PRIOR PRINTER'S NO. 423 PRINTER'S NO. 1910
No. 408 Session of 1989
INTRODUCED BY PECORA AND LYNCH, FEBRUARY 6, 1989
SENATOR HOLL, BANKING AND INSURANCE, AS AMENDED,
FEBRUARY 7, 1990
AN ACT
1 Amending the act of May 17, 1921 (P.L.789, No.285), entitled, as
2 amended, "An act relating to insurance; establishing an
3 insurance department; and amending, revising, and
4 consolidating the law relating to the licensing,
5 qualification, regulation, examination, suspension, and
6 dissolution of insurance companies, Lloyds associations,
7 reciprocal and inter-insurance exchanges, and certain
8 societies and orders, the examination and regulation of fire
9 insurance rating bureaus, and the licensing and regulation of
10 insurance agents and brokers; the service of legal process
11 upon foreign insurance companies, associations or exchanges;
12 providing penalties, and repealing existing laws," PROVIDING <--
13 FOR ENDORSEMENT OF AGENTS' WORTHINESS BY SPONSORING
14 COMPANIES; AND providing for disclosure by the Insurance
15 Commissioner of certain information relating to agents.
16 The General Assembly of the Commonwealth of Pennsylvania
17 hereby enacts as follows:
18 Section 1. The act of May 17, 1921 (P.L.789, No.285), known
19 as The Insurance Department Act of one thousand nine hundred and
20 twenty-one, is amended by adding a section to read:
21 Section 602.1. Insurance Commissioner Disclosure Relating to <--
22 Agents.--(a) The Insurance Commissioner, upon a formal request
23 from an insurance company for disclosure relating to the
1 affirmative declaration by an applicant for additional standard
2 licensure, shall disclose any information from the records of
3 the Insurance Department which is relevant to the affirmative
4 declaration of the applicant that the applicant:
5 (1) has engaged in such conduct as would disqualify that
6 agent from obtaining additional licenses;
7 (2) has been penalized or fined, had a license refused,
8 suspended or revoked by the Insurance Department or has such an
9 action pending; or
10 (3) has been indicted or involved in criminal proceedings or
11 has received written notifications or termination of prior
12 appointments due to an account being in dispute with an
13 insurance company, association or exchange.
14 (b) The Insurance Commissioner, upon a receipt of an
15 application for additional standard licensure that is
16 accompanied by a request from that company for disclosure, shall
17 disclose any information from the records of the Insurance
18 Department as required in subsection (a).
19 (c) The Insurance Commissioner may not disclose information
20 under this section unless the applicant specifically consents in
21 writing to the disclosure within fifteen days of receipt of a
22 written request for disclosure by the Insurance Department.
23 (d) Requested information shall be made available to the
24 company within ten days of receipt by the Insurance Commissioner
25 of the applicant's written consent to the disclosure.
26 (e) No insurance company or agent shall be held liable for a
27 violation of section six hundred four if, subsequent to the
28 issuance of a temporary license upon completion of the
29 application for an additional standard license, the Insurance
30 Commissioner deems the applicant not worthy of a license.
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1 (f) The Insurance Commissioner, a designated deputy of the
2 Insurance Commissioner and the Insurance Department, after
3 strictly complying with the requirement and restrictions of this
4 section, may not be held liable to another on account of the
5 disclosures made.
6 SECTION 602.1. ENDORSEMENT OF AGENTS' WORTHINESS BY <--
7 SPONSORING COMPANY.--(A) AN INSURANCE COMPANY SUBMITTING AN
8 APPLICATION FOR ADDITIONAL STANDARD LICENSURE ON BEHALF OF AN
9 AGENT MUST CERTIFY THAT THE AGENT IS OF GOOD BUSINESS
10 REPUTATION, IS EXPERIENCED IN UNDERWRITING OTHER THAN
11 SOLICITATION AND IS WORTHY OF LICENSURE. EFFORTS BY COMPANIES TO
12 VERIFY THE AGENT'S EMPLOYMENT HISTORY, REFERENCES, CURRENT
13 RESIDENCE AND CRIMINAL RECORD, IF ANY, SHALL BE DEEMED TO BE A
14 REASONABLE EFFORT OF VERIFICATION FOR PURPOSES OF THIS SECTION.
15 THE INSURANCE COMMISSIONER MAY REQUEST ADDITIONAL INVESTIGATION
16 OR VERIFICATION OF AN AGENT'S BACKGROUND AND RESPONSES, IF THE
17 INSURANCE COMMISSIONER CITES SPECIFIC FACTS OR CIRCUMSTANCES
18 WARRANTING SUCH ACTION. PROVIDED, HOWEVER, THAT FAILURE BY AN
19 INSURANCE COMPANY TO SPECIFY PENDING ACTIONS BY THE INSURANCE
20 DEPARTMENT OR OTHER PENDING CRIMINAL PROCEEDINGS, INCLUDING, BUT
21 NOT LIMITED TO, INDICTMENTS, SHALL NOT BE USED BY THE INSURANCE
22 COMMISSIONER IN DETERMINING WHETHER THE INSURANCE COMPANY
23 UNDERTOOK REASONABLE EFFORTS OF VERIFICATION FOR PURPOSES OF
24 THIS SECTION.
25 (B) THE INSURANCE COMMISSIONER SHALL FURNISH THE FOLLOWING
26 INFORMATION TO ASSIST INSURANCE COMPANIES IN THEIR CERTIFICATION
27 PROCESS:
28 (1) CERTIFICATION OF AGENT'S LICENSE HISTORY INDICATING
29 INSURERS REPRESENTED, EMPLOYMENT DATES AND WHETHER ANY LICENSES
30 HAVE BEEN TERMINATED BY AN INSURER OR BY THE INSURANCE
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1 DEPARTMENT.
2 (2) A LIST OF THE COMPANIES CURRENTLY REPRESENTED BY THE
3 AGENT.
4 (3) COPIES OF CONSENT ORDERS AND ADJUDICATIONS DOCKETED WITH
5 THE INSURANCE DEPARTMENT'S ADMINISTRATIVE HEARING OFFICE. SUCH
6 INFORMATION SHALL INCLUDE, BUT NOT BE LIMITED TO, ANY FINDING BY
7 THE INSURANCE DEPARTMENT THAT THE APPLICANT:
8 (I) HAS ENGAGED IN SUCH CONDUCT AS WOULD DISQUALIFY THE
9 AGENT FROM OBTAINING ADDITIONAL LICENSES; OR
10 (II) HAS BEEN PENALIZED OR FINED, HAD A LICENSE REFUSED,
11 SUSPENDED OR REVOKED BY THE INSURANCE DEPARTMENT.
12 (C) THE INSURANCE DEPARTMENT SHALL PUBLISH IN THE
13 PENNSYLVANIA BULLETIN A LIST OF EVERY AGENT WHO HAS SIGNED A
14 CONSENT ORDER OR WHO HAS BEEN THE SUBJECT OF AN ORDER AND
15 ADJUDICATION BY THE INSURANCE COMMISSIONER DURING THE PREVIOUS
16 MONTH TO ASSIST COMPANIES IN EVALUATING THE WORTHINESS OF THEIR
17 AGENCY FORCE.
18 (D) THE INFORMATION IN SUBSECTION (B) SHALL BE RELEASED BY
19 THE INSURANCE DEPARTMENT, UPON RECEIPT OF AN APPLICATION FOR
20 ADDITIONAL STANDARD LICENSURE THAT IS ACCOMPANIED BY A REQUEST
21 FROM THAT COMPANY FOR DISCLOSURE.
22 (E) THE INSURANCE COMMISSIONER MAY NOT DISCLOSE INFORMATION
23 UNDER THIS SECTION UNLESS THE APPLICANT SPECIFICALLY CONSENTS IN
24 WRITING TO THE DISCLOSURE WITHIN FIFTEEN DAYS OF RECEIPT OF A
25 WRITTEN REQUEST FOR DISCLOSURE BY THE INSURANCE DEPARTMENT, OR
26 UNLESS THE WRITTEN CONSENT OF THE APPLICANT ACCOMPANIES THE
27 REQUEST FOR DISCLOSURE BY THE INSURANCE COMPANY.
28 (F) REQUESTED INFORMATION SHALL BE MADE AVAILABLE TO THE
29 COMPANY WITHIN TEN DAYS OF RECEIPT BY THE INSURANCE COMMISSIONER
30 OF THE APPLICANT'S WRITTEN CONSENT TO THE DISCLOSURE AS PROVIDED
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1 IN SUBSECTION (E).
2 (G) THE INSURANCE DEPARTMENT MAY CHARGE THE REQUESTING
3 COMPANY AN APPROPRIATE FEE SHOULD ADDITIONAL COSTS BE INCURRED
4 BY THE INSURANCE DEPARTMENT TO COMPLY WITH SUBSECTION (B).
5 (H) NO INSURANCE COMPANY OR AGENT SHALL BE HELD LIABLE FOR A
6 VIOLATION OF SECTION 604 IF, SUBSEQUENT TO THE ISSUANCE OF A
7 TEMPORARY LICENSE UPON COMPLETION OF THE APPLICATION FOR AN
8 ADDITIONAL STANDARD LICENSE, THE INSURANCE COMMISSIONER DEEMS
9 THE APPLICANT NOT WORTHY OF A LICENSE.
10 (I) THE INSURANCE COMMISSIONER, A DESIGNATED DEPUTY OF THE
11 INSURANCE COMMISSIONER AND THE INSURANCE DEPARTMENT, AFTER
12 STRICTLY COMPLYING WITH THE REQUIREMENT AND RESTRICTIONS OF THIS
13 SECTION, MAY NOT BE HELD LIABLE TO ANOTHER ON ACCOUNT OF THE
14 DISCLOSURES MADE.
15 Section 2. This act shall take effect immediately.
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