pled nolo contendere, or been convicted of a felony, gross misdemeanor, or misdemeanor involving moral turpitude, including, but not limited to, assault or similar conduct;
(7) having admitted or been found to have committed any insurance unfair trade practice or fraud;
(8) using fraudulent, coercive, or dishonest practices, or demonstrating incompetence, untrustworthiness, or financial irresponsibility whether or not involving the business of insurance in this state or elsewhere;
(9) having an insurance producer license, or its equivalent, denied, suspended, or revoked, or having been the subject of a fine or any other discipline in any other state, province, district, or territory;
(10) forging another's name to an application for insurance or to any document, whether or not related to an insurance transaction;
(11) improperly using notes or any other reference material to complete an examination for an insurance license;
(12) knowingly accepting insurance business from an individual who is not licensed;
(13) failing to comply with an administrative or court order imposing a child support obligation;
(14) failing to pay state income tax or comply with any administrative or court order directing payment of state income tax;
(15) being permanently or temporarily enjoined by any court of competent jurisdiction from engaging in or continuing any conduct or practice involving any aspect of the insurance business;
(16) making any communication to a potential buyer that gives the impression that the producer is acting on behalf of a government agency; or
(17) while performing residential mortgage activity regulated under chapter 58, violating any notification, disclosure, or recordkeeping requirement, or any standard of conduct imposed by chapter 58.
Subd. 2. Hearing rights. (a) If the commissioner determines that the producer is in violation of this section, the commissioner may issue an order requiring a licensee to show cause why any or all of the following should not occur:
(1) the revocation or suspension of the license;
(2) the censuring of the licensee; or
(3) the imposition of a civil penalty.
The order must be calculated to give reasonable notice of the time and place for hearing on the matter and must state the reasons for the entry of the order. The commissioner may, by order, summarily suspend a license pending final determination of any order to show cause. If a license is suspended pending final determination of an order to show cause, a hearing on the merits must be held within 30 days of the issuance of the order of suspension. All hearings must be conducted in accordance with the provisions of chapter 14. After the hearing, the commissioner shall enter an order disposing of the matter as the facts require. If the licensee fails to appear at a hearing after having been duly notified of it, the licensee shall be considered in default, and the proceeding may be determined against the licensee upon consideration of the order to show cause, the allegations of which may be considered to be true.
(b) In the event that the action by the commissioner is to nonrenew or to deny an application for a license, the commissioner shall notify the applicant or licensee and advise, in writing, the applicant or licensee of the reason for the denial or nonrenewal of the applicant's or licensee's license. The applicant or licensee may make written demand upon the commissioner within 30 days for a hearing to determine the reasonableness of the commissioner's action. The hearing must be held within 30 days and must be held pursuant to the contested case provisions of chapter 14. If no hearing is requested within 30 days of service of the notice of nonrenewal or denial, the nonrenewal or denial becomes final.
Subd. 3. Actions against business entity. The license of a business entity may be suspended, revoked, or refused if the commissioner finds, after hearing, that an individual licensee's violation was known or should have been known by one or more of the partners, officers, or managers acting on behalf of the partnership or corporation and the violation was not reported to the commissioner in a timely manner.
Subd. 4. Fine. In addition to or in lieu of any applicable denial, suspension, or revocation of a license, a person may, after hearing, be subject to a civil fine according to section 45.027, subdivision 6.
Subd. 5. Other authority of the commissioner. If a license lapses, is surrendered, withdrawn, terminated, or otherwise becomes ineffective, the commissioner may institute a proceeding under this subdivision within two years after the license was last effective and enter a revocation or suspension order as of the last date on which the license was in effect, or impose a civil penalty as provided for in section 45.027, subdivision 6.
Subd. 6. Conditions for relicensure. A revocation of a license prohibits the licensee from making a new application for a license for at least two years from the effective date of the revocation. Further, the commissioner shall, as a condition of reapplication, require the applicant to obtain a performance bond issued by an insurer authorized to transact business in this state in the amount of $20,000 or a greater amount the commissioner considers appropriate for the protection of citizens of this state in the event the commissioner grants the application. The bond must be filed with the commissioner, with the state of Minnesota as obligee, conditioned for the prompt payment to any aggrieved person entitled to payment of any amounts received by the licensee or to protect any aggrieved person from loss resulting from fraudulent, deceptive, dishonest, or other prohibited practices arising out of any transaction when the licensee was licensed or performed acts for which a license is required under this chapter. The bond remains operative for as long as that licensee is licensed. The bond required by this subdivision must provide coverage for all matters arising during the period of licensure.
HIST: 2001 c 117 art 1 s 14
* NOTE: This section, as added by Laws 2001, chapter 117, *article 1, section 14, is effective July 1, 2002. Laws 2001, *chapter 117, article 1, section 29.
60K.44 Tax clearance certificate.
Subdivision 1. Requirement for issuance or renewal of license. In addition to the provisions of section 60K.43, the commissioner may not issue or renew a license if the commissioner of revenue notifies the commissioner and the licensee or applicant for a license that the licensee or applicant owes the state delinquent taxes in the amount of $500 or more. The commissioner may issue or renew the license only if:
(1) the commissioner of revenue issues a tax clearance certificate; and
(2) the commissioner of revenue or the licensee or applicant forwards a copy of the clearance certificate to the commissioner.
The commissioner of revenue may issue a clearance certificate only if the licensee or applicant does not owe the state any uncontested delinquent taxes.
Subd. 2. Definitions. For purposes of this section, the following terms have the meanings given them:
(1) "taxes" are all taxes payable to the commissioner of revenue, including penalties and interest due on those taxes; and
(2) "delinquent taxes" do not include a tax liability if (i) an administrative or court action that contests the amount or validity of the liability has been filed or served, (ii) the appeal period to contest the tax liability has not expired, or (iii) the licensee or applicant has entered into a payment agreement to pay the liability and is current with the payments.
Subd. 3. Contested case hearing. In lieu of the notice and hearing requirements of section 60K.43, when a licensee or applicant is required to obtain a clearance certificate under this section, a contested case hearing must be held if the licensee or applicant requests a hearing in writing to the commissioner of revenue within 30 days of the date of the notice provided in subdivision 1. The hearing must be held within 45 days of the date the commissioner of revenue refers the case to the office of administrative hearings. Notwithstanding any law to the contrary, the licensee or applicant must be served with 20 days' notice in writing specifying the time and place of the hearing and the allegations against the licensee or applicant. The notice may be served personally or by mail.
Subd. 4. Identification required. The commissioner shall require all licensees or applicants to provide their social security number and Minnesota business identification number on all license applications. Upon request of the commissioner of revenue, the commissioner must provide to the commissioner of revenue a list of all licensees and applicants, including the name and address, social security number, and business identification number. The commissioner of revenue may request a list of the licensees and applicants no more than once each calendar year.
HIST: 2001 c 117 art 1 s 15
* NOTE: This section, as added by Laws 2001, chapter 117, *article 1, section 15, is effective July 1, 2002. Laws 2001, *chapter 117, article 1, section 29.
60K.45 Surrender of license.
The commissioner shall promptly notify the licensee and all appointing insurers, where applicable, of any suspension, revocation, or termination of the licensee's producer license by the commissioner. Upon receipt of the notice of suspension or revocation of a license, the licensee shall immediately deliver it to the commissioner.
HIST: 2001 c 117 art 1 s 16
* NOTE: This section, as added by Laws 2001, chapter 117, *article 1, section 16, is effective July 1, 2002. Laws 2001, *chapter 117, article 1, section 29.
60K.46 Required acts.
Subdivision 1. Personal solicitation of insurance sales. (a) For the purpose of this section, "personal solicitation" means any contact by a producer, or any person acting on behalf of a producer, made for the purpose of selling or attempting to sell insurance, when either the producer or the person acting for the producer contacts the buyer in person, by telephone, or by electronic means, except:
(1) an attempted sale in which the buyer personally knows the identity of the producer, the name of the general agency, if any, which the producer represents, and the fact that the producer is an insurance producer;
(2) an attempted sale in which the prospective purchaser of insurance initiated the contact; or
(3) a personal contact which takes place at the producer's place of business.
(b) Before a personal solicitation, the producer or person acting for a producer shall, at the time of initial personal contact with the potential buyer, clearly and expressly disclose in writing:
(1) the name of the person making the contact;
(2) the name of the producer, general agency, or insurer that the person represents; and
(3) the fact that the producer, agency, or insurer is in the business of selling insurance.
If the initial personal contact is made by telephone, the disclosures required by this subdivision need not be made in writing.
Subd. 2. Fees for services. No person shall charge a fee for any services rendered in connection with the solicitation, negotiation, or servicing of any insurance contract unless:
(1) before rendering the services, a written statement is provided disclosing:
(i) the services for which fees are charged;
(ii) the amount of the fees;
(iii) that the fees are charged in addition to premiums; and
(iv) that premiums include a commission; and
(2) all fees charged are reasonable in relation to the services rendered.
Subd. 3. Commissions or compensation. A duly licensed producer may pay commissions or assign or direct that commissions be paid to a partnership of which the producer is a member, employee, or agent, or to a corporation of which the producer is an officer, employee, or agent.
Subd. 4. Suitability of insurance. In recommending the purchase of any life, endowment, individual accident and sickness, long-term care, annuity, life-endowment, or Medicare supplement insurance to a customer, a producer must have reasonable grounds for believing that the recommendation is suitable for the customer and must make reasonable inquiries to determine suitability. The suitability of a recommended purchase of insurance will be determined by reference to the totality of the particular customer's circumstances, including, but not limited to, the customer's income, the customer's need for insurance, and the values, benefits, and costs of the customer's existing insurance program, if any, when compared to the values, benefits, and costs of the recommended policy or policies. This subdivision does not apply to limited lines insurance under section 60K.38, subdivision 1, paragraph (c).
Subd. 5. Premiums. All premiums or other money received by a producer from an insured or applicant for insurance must be promptly deposited directly in a business checking, savings, or other similar account maintained by the producer or agency, unless the money is forwarded directly to the designated insurer.
Subd. 6. Privacy of insured. Except as otherwise provided by law, no insurance producer may disclose or cause to be disclosed to any other person the identity of a person insured through the producer without the consent of the insured.
Subd. 7. Altering existing policies; written binders required. An insurance producer having express authority to bind coverage, who orally agrees on behalf of an insurer to provide insurance coverage, or to alter an existing insurance agreement, shall execute and deliver a written memorandum or binder containing the terms of the oral agreement to the insured within three business days from the time the oral agreement is entered.
HIST: 2001 c 117 art 1 s 17
* NOTE: This section, as added by Laws 2001, chapter 117, *article 1, section 17, is effective July 1, 2002. Laws 2001, *chapter 117, article 1, section 29.
60K.47 Liability for placing insurance in unauthorized company.
Any person, whether or not licensed as an insurance producer, who participates in any manner in the sale of any insurance policy or certificate, or any other contract providing benefits, for or on behalf of any company that is required to be, but that is not authorized to engage in the business of insurance in this state, other than pursuant to sections 60A.195 to 60A.209, is personally liable for all premiums, whether earned or unearned, paid by the insured, and the premiums may be recovered by the insured. In addition, that person is personally liable for any loss the insured has sustained or may sustain if the loss is one resulting from a risk or hazard covered in the issued policy, certificate, or contract, or which would have been covered if the policy, certificate, or contract had been issued to the purchaser of the insurance.
HIST: 2001 c 117 art 1 s 18
* NOTE: This section, as added by Laws 2001, chapter 117, *article 1, section 18, is effective July 1, 2002. Laws 2001, *chapter 117, article 1, section 29.
60K.48 Commissions.
Subdivision 1. Payment prohibited. An insurance company or insurance producer shall not pay a commission, service fee, brokerage, or other valuable consideration to a person for selling, soliciting, or negotiating insurance in this state if that person is required to be licensed under sections 60K.31 to 60K.57 and is not so licensed.
Subd. 2. Acceptance prohibited. A person shall not accept a commission, service fee, brokerage, or other valuable consideration for selling, soliciting, or negotiating insurance in this state if that person is required to be licensed under sections 60K.31 to 60K.57 and is not so licensed.
Subd. 3. Exceptions. (a) Renewal or other deferred commissions may be paid to a person for selling, soliciting, or negotiating insurance in this state if the person was required to be licensed under sections 60K.31 to 60K.57 at the time of the sale, solicitation, or negotiation and was so licensed at that time.
(b) An insurer or insurance producer may pay or assign commissions, service fees, brokerages, or other valuable consideration to an insurance agency or to persons who do not sell, solicit, or negotiate insurance in this state, unless the payment would constitute an illegal rebate or otherwise violate section 72A.20, subdivision 10. A duly licensed producer may pay commissions or assign or direct that commissions be paid to a partnership of which the producer is a member, employee, or agent, or to a corporation of which the agent is an officer, employee, or agent.
HIST: 2001 c 117 art 1 s 19
* NOTE: This section, as added by Laws 2001, chapter 117, *article 1, section 19, is effective July 1, 2002. Laws 2001, *chapter 117, article 1, section 29.
60K.49 Appointments.
Subdivision 1. Agent of insurer. A person performing acts requiring a producer license under this chapter is at all times the agent of the insurer and not the insured.
Subd. 2. Requirements. Except as described in subdivision 3, a licensed insurance producer shall not engage in the business of insurance with an insurer unless the producer either:
(1) has been appointed by that insurer; or
(2) has the permission of the insurer to transact business on its behalf and obtains an appointment from the insurer within 15 days after the first application is submitted to the insurer.
Subd. 3. Exception. A licensed insurance producer may, in response to the needs of a customer, procure insurance in a class of insurance for which the producer is licensed from an insurer by which the producer is not appointed, if the transaction is consummated through an appointed agent of the insurer.
Subd. 4. Procedure. To appoint a producer as its agent, the appointing insurer shall file, in a format approved by the commissioner, a notice of appointment within 15 days from the date the agency contract is executed or the first insurance application is submitted. An insurer may also elect to appoint a producer to all or some insurers within the insurer's holding company system or group by the filing of a single appointment request. No insurer shall appoint a producer until the producer obtains a license under this chapter.
Subd. 5. Eligibility. Upon receipt of the notice of appointment, the commissioner shall verify within a reasonable time not to exceed 30 days that the insurance producer is eligible for appointment. If the insurance producer is determined to be ineligible for appointment, the commissioner shall notify the insurer within five days of its determination.
Subd. 6. Fees. An insurer shall pay an appointment fee, in the amount and method of payment set forth in section 60A.14, subdivision 1, for each insurance producer appointed by the insurer.
Subd. 7. Period of effectiveness. Appointments shall remain in force until voluntarily terminated by the insurer or the producer, or until the license of the producer has been terminated for any reason. An insurer may terminate the appointment at any time by notifying the commissioner and the producer under section 60K.51. If the insurer does not specify an effective date, the termination is effective on the date the notice is received by the commissioner. Within 30 days after the insurer gives notice to the commissioner, the insurer shall furnish the producer with a current statement of the producer's commission account.
HIST: 2001 c 117 art 1 s 20
* NOTE: This section, as added by Laws 2001, chapter 117, *article 1, section 20, is effective July 1, 2002. Laws 2001, *chapter 117, article 1, section 29.
60K.50 Limitation on appointments.
No insurer or representative of an insurer shall knowingly appoint a producer who is known to the insurer or representative to have engaged in any of the activities in section 60K.43 or to be otherwise unqualified or unfit. Upon discovery by the insurer or a representative of the insurer that an appointed producer has engaged in any of the activities in section 60K.43 or is otherwise unqualified or unfit, the insurer shall immediately terminate the appointment and notify the commissioner as set forth in section 60K.51. No insurer shall employ a producer whose license has been revoked.
HIST: 2001 c 117 art 1 s 21
* NOTE: This section, as added by Laws 2001, chapter 117, *article 1, section 21, is effective July 1, 2002. Laws 2001, *chapter 117, article 1, section 29.
60K.51 Notification to commissioner of termination.
Subdivision 1. Termination for cause. An insurer or authorized representative of the insurer that terminates the appointment, employment, contract, or other insurance business relationship with a producer shall notify the commissioner within 30 days following the effective date of the termination, using a format acceptable to the commissioner, if the reason for termination is one of the reasons set forth in section 60K.43 or the insurer has knowledge that the producer was found by a court, government body, or self-regulatory organization authorized by law to have engaged in any of the activities in section 60K.43. Upon the written request of the commissioner, the insurer shall provide additional information, documents, records, or other data pertaining to the termination or activity of the producer.
Subd. 2. Termination without cause. An insurer or authorized representative of the insurer that terminates the appointment, employment, or contract with a producer for any reason not set forth in section 60K.43 shall notify the commissioner within 30 days following the effective date of the termination, using a format acceptable to the commissioner. Upon written request of the commissioner, the insurer shall provide additional information, documents, records, or other data pertaining to the termination.
Subd. 3. Ongoing notification requirement. The insurer or the authorized representative of the insurer shall promptly notify the commissioner in a format acceptable to the commissioner if, upon further review or investigation, the insurer discovers additional information that would have been reportable to the commissioner under subdivision 1 had the insurer then known of its existence.
Subd. 4. Copy of notification to be provided to producer. (a) Within 15 days after making the notification required by subdivisions 1 to 3, the insurer shall mail a copy of the notification to the producer at the producer's last known address. If the producer is terminated for cause for any of the reasons listed in section 60K.43, the insurer shall provide a copy of the notification to the producer at the producer's last known address by certified mail, return receipt requested, postage prepaid, or by overnight delivery using a nationally recognized carrier.
(b) Within 30 days after the producer has received the original or additional notification, the producer may file written comments concerning the substance of the notification with the commissioner. The producer shall, by the same means, simultaneously send a copy of the comments to the reporting insurer. The comments become a part of the commissioner's file and must accompany every copy of a report distributed or disclosed for any reason about the producer as permitted under subdivision 6.
Subd. 5. Immunities. (a) In the absence of actual malice, an insurer, the authorized representative of the insurer, a producer, the commissioner, or an organization of which the commissioner is a member and that compiles the information and makes it available to other insurance commissioners or regulatory or law enforcement agencies is not subject to civil liability, and no civil cause of action arises against these entities or their respective agents or employees, as a result of any statement or information required by or provided pursuant to this section or any information relating to any statement that may be requested in writing by the commissioner, from an insurer or producer. The immunity granted in this subdivision extends to a statement by a terminating insurer or producer to an insurer or producer limited solely and exclusively to whether a termination for cause under subdivision 1 was reported to the commissioner, provided that the propriety of any termination for cause under subdivision 1 is certified in writing by an officer or authorized representative of the insurer or producer terminating the relationship.
(b) In any action brought against a person that may have immunity under paragraph (a) for making any statement required by this section or providing any information relating to any statement that may be requested by the commissioner, the party bringing the action shall plead specifically in any allegation that paragraph (a) does not apply because the person making the statement or providing the information did so with actual malice.
(c) Paragraph (a) or (b) does not abrogate or modify any existing statutory or common law privileges or immunities.
Subd. 6. Classification of investigative data. Any documents, materials, or other information in the control or possession of the department of commerce that is furnished by an insurer, producer, or an employee or agent of an insurer or producer acting on behalf of the insurer or producer, or obtained by the commissioner in an investigation pursuant to this section is classified as confidential or private data pursuant to section 13.41, subdivision 2.
HIST: 2001 c 117 art 1 s 22
* NOTE: This section, as added by Laws 2001, chapter 117, *article 1, section 22, is effective July 1, 2002. Laws 2001, *chapter 117, article 1, section 29.
60K.52 Use and sharing of licensing and investigative data.
Subdivision 1. Commissioner's authority. In order to assist in the performance of the commissioner's duties under sections 60K.31 to 60K.57, the commissioner:
(1) may share licensing data or any active or inactive investigative data with other state, federal, and international regulatory agencies, with the National Association of Insurance Commissioners, its affiliates or subsidiaries, and with state, federal, and international law enforcement authorities if the recipient agrees to maintain the data in a manner consistent with its data classification;
(2) may receive documents, materials, or information, including otherwise confidential and privileged documents, materials, or information, from the National Association of Insurance Commissioners, its affiliates or subsidiaries, and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material, or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material, or information; and
(3) may enter into agreements governing sharing and use of information consistent with this subdivision.
No waiver of any applicable privilege or claim of confidentiality in the documents, materials, or information occurs as a result of disclosure to the commissioner under this section or as a result of sharing as authorized in this subdivision.
Nothing in sections 60K.31 to 60K.57 prohibits the commissioner from releasing information concerning final, adjudicated actions, including for-cause terminations, to a database or other clearinghouse service maintained by the National Association of Insurance Commissioners, its affiliates, or subsidiaries of the National Association of Insurance Commissioners.
Subd. 2. Penalties for failing to report. An insurer, the authorized representative of the insurer, or a producer that fails to report as required under this section or that is found to have reported with actual malice by a court of competent jurisdiction may, after notice and hearing, have its license or certificate of authority suspended or revoked and may be fined in accordance with section 45.027.
HIST: 2001 c 117 art 1 s 23
* NOTE: This section, as added by Laws 2001, chapter 117, *article 1, section 23, is effective July 1, 2002. Laws 2001, *chapter 117, article 1, section 29.
60K.53 Reciprocity.
Subdivision 1. Nonresident license waiver. The commissioner shall waive any requirements for a nonresident license applicant with a valid license from the applicant's home state, except the requirements imposed by section 60K.39, if the applicant's home state awards nonresident licenses to residents of this state on the same basis.
Subd. 2. Continuing education requirements. A nonresident producer's satisfaction of that person's home state's continuing education requirements for licensed insurance producers constitutes satisfaction of this state's continuing education requirements if the nonresident producer's home state recognizes the satisfaction of its continuing education requirements imposed upon producers from this state on the same basis.
HIST: 2001 c 117 art 1 s 24
* NOTE: This section, as added by Laws 2001, chapter 117, *article 1, section 24, is effective July 1, 2002. Laws 2001, *chapter 117, article 1, section 29.
60K.54 Reporting of actions.
Subdivision 1. Administrative actions. A producer shall report to the commissioner any administrative action taken against the producer in another jurisdiction or by another governmental agency in this state within 30 days of the final disposition of the matter. This report must include a copy of the order, consent to order, or other relevant legal documents.
Subd. 2. Criminal prosecutions. Within 30 days of the initial pretrial hearing date, a producer shall report to the commissioner any criminal prosecution of the producer taken in any jurisdiction. The report must include a copy of the initial complaint filed, the order resulting from the hearing, and any other relevant legal documents. In addition, a producer shall report to the commissioner within ten days any conviction, guilty plea, or plea of nolo contendere to any felony or gross misdemeanor.
HIST: 2001 c 117 art 1 s 25
* NOTE: This section, as added by Laws 2001, chapter 117, *article 1, section 25, is effective July 1, 2002. Laws 2001, *chapter 117, article 1, section 29.
60K.55 Fees.
Subdivision 1. Renewal fees. Each producer licensed under this chapter shall pay a renewal fee as prescribed by subdivision 2.
Subd. 2. Licensing fees. (a) In addition to fees provided for examinations, each insurance producer licensed under this chapter shall pay to the commissioner a fee of:
(1) $40 for an initial life, accident and health, property, or casualty license issued to an individual insurance producer, and a fee of $40 for each renewal;
(2) $75 for an initial variable life and variable annuity license issued to an individual insurance producer, and a fee of $50 for each renewal;
(3) $80 for an initial personal lines license issued to an individual insurance producer, and a fee of $80 for each renewal;
(4) $80 for an initial limited lines license issued to an individual insurance producer, and a fee of $80 for each renewal;
(5) $200 for an initial license issued to a business entity, and a fee of $150 for each renewal; and
(6) $500 for an initial surplus lines license, and a fee of $500 for each renewal.
(b) Initial licenses issued under this chapter are valid for a period not to exceed 24 months and expire on October 31 of the renewal year assigned by the commissioner. Each renewal insurance producer license is valid for a period of 24 months. Licensees who submit renewal applications postmarked or delivered on or before October 15 of the renewal year may continue to transact business whether or not the renewal license has been received by November 1. Licensees who submit applications postmarked or delivered after October 15 of the renewal year must not transact business after the expiration date of the license until the renewal license has been received.
(c) All fees are nonreturnable, except that an overpayment of any fee may be refunded upon proper application.
HIST: 2001 c 117 art 1 s 26
* NOTE: This section, as added by Laws 2001, chapter 117, *article 1, section 26, is effective July 1, 2002. Laws 2001, *chapter 117, article 1, section 29.
60K.56 Continuing insurance education.
Subdivision 1. Definition. For the purposes of this section, "course" means a course, program of instruction, or seminar of continuing insurance education. A "professional designation examination" means a written, proctored, and graded examination the passage of which leads to a bona fide insurance or financial planning professional designation used by insurance producers.
Subd. 2. Applicability. This section applies to all natural persons licensed by this state to sell lines of insurance for which licensing examinations are required.
Subd. 3. Exemptions. This section does not apply to persons soliciting or selling solely on behalf of companies organized and operating according to chapter 67A.
Subd. 4. Powers of the commissioner. (a) The commissioner shall make the final determination as to accreditation and assignment of credit hours for courses.
(b) The commissioner shall adopt procedures for reporting compliance with the minimum education requirement.
(c) The commissioner shall adopt rules according to chapter 14 to carry out the purposes of this section.
Subd. 5. Criteria for course accreditation. (a) The commissioner may accredit a course only to the extent it is designed to impart substantive and procedural knowledge of the insurance field. The burden of demonstrating that the course satisfies this requirement is on the individual or organization seeking accreditation. The commissioner shall approve any educational program approved by Minnesota Continuing Legal Education relating to the insurance field. The commissioner is authorized to establish a procedure for renewal of course accreditation.
(b) The commissioner shall approve or disapprove professional designation examinations that are recommended for approval by the advisory task force. In order for an insurance producer to receive full continuing education credit for a professional designation examination, the producer must pass the examination. A producer may not receive credit for classroom instruction preparing for the professional designation examination and also receive continuing education credit for passing the professional designation examination.
(c) The commissioner may not accredit a course:
(1) that is designed to prepare students for a license examination;
(2) in mechanical office or business skills, including typing, speedreading, use of calculators, or other machines or equipment;
(3) in sales promotion, including meetings held in conjunction with the general business of the licensed agent; or
(4) in motivation, the art of selling, psychology, or time management.
Subd. 6. Minimum education requirement. Each person subject to this section shall complete a minimum of 30 credit hours of courses accredited by the commissioner during each 24-month licensing period. Any person whose initial licensing period extends more than six months shall complete 15 hours of courses accredited by the commissioner during the initial license period. Any person teaching or lecturing at an accredited course qualifies for 1-1/2 times the number of credit hours that would be granted to a person completing the accredited course. No more than 15 credit hours per licensing period may be credited to a person for courses sponsored by, offered by, or affiliated with an insurance company or its agents. Courses sponsored by, offered by, or affiliated with an insurance company or agent may restrict its students to agents of the company or agency.
Subd. 7. Waiver of requirements. (a) The commissioner may grant a waiver or an extension of time up to 90 days to complete the minimum education requirement to an individual upon a showing of good cause. It is the licensed person's responsibility to request a waiver or extension on a form prescribed by the commissioner. As of the day the licensed person properly files a request for a waiver or extension, the license remains in effect until the commissioner notifies the licensed person of the commissioner's decision. The commissioner may approve a waiver or extension subject to any reasonable conditions. The person's license remains in effect during the compliance period determined by the commissioner. If the licensed person fails to comply with any reasonable conditions imposed by the commissioner, the commissioner shall terminate the license. If the request for a waiver or extension is denied by the commissioner, the licensed person shall have 30 days within which to satisfy the minimum education requirement involved in the request for a waiver or extension. If the minimum education requirement is not satisfied within the compliance period, the commissioner shall terminate the person's license.
(b) Upon application on a form prescribed by the commissioner, the commissioner may grant a waiver of the minimum education requirement to a licensee who is no longer actively engaged in the solicitation and sale of insurance. A licensed person seeking a waiver from the requirements of this section may be required to submit information to the commissioner that substantiates the person's retirement or inactive status. A licensed person receiving a waiver from the commissioner may maintain and renew a license but may not solicit or sell new insurance business while this waiver is in effect. A licensee may, for a fee, continue to service an insurance policy for which the licensee is the producer of record, if the policy is in force at the time the waiver is granted. An insurer may not terminate a service contract or refuse to pay compensation because the waiver does not allow the licensee to solicit or sell new insurance.
For the purposes of receiving renewal commissions and other benefits or compensation from insurers, an agent receiving a waiver under this paragraph is considered to be the holder of a valid insurance producer license in this state.
Subd. 8. Reporting. (a) After completing the minimum education requirement, each person subject to this section shall file or cause to be filed a compliance report in accordance with the procedures adopted by the commissioner. The compliance report must not claim credit for continuing education not actually completed at the date of filing the report.
(b) An institution offering an accredited course shall comply with the procedure for reporting compliance adopted by the commissioner.
(c) If a person subject to this section completes a nonaccredited course, that person may submit a written report to the advisory committee accompanied by a fee of not more than $10 payable to the state of Minnesota for deposit in the general fund. This report must be accompanied by proof satisfactory to the commissioner that the person has completed the minimum education requirement for the annual period during which the nonaccredited course was completed. Upon the recommendation of the advisory committee that the course satisfies the criteria for course accreditation, the commissioner may approve the nonaccredited course and shall so inform the person. If the nonaccredited course is approved by the commissioner, it may be used to satisfy the minimum education requirement for the person's next annual compliance period.
Subd. 9. Enforcement. If a person subject to this section fails to complete the minimum education or reporting requirement or to pay the prescribed fees for any licensing period, no license may be renewed or continued in force for that person for any class of insurance beginning June 1 of the year due and that person may not act as an insurance producer until the person has demonstrated to the satisfaction of the commissioner that all requirements of this section have been complied with or that a waiver or extension has been obtained.
HIST: 2001 c 117 art 1 s 27
* NOTE: This section, as added by Laws 2001, chapter 117, *article 1, section 27, is effective July 1, 2002. Laws 2001, *chapter 117, article 1, section 29.
Official Publication of the State of Minnesota
Revisor of Statutes