Req. No. 478

STATE OF OKLAHOMA

1st Session of the 48th Legislature (2001)

SENATE BILL 379 By: Price

An Act relating to insurance; creating the Oklahoma

Producer Licensing Act; providing short title;

stating scope; amending 36 O.S. 1991, Section 1422,

as last amended by Section 59, Chapter 418, O.S.L.

1997 (36 O.S. Supp. 2000, Section 1422), which

relates to licensing definitions; adding and

modifying definitions; amending 36 O.S. 1991, Section

1423, as last amended by Section 2, Chapter 246,

O.S.L. 1996 (36 O.S. Supp. 2000, Section 1423), which

relates to agency status and authority; modifying

reinstatement of lapsed license; providing for waiver

in certain circumstances; providing for nonresident

licensing; amending 36 O.S. 1991, Section 1426, as

amended by Section 79, Chapter 418, O.S.L. 1997 (36

O.S. Supp. 2000, Section 1426), which relates to

exemptions from examination requirements; providing

for mandatory exemptions; requiring insurance

producer to notify the Insurance Commissioner of use

of assumed name; providing for temporary licensing;

providing for license denial, nonrenewal or

confidentiality; providing for reciprocity;

authorizing promulgation of rules; amending Section

60, Chapter 418, O.S.L. 1997, as last amended by

Section 9, Chapter 353, O.S.L. 2000 (36 O.S. Supp.

2000, Section 1424.11), which relates to categories

for licensure; providing for limited lines

qualification; modifying lines for which a limited

lines producer may receive qualification; amending

Section 63, Chapter 418, O.S.L. 1997 (36 O.S. Supp.

2000, Section 1424.14), which relates to controlled

which relates to licensing; providing for fees;

providing that certain fees are not refundable with

exception; amending Section 71, Chapter 418, O.S.L.

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1997, as amended by Section 34, Chapter 205, O.S.L.

2000 (36 O.S. Supp. 2000, Section 1425.2), which

relates to qualification for licensure as a resident

or nonresident; limiting scope of section; amending

Section 73, Chapter 418, O.S.L. 1997 (36 O.S. Supp.

2000, Section 1425.4), which relates to surplus lines

Chapter 353, O.S.L. 2000 (36 O.S. Supp. 2000, Section

1426A), which relates to continuing education;

modifying terms; amending 36 O.S. 1991, Section 1427,

as amended by Section 80, Chapter 418, O.S.L. 1997

(36 O.S. Supp. 2000, Section 1427), which relates to

insurance consultants; modifying terms; amending

Section 6, Chapter 246, O.S.L. 1996 (36 O.S. Supp.

2000, Section 1427.1), which relates to customer

service representatives; modifying terms; amending

Section 24, Chapter 178, O.S.L. 1992 (36 O.S. Supp.

O.S.L. 1997, 1428, as last amended by Section 13,

Chapter 353, O.S.L. 2000, 1430, 1431, 1431.1, 1432

and 1433 (36 O.S. Supp. 2000, Sections 1425.7, 1425.9

and 1428), which relate to insurance agent licensing;

providing for codification; providing for

recodification; and providing an effective date.

in the Oklahoma Statutes as Section 1435.1 of Title 36, unless there

is created a duplication in numbering, reads as follows:

A. This act shall be known and may be cited as the "Oklahoma

Producer Licensing Act".

B. This act does not apply to excess and surplus lines agents

last amended by Section 59, Chapter 418, O.S.L. 1997 (36 O.S. Supp.

2000, Section 1422), is amended to read as follows:

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Section 1422. As used in Section 1421 et seq. of this title the

Oklahoma Producer Licensing Act:

1. “Business entity” means a corporation, association,

2. 3. “Customer service representative” means an individual

appointed by an insurance producer, surplus lines insurance broker,

managing general agent, or insurance agency to assist the insurance

producer, broker, or agency in transacting the business of insurance

from the office of the insurance producer, broker, or agency and

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;

5. “Insurance” means any of the lines of authority in Title 36

of the Oklahoma Statutes, including workers’ compensation insurance.

producers. All producers appointed for workers’ compensation

equivalent insurance products must be licensed as property and

casualty insurance producers by the Oklahoma Insurance Department;

6. "Insurance consultant" means an individual or legal entity

who, for a fee, holds himself or herself or itself is held out to

that could be issued or delivered in this state;

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3. "Insurance agent" means an individual or legal entity

appointed by an insurer to solicit applications for a policy of

insurance or to negotiate a policy of insurance on its behalf.

producer, surplus lines insurance broker, or limited insurance

representative who solicits a policy of insurance on behalf of an

insurer shall be deemed to be acting as an insurance agent within

the meaning of this act the Oklahoma Producer Licensing Act, and

shall thereby become liable for all the duties, requirements,

agent in the transaction. For purposes of the laws of this state

and the Oklahoma Insurance Code, the term “insurance agent” shall

have the same meaning as the term “insurance producer”;

8. “Insurer” has the meaning set out in Section 103 of this

title;

document. The license itself does not create any authority, actual,

apparent or inherent, in the holder to represent or commit an

insurance carrier;

10. “Limited line credit insurance” includes credit life,

credit disability, credit property, credit unemployment, involuntary

with an extension of credit that is limited to partially or wholly

extinguishing that credit obligation that the Insurance Commissioner

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determines should be designated a form of limited line credit

insurance;

11. “Limited line credit insurance producer” means a person who

12. “Limited lines insurance” means those lines of insurance

defined in Section 20 of this act or any other line of insurance the

Insurance Commissioner deems necessary to recognize for the purposes

of complying with subsection E of Section 9 of this act;

4. 13. "Limited insurance representative lines producer" means

title, which the Legislature hereby determines does not require the

professional competency demanded for an insurance agent's license

limited lines insurance;

5. 14. "Managing general agent" means an individual or legal

entity appointed, as an independent contractor, by one or more

insurer;

6. 15. “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, provided that the

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17. “Sell” means to exchange a contract of insurance, by any

means, for money or its equivalent, on behalf of an insurance

company;

19. "Surplus lines insurance broker" means an individual or

legal entity who solicits, negotiates, or procures a policy of

insurance in an insurance company not licensed to transact business

in this state which cannot be procured from insurers licensed to do

business in this state. All transactions under such license shall

a producer’s authority to transact insurance;

21. “Uniform Business Entity Application” means the current

version of the National Association of Insurance Commissioners

(NAIC) Uniform Business Entity Application for resident and

nonresident business entities; and

last amended by Section 2, Chapter 246, O.S.L. 1996 (36 O.S. Supp.

2000, Section 1423), is amended to read as follows:

Section 1423. A. Every agent insurance producer, customer

service representative, or limited insurance representative who

solicits or negotiates an application for insurance of any kind

shall not affect the apparent authority of an agent insurance

producer.

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B. Every surplus lines insurance broker who solicits an

application for insurance of any kind shall, in any controversy

between the insured or the insured's beneficiary and the insurer

in this state to any insurance broker, a policy of insurance

pursuant to the application or request of such broker, acting for an

insured other than himself or herself, shall be deemed to have

authorized such broker to receive on its behalf, payment of any

premium which is due on such policy of insurance at the time of its

negotiated by said agent the insurance producer on behalf of an

insurer and an insurer shall be required to pay such commissions to

the agent insurance producer, except entitlement to commissions

shall automatically terminate without notice, effective on the date

of the occurrence of any of the following events:

used in this paragraph, "cause" shall be defined as perpetration by

the agent insurance producer of fraud or embezzlement;

2. Material breach of the agent's insurance producer’s contract

with the account or insurer, excluding production requirements;

3. Termination of the agent's insurance producer’s "Agent of

has vested.

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Recovery of such commissions shall be through civil action. In any

action brought pursuant to this subsection, the court may award

reasonable attorneys fees to the prevailing party.

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 in accordance with this act.

SECTION

in the Oklahoma Statutes as Section 1435.5 of Title 36, unless there

"insurer" does not include an insurer's officers, directors,

employees, subsidiaries or affiliates.

B. A license as an insurance producer shall not be required of

the following:

1. An officer, director or employee of an insurer or of an

and:

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2. 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,

is paid to the person for the service;

3. 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, director or trustees are

engaged in the administration or operation of a program of employee

associations, officers, directors, employees or trustees are not in

any manner compensated, directly or indirectly, by the company

issuing the contracts;

4. Employees of insurers or organizations employed by insurers

who are engaging in the inspection, rating or classification of

5. A person whose activities in this state are limited to

advertising without the intent to solicit insurance in this state

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A. Unless denied licensure pursuant to Section 13 of this act,

a nonresident person shall receive a nonresident producer license

if:

and has paid the fees required by Section 23 of this act;

3. The person has submitted or transmitted to the Insurance

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

licensing status through the Producer Database maintained by the

National Association of Insurance Commissioners, its affiliates or

subsidiaries.

C. A nonresident producer who moves from one state to another

state or a resident producer who moves from this state to another

D. Notwithstanding any other provision of this act or of the

Oklahoma Insurance Code, a person licensed as a surplus lines

producer in that person's home state shall receive a nonresident

surplus lines producer license pursuant to subsection A of this

section.

nonresident limited lines producer license, pursuant to subsection A

of this section, granting the same scope of authority as granted

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under the license issued by the producer's home state. For the

purpose of this subsection, limited line insurance is any authority

granted by the home state which restricts the authority of the

SECTION

amended by Section 79, Chapter 418, O.S.L. 1997 (36 O.S. Supp. 2000,

Section 1426), is amended to read as follows:

Section 1426. A. The following may be are exempt from the

requirement for an examination, if the Insurance Commissioner

1. Any applicant for a license covering the same line or lines

of insurance for which the applicant was licensed pursuant to a

similar license in this state, other than a temporary license,

within the twenty-four (24) months preceding the date of

application, unless the previous license was revoked, suspended, or

4. 2. A surplus lines insurance broker.

SECTION

in the Oklahoma Statutes as Section 1435.11 of Title 36, unless

there is created a duplication in numbering, reads as follows:

An insurance producer doing business under any name other than

in the Oklahoma Statutes as Section 1435.12 of Title 36, unless

there is created a duplication in numbering, reads as follows:

Req. No. 478

A. The Insurance Commissioner may issue a temporary license for

a period not to exceed one hundred eighty (180) days without

requiring an examination if the Insurance Commissioner deems that

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

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 in which the Insurance

of any temporary licensee in any way deemed necessary to protect

insureds and the public. The Insurance 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

not continue after the owner or the personal representative disposes

Req. No. 478

of the business. If the applicant fails to pass the licensure

examination, the temporary license shall terminate automatically.

C. As to a temporary agent's license issued because of the

D. The fee paid for the temporary license shall not be applied

upon the fee for any permanent license of the same category issued

to the licensee before expiration of the temporary license.

E. No license issued pursuant to the provisions of subsection A

of this section shall be effective for more than six (6) months.

who has failed to pass the required examination.

SECTION

in the Oklahoma Statutes as Section 1435.13 of Title 36, unless

there is created a duplication in numbering, reads as follows:

A. The Insurance Commissioner may place on probation, censure,

one or more of the following causes:

1. Providing incorrect, misleading, incomplete or materially

untrue information in the license application;

2. Violating any insurance laws, or violating any regulation,

subpoena or order of the Insurance Commissioner or of another

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4. Improperly withholding, misappropriating or converting any

monies or properties received in the course of doing insurance

business;

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 in the conduct of business in this state or

or territory;

10. Forging another’s name to an application for insurance or

to any document related to an insurance transaction;

11. Improperly using notes or any other reference material to

complete an examination for an insurance license;

imposing a child support obligation; or

14. Failing to pay state income tax or comply with any

administrative or court order directing payment of state income tax.

B. In the event that the action by the Insurance Commissioner

is to nonrenew or to deny an application for a license, the

applicant or licensee may make written demand upon the Insurance

Commissioner within thirty (30) days of the date of notification of

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said notification by the Insurance Commissioner for a hearing before

the Insurance Commissioner or an independent hearing examiner to

determine the reasonableness of the Insurance Commissioner’s action.

or refused if the Insurance Commissioner finds, after opportunity

for 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 neither reported to the Insurance Commissioner nor

may, after opportunity for hearing, be subject to a civil fine of

not less than One Hundred Dollars ($100.00) nor more than One

Thousand Dollars ($1,000.00) for each occurrence. Said penalty may

be enforced in the same manner in which civil judgments may be

enforced.

transactions authorized by the license. All records as to any

particular transactions shall be kept available and open to the

inspection of the Commissioner at any time during business hours

during the three (3) years immediately following the date of

completion of the transaction. The Commissioner may require a

F. The Insurance Commissioner shall retain the authority to

enforce the provisions of and impose any penalty or remedy

Req. No. 478

authorized by this act and Title 36 of the Oklahoma Statutes against

any person who is under investigation for or charged with a

violation of this act or Title 36 of the Oklahoma Statutes even if

contain information concurring a current and ongoing investigation

of allegations of violations of the Oklahoma Insurance Code by a

licensed agent shall not be available for public inspection without

proper judicial authorization; however, a licensee under

investigation for alleged violations of the Oklahoma Insurance Code,

at reasonable times at the Commissioner’s office. All qualification

examination materials, booklets and answers for any license

authorized to be issued by the Commissioner under any statute shall

not be available for public inspection.

H. The Commissioner shall promptly notify all appointing

I. Upon suspension, revocation or termination of the license of

a resident or nonresident of this state, the Commissioner shall

notify the Central Office of the National Association of Insurance

Commissioners, or its appropriate nonprofit affiliates and the

Insurance Commissioner of each state for whom the Commissioner has

by personal delivery or by mail with return receipt requested within

ten (10) days after terminating residency.

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K. The Commissioner may issue a duplicate license for any lost,

stolen or destroyed license issued pursuant to this act upon an

affidavit of the licensee prescribed by the Commissioner concerning

there is created a duplication in numbering, reads as follows:

A. 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 this act and

negotiating insurance in this state if that person is required to be

licensed under this act and is not so licensed.

C. 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 this act at

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 violate Section 1204 of Title 36 of the Oklahoma Statutes.

SECTION

insurer unless the insurance producer becomes an appointed agent of

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that insurer. An insurance producer who is not acting as an agent

of an insurer is not required to become appointed.

B. To appoint a producer as its agent, the appointing insurer

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.

C. Upon receipt of the notice of appointment, the Insurance

Commissioner shall verify within a reasonable time not to exceed

the insurer within five (5) days of its determination.

D. An insurer shall pay a biennial appointment fee, in the

amount and method of payment set forth in Section 23 of this act,

for each insurance producer appointed by the insurer.

E. It shall be unlawful for any insurer to discriminate among

of a fine of not more than Five Hundred Dollars ($500.00) or

imprisonment in the county jail for not less than six (6) months nor

more than one (1) year, or be punished by both said fine and

imprisonment.

SECTION

representative of the insurer that terminates the appointment,

employment, contract or other insurance business relationship with a

Req. No. 478

producer shall notify the Insurance Commissioner within thirty (30)

days following the effective date of the termination, using a format

prescribed by the Insurance Commissioner, if the reason for

to have engaged in any of the activities in Section 13 of this act.

Upon the written request of the Insurance Commissioner, the insurer

shall provide additional information, documents, records or other

data pertaining to the termination or activity of the producer.

B. Termination Without Cause. An insurer or authorized

within thirty (30) days following the effective date of the

termination, using a format prescribed by the Insurance

Commissioner. Upon written request of the Insurance Commissioner,

the insurer shall provide additional information, documents, records

or other data pertaining to the termination.

Commissioner if, upon further review or investigation, the insurer

discovers additional information that would have been reportable to

the Insurance Commissioner in accordance with subsection A of this

section had the insurer then known of its existence.

D. Copy of Notification to be Provided to Producer.

last known address. If the producer is terminated for cause for any

of the reasons listed in Section 13 of this act, the insurer shall

Req. No. 478

4. To engage in the sale of credit life insurance or credit

accident and health insurance or both credit life insurance and

credit accident and health insurance in connection with a credit

upon personal effects against loss or damage from any cause in

connection with a credit transaction of not more than Five Thousand

Dollars ($5,000.00) by which satisfaction of the credit transaction

debt in whole or in part is a benefit provided, and such personal

effects are used as collateral on the debt;

Statutes;

7. 5. Prepaid legal liability insurance, which means the

assumption of an enforceable contractual obligation to provide

specified legal services or to reimburse policyholders for specified

legal expenses, pursuant to the provisions of a group or individual

which satisfaction of a debt in whole or in part is a benefit

provided;

9. 6. Crop hail and multiperil crop hail insurance; and

10. 7. Prepaid dental insurance, provided the individual

selling the prepaid dental insurance has been appointed by the

travel accident policies or baggage insurance by means of mechanical

vending machines supervised by the agent or representative insurance

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producer or limited lines producer only if the Insurance

Commissioner shall determine that the form of policy to be sold is

reasonably suited for sale and issuance through vending machines,

issuance of said policies. Policies so sold do not have to be

countersigned.

2. The Commissioner shall issue to the insurance agent or

limited insurance representative a special vending machine license

for each such machine to be used. The license shall specify the

suspended or revoked coincidentally with the insurance agent license

or limited representative license of the licensee. The license fee

for each vending machine shall be that stated in the provisions of

Section 1425 23 of this title act. Proof of existence of the

license shall be displayed on or about each machine in such manner

follows:

Section 1424.14 A. The Commissioner shall not grant, renew,

continue, or permit to continue any license if the Commissioner

finds that the license is being or will be used by the applicant or

licensee for the purpose of writing controlled business.

Req. No. 478

B. A license shall be deemed to have been or intended to be

used for the purpose of writing controlled business if the

Commissioner finds that during any twelve-month period the aggregate

commissions earned from controlled business has exceeded twenty-five

percent (25%) of the aggregate commissions earned on all business

not apply to title insurance agents producers and limited insurance

representatives lines producers.

SECTION

in the Oklahoma Statutes as Section 1435.22 of Title 36, unless

there is created a duplication in numbering, reads as follows:

by the insurance agent or broker who will supervise the customer

Req. No. 478

service representative, on forms prescribed by the Insurance

Commissioner.

B. 1. Prior to issuance of a license as an insurance

of not less than Five Thousand Dollars ($5,000.00) and not more than

Forty Thousand Dollars ($40,000.00) with an authorized corporate

surety approved by the Commissioner. The exact amount of the bond

shall be determined pursuant to the rules of the Commissioner and

shall be based upon the actual or reasonably estimated premium for

all claims on a bond required by the provisions of this subsection

shall in no event exceed the amount of the bond. No such bond shall

be terminated unless at least thirty (30) days' prior written notice

of the termination is given by the surety to the licensee and the

Commissioner. Upon termination of the license for which the bond

section is to inure to the benefit of any party aggrieved by the

acts of a consultant or broker arising pursuant to conduct as a

licensed insurance consultant or surplus lines insurance broker.

SECTION

last amended by Section 69, Chapter 418, O.S.L. 1997 (36 O.S. Supp.

lines insurance broker, limited insurance representative, or

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customer service representative except in compliance with the

provisions of this section.

B. 1. Application shall be made to the Commissioner by the

agent, or limited insurance representative license shall be

accompanied by a written appointment. The appointment shall be made

by an officer or attorney-in-fact of the insurer designating the

applicant as an insurance agent, managing general agent, or limited

insurance representative for such lines of insurance as the

shall remain in force until expressly terminated in writing by the

insurer or as provided in subsection E of this section. The

Commissioner shall collect from each company a biennial appointment

fee.

3. In connection with the licensure of an applicant, the

maintain an errors and omissions policy acceptable to the

Commissioner, or, if errors and omissions coverage is provided by

the insurer for agents by utilizing a blanket errors and omissions

policy for coverage, a copy of the policy providing the errors and

omissions coverage shall be on file with the Commissioner. The

license renewal shall be accompanied by a written appointment, which

shall remain in effect until expressly terminated in writing, signed

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by the insurance agent or broker who will supervise the customer

service representative, on forms prescribed by the Commissioner.

5. Any insurer approved to offer workers' compensation

insurance products must be licensed as property and casualty agents

by the Oklahoma Insurance Department.

C. Every individual applicant for licensing as an insurance

agent, managing general agent, limited insurance representative, or

customer service representative pursuant to the provisions of the

applicant shall not be a full-time employee of the government of the

United States or of the executive or administrative branches of the

government of this state or any county or municipality in this

state.

2. a. The provisions of this subsection shall not apply to

fees. An appointment may be deemed by the Commissioner to have

terminated upon failure by the insurer to pay the prescribed renewal

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fee. The Commissioner may also by order impose a civil penalty

equal to double the amount of the unpaid renewal fee.

The Insurance Commissioner shall collect in advance the

2. Miscellaneous:

3. Examination for license:

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5. Biennial fee for each appointed agent insurance producer,

7. The fee for a duplicate license shall be one-half (1/2) the

8. The renewal of a license shall require a fee of double the

of subsection E A of this section shall be deposited with the State

Treasurer, who shall place the same to the credit of the State

Insurance Commissioner Revolving Fund for the purpose of fulfilling

and accomplishing the conditions and purposes of the Insurance

Agents Oklahoma Producer Licensing Act, including the use of postal

A of this section shall be paid into the State Treasury to the

credit of the General Revenue Fund of the state.

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G. C. There is hereby created in the State Treasury the State

Insurance Commissioner Revolving Fund which shall be a continuing

fund not subject to fiscal year limitations. The revolving fund

revolving fund shall be used to fund the general operations of the

Insurance Commissioner's Office for the purpose of fulfilling and

accomplishing the conditions and purposes of the Insurance Oklahoma

Producer Licensing Act. All expenditures from said revolving fund

shall be on claims approved by the Insurance Commissioner and filed

of subsection F B of this section to the State Insurance

Commissioner Revolving Fund shall be paid into the State Treasury to

the credit of the General Revenue Fund of this state.

I. 1. Prior to issuance of a license as an insurance

consultant or surplus lines insurance broker, the applicant shall

Forty Thousand Dollars ($40,000.00) with an authorized corporate

surety approved by the Commissioner. The exact amount of the bond

shall be determined pursuant to the rules of the Commissioner and

shall be based upon the actual or reasonably estimated premium for

policies issued in connection with the services of the licensee.

shall in no event exceed the amount of the bond. No such bond shall

be terminated unless at least thirty (30) days' prior written notice

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of the termination is given by the surety to the licensee and the

Commissioner. Upon termination of the license for which the bond

was in effect, the licensee shall notify the surety within ten (10)

acts of a consultant or broker arising pursuant to conduct as a

licensed insurance consultant or surplus lines insurance broker.

E. If for any reason an insurance producer license or

appointment is not issued or renewed by the Commissioner, all fees

accompanying the appointment or application for the license shall be

1997, as amended by Section 34, Chapter 205, O.S.L. 2000 (36 O.S.

Supp. 2000, Section 1425.2), is amended to read as follows:

Section 1425.2 A. The Insurance Commissioner shall issue an

insurance agent's license, managing general agent's license,

insurance consultant's license, a limited insurance representative's

1. An applicant may qualify as a resident if the applicant

resides in this state. Any license issued pursuant to any such

application claiming residency in this state for licensing in this

state shall constitute an election of residency in this state and

shall be void if the licensee, while holding a resident license in

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

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The Insurance Commissioner has sole authority to approve courses

decline to adopt the recommendation within thirty (30) days of

receipt of the recommendation. In the event the Insurance

Commissioner takes no action within said thirty-day period, the

recommendation made to the Commissioner will be deemed to have been

adopted by the Commissioner.

such continuing education meets the general standards for education

otherwise established by the Insurance Commission Commissioner.

3. An agent insurance producer who, during the time period

prior to renewal, successfully completes any one of the following

courses or programs of instruction and equivalent classroom hours

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C. Each provider of continuing education shall, after approval

created in subsection G C of Section 1425 23 of this title act, for

the purposes of fulfilling and accomplishing the conditions and

purposes of the Oklahoma Insurance Agents Producer Licensing Act and

the Insurance Adjusters Licensing Act. Provided, public-funded

educational institutions shall be exempt from this subsection.

suspension, nonrenewal of license or a civil penalty of up to Five

Hundred Dollars ($500.00) or by both such penalty and civil penalty.

Said civil penalty may be enforced in the same manner in which civil

judgments may be enforced. Any civil penalties collected under this

act shall be deposited in the State Insurance Commissioner Revolving

greater requirement as set out in subparagraph b of paragraph 2 of

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subsection A of Section 1424 of this title shall be exempt from the

provisions of this section.

F. Agents Insurance producers and limited insurance

lines producers, and who do not write new business, shall be exempt

from the provisions of this section.

G. The Commissioner shall adopt and promulgate such rules as

are necessary for effective administration of this act.

SECTION

herself out to be, an insurance consultant until a license as an

insurance consultant has been issued to him or her the person by the

Insurance Commissioner. However, no insurance consultant's license

shall be required of the following:

1. Attorneys licensed to practice law in this state acting in

3. A trust officer of a bank acting in the normal course of his

or her employment; or

4. An actuary or a certified public accountant who provides

information, recommendations, advice, or services in his or her a

professional capacity.

properly completed application form, the Commissioner shall hold a

written examination for the applicant, and may conduct

Req. No. 478

investigations and propound interrogatories concerning the

qualifications of the applicant, the residence, business

affiliations, and any other matter which the Commissioner deems

C. In advance of rendering any service as an insurance

consultant as defined in the provisions of Section 1422 2 of this

title act, a written agreement on a form approved by the

Commissioner shall be prepared by the consultant, and shall be

signed by both the consultant and the client. The agreement shall

completion of the services and shall make said copy available to the

Insurance Commissioner upon request by the Insurance Commissioner.

D. No individual may concurrently hold a consultant's license

and a license as an insurance agent producer, surplus lines

insurance broker, or limited insurance representative producer.

agent producer, surplus lines insurance broker, limited insurance

representative producer, or insurer.

F. A license to act as an insurance consultant shall be valid

for not longer than twelve (12) months and may be renewed annually.

G. All requirements and standards relating to the denial,

practicable.

Req. No. 478

H. A consultant is obligated by the terms of this license, to

serve with objectivity and complete loyalty the interests of a

client alone; and render to a client such information, counsel, and

I. A duly licensed insurance agent producer or surplus lines

insurance broker who acts as, or holds himself or herself out to be,

an insurance consultant pursuant to the exemption from licensing as

a consultant contained in the provisions of subsection A of this

section shall nonetheless be subject to the provisions of

compensation otherwise payable to said duly licensed insurance agent

producer or surplus lines insurance broker for acting as an agent

insurance producer or broker.

SECTION

1996 (36 O.S. Supp. 2000, Section 1427.1), is amended to read as

appointed by an insurance agent, surplus lines insurance broker,

managing general agent, or insurance agency to assist the agent,

broker, or agency in transacting the business of insurance from the

office of the agent, broker, or agency and whose salary may vary

based on the production or volume of applications or premiums as

Req. No. 478

B. 1. Any person licensed and appointed as an insurance agent

producer, broker, or managing general agent, except a limited

insurance representative lines producer, and any insurance agency

may appoint and employ as customer service representatives any

persons who hold or have qualified for a customer service

producer, broker, or agency at any one time. The agent insurance

producer or broker designated to supervise the work of the customer

service representative shall sign the appointment form and shall

thereby obligate himself or herself be obligated to supervise the

customer service representative's conduct of insurance-related

he or she the customer service representative is employed and shall

not conduct insurance-related business as authorized herein from any

Req. No. 478

other location. No advertising, letterhead, or telephone listing of

the customer service representative shall indicate any business

address other than that of the agent insurance producer, broker, or

cover any kind of insurance for which the appointing agent insurance

producer, broker, or agency is not licensed or otherwise authorized

to transact.

2. A customer service representative may conduct insurance-

related business with customers who have been solicited by any agent

under conditions that are otherwise consistent with this section and

with the insurer's contract with the agent insurance producer or

broker. In all such transactions the customer service

representative must always identify himself or herself as a customer

service representative of the appointing agent insurance producer,

agency. Compensation shall not include commissions; however, up to

forty-nine percent (49%) of such compensation may be based on

production or volume of business.

4. All insurance-related business conducted by a customer

service representative shall be in the name of the appointing agent

such appointment.

Req. No. 478

SECTION

1992 (36 O.S. Supp. 2000, Section 5103), is amended to read as

follows:

or employee of a firm or association, or an officer, director or

employee of a corporation:

1. In this state, unless such RB is a licensed producer in this

state; or

2. In another state, unless such RB is a licensed producer in

B. No person, firm, association or corporation shall act as an

RM a reinsurance intermediary manager (RM):

1. For a reinsurer domiciled in this state, unless such RM is a

licensed producer in this state;

2. In this state, if the RM maintains an office either directly

3. In another state for a nondomestic insurer, unless such RM

is a licensed producer in this state or another state having a law

substantially similar to this law or such person is licensed in this

state as a nonresident reinsurance intermediary.

C. The Insurance Commissioner may require an RM subject to the

2. Maintain an errors and omissions policy in an amount

acceptable to the Commissioner.

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D. 1. The Commissioner may issue a reinsurance intermediary

license to any person, firm, association or corporation who has

complied with the requirements of the Reinsurance Intermediary Act.

all such persons shall be named in the application and any

supplements thereto. Any such license issued to a corporation shall

authorize all of the officers, and any designated employees and

directors thereof to act as reinsurance intermediaries on behalf of

the corporation, and all such persons shall be named in the

holding a license, shall designate the Commissioner as agent for

service of process in the manner, and with the same legal effect,

provided for by the Reinsurance Intermediary Act for designation of

service of process upon unauthorized insurers; and also shall

furnish the Commissioner with the name and address of a resident of

writing of every change in its designated agent for service of

process, and such change shall not become effective until

acknowledged by the Commissioner.

E. The Commissioner may refuse to issue a reinsurance

intermediary license if, in his the judgment of the Commissioner,

reinsurance intermediary, or that any of the foregoing has given

cause for revocation or suspension of such license, or has failed to

Req. No. 478

comply with any prerequisite for the issuance of such license. Upon

written request therefor, the Commissioner shall furnish a summary

of the basis for refusal to issue a license, which document shall be

section.

G. Licenses issued by the Commissioner pursuant to this section

shall be issued for a period of twenty-four (24) months. The

license shall not be issued unless the application for the license

is accompanied by a license fee of One Hundred Dollars ($100.00).

H. The terms “reinsurance intermediary broker (RB)” and

“reinsurance intermediary manager (RM)” shall have the meanings

provided in Section 5102 of this title.

SECTION

as last amended by Section 13, Chapter 353, O.S.L. 2000, 1430, 1431,

1425.9 and 1428), are hereby repealed.

SECTION

1423, 1426, 1425 and 1427, as last amended by Sections 2, 3, 10, 23

and 30 of this act, shall be recodified as Sections 1435.2, 1435.3,

1435.10, 1435.23 and 1435.30 of Title 36 of the Oklahoma Statutes,

Section 29 of this act, shall be recodified as Section 1435.29 of

Title 36 of the Oklahoma Statutes, unless there is created a