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. 19890S0408B1910 - 2 -
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 19890S0408B1910 - 3 -
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 19890S0408B1910 - 4 -
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. L19L40JRW/19890S0408B1910 - 5 -