Bill Text: CT SB00480 | 2014 | General Assembly | Comm Sub

Connecticut Senate Bill 480 (Prior Session Legislation)

Bill Title: An Act Concerning Life Insurance Producer Licenses And Registrations Of Broker-dealers, Agents, Investment Advisers And Investment Adviser Agents, And The Insurance Commissioner's Authority To Deny An Application For An Insurance Producer License.

Spectrum:

Status: (Passed) 2014-06-13 - Signed by the Governor [SB00480 Detail]

Download: Connecticut-2014-SB00480-Comm_Sub.html


General Assembly		*Raised Bill No. 480*
*February Session, 2014*		LCO No. 2367
		_____SB00480INS___032014____
Referred to Committee on INSURANCE AND REAL ESTATE
Introduced by:
(INS)

AN ACT CONCERNING LIFE INSURANCE PRODUCER LICENSES AND REGISTRATIONS OF BROKER-DEALERS, AGENTS, INVESTMENT ADVISERS AND INVESTMENT ADVISER AGENTS.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. (NEW) (Effective October 1, 2014) (a) The Banking Commissioner shall provide monthly to the Insurance Commissioner, in a form and manner agreed upon by said commissioners, a list of the names and corresponding Social Security numbers of broker-dealers, agents associated with a broker-dealer or an issuer, investment advisers and investment adviser agents, as such terms are defined in section 36b-3 of the general statutes, (1) who are currently registered with the Banking Commissioner, and (2) who have had their registrations denied, suspended or revoked pursuant to section 36b-15 of the general statutes during the preceding ten years. The list under subdivision (2) of this subsection shall include the reason for such denial, suspension or revocation.

(b) (1) The Insurance Commissioner shall determine whether any applicant for a life insurance producer license who submits such application on or after October 1, 2014, or any licensed life insurance producer is included in the list set forth in subdivision (2) of subsection (a) of this section.

(2) (A) If the Insurance Commissioner determines that an applicant for a life insurance producer license is included in the list under subdivision (2) of subsection (a) of this section, said commissioner shall consider, in addition to the grounds for denial of a license set forth in section 38a-702k of the general statutes, as amended by this act, the denial, suspension or revocation of such applicant's registration under section 36b-15 of the general statutes in determining whether to grant such license. Said commissioner may deny such application if said commissioner determines such applicant is not properly qualified or trustworthy and that granting such license is against the public interest.

(B) If such application is denied, the Insurance Commissioner shall notify the applicant and advise, in writing, the applicant of the reason for the denial of the applicant's license. The applicant may make written demand upon said commissioner, not later than thirty days after the applicant receives such notice, for a hearing before said commissioner to determine the reasonableness of said commissioner's action. The hearing shall be held not later than twenty days after said commissioner receives such request and shall be held in accordance with section 38a-19 of the general statutes.

(C) An individual aggrieved by a final order or decision of the Insurance Commissioner in denying an insurance producer license under this section may appeal therefrom in accordance with the provisions of section 4-183 of the general statutes, except venue for such appeal shall be in the judicial district of New Britain.

(3) (A) If the Insurance Commissioner determines that a licensed life insurance producer is included in the list under subdivision (2) of subsection (a) of this section, said commissioner shall consider, if the denial, suspension or revocation of such licensee's registration under section 36b-15 of the general statutes was not previously disclosed or known to said commissioner, whether such denial, suspension or revocation, in addition to the grounds for nonrenewal, suspension or revocation of a license set forth in section 38a-702k of the general statutes, as amended by this act, materially affects the qualifications or trustworthiness of such licensee. Said commissioner shall, after reasonable notice to such licensee, hold a hearing to make such determination. Said commissioner may nonrenew, suspend or revoke a life insurance producer license of such licensee if said commissioner determines such licensee is not qualified or trustworthy and that renewing or continuing such license is against the public interest.

(B) If such license is nonrenewed, suspended or revoked, the Insurance Commissioner shall notify the licensee and advise, in writing, the licensee of the reason for such nonrenewal, suspension or revocation. An individual aggrieved by an order or decision of said commissioner in nonrenewing, suspending or revoking a life insurance producer license under this section may appeal therefrom in accordance with the provisions of section 4-183 of the general statutes, except venue for such appeal shall be in the judicial district of New Britain.

(c) The denial of an application for or the nonrenewal, suspension or revocation of a life insurance producer license shall not affect an application for or the continuation of a license for any other line of insurance.

Sec. 2. Subsection (a) of section 38a-702e of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2014):

(a) (1) 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. The commissioner shall not approve the application unless the commissioner finds that the individual [(1)] (A) is at least eighteen years of age; [(2)] (B) has not committed any act that is a ground for denial, suspension or revocation set forth in section 38a-702k, as amended by this act, or section 1 of this act; [(3)] (C) has completed, where required by the commissioner, a prelicensing course of study for the lines of authority for which the person has applied; [(4)] (D) has paid the fees set forth in section 38a-11; and [(5)] (F) has successfully passed the examinations for the lines of authority for which the person has applied.

(2) The uniform application shall include a requirement for applicants to disclose whether an applicant for a life insurance producer license has had a registration as a broker-dealer, an agent associated with a broker-dealer or an issuer, an investment adviser or an investment adviser agent, as such terms are defined in section 36b-3 denied, suspended or revoked pursuant to section 36b-15 during the preceding ten years.

Sec. 3. Subsection (a) of section 38a-702f of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2014):

(a) Unless a person is denied a license pursuant to section 38a-702k, as amended by this act, or with respect to an insurance producer license for life insurance, is denied such license or such license is nonrenewed, suspended or revoked pursuant to section 1 of this act, any person who has met the requirements of sections 38a-702d and 38a-702e, as amended by this act, shall be issued an insurance producer license. An insurance producer may receive qualification for a license in one or more of the following lines of authority: (1) life: insurance coverage on human lives including benefits of endowment and annuities, which 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 which 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 legal liability 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; (6) personal lines: property and casualty coverage sold to individuals and families for noncommercial purposes; (7) credit: limited line credit insurance; and (8) any other line of insurance permitted under this state's laws or regulations.

Sec. 4. Subsection (a) of section 38a-702g of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2014):

Sec. 5. Section 38a-702k of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2014):

(a) (1) The commissioner may place on probation, suspend, revoke or refuse to issue or renew an insurance producer's license or may levy a civil penalty in accordance with the provisions of this title, or may take any combination of such actions, for any one or more of the following causes: [(1)] (A) Providing incorrect, misleading, incomplete or materially untrue information in the license application; [(2)] (B) violating any insurance laws, or violating any regulation, subpoena or order of the commissioner or of another state's commissioner; [(3)] (C) obtaining or attempting to obtain a license through misrepresentation or fraud; [(4)] (D) improperly withholding, misappropriating or converting any moneys or properties received in the course of doing an insurance business; [(5)] (E) intentionally misrepresenting the terms of an actual or proposed insurance contract or application for insurance; [(6)] (F) having been convicted of a felony; [(7)] (G) having admitted or been found to have committed any insurance unfair trade practice or fraud; [(8)] (H) using fraudulent, coercive or dishonest practices, or demonstrating incompetence, untrustworthiness or financial irresponsibility in the conduct of business in this state or elsewhere; [(9)] (I) having an insurance producer license, or its equivalent, denied, suspended or revoked in any other state, province, district or territory; [(10)] (J) forging another's name to an application for insurance or to any document related to an insurance transaction; [(11)] (K) improperly using notes or any other reference material to complete an examination for an insurance license; [(12)] (L) knowingly accepting insurance business from an individual who is not licensed; [(13)] (M) failing to comply with an administrative or court order imposing a child support obligation; or [(14)] (N) failing to pay state income tax or comply with any administrative or court order directing payment of state income tax.

(2) In addition to the provisions of subdivision (1) of this subsection, the commissioner may suspend, revoke or refuse to issue or renew an insurance producer's license for life insurance in accordance with section 1 of this act.

(b) If the action by the commissioner is to nonrenew a license or to deny an application for a license under subdivision (1) of subsection (a) of this section, 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, not later than thirty days after the notice, for a hearing before the commissioner to determine the reasonableness of the commissioner's action. The hearing shall be held not later than twenty days after receipt of such request and shall be held pursuant to section 38a-19.

(c) The license of a business entity may be suspended, revoked or refused if the commissioner finds, after hearing, that an individual licensee's violation under subdivision (1) of subsection (a) of this section 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 commissioner nor corrective action taken.

(d) 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 pursuant to section 38a-774.

(e) The commissioner shall retain the authority to enforce the provisions of, and impose any penalty or remedy authorized by, this title against any person who is under investigation for or charged with a violation of this title even if the person's license or registration has been surrendered or has lapsed by operation of law.


This act shall take effect as follows and shall amend the following sections:
Section 1	October 1, 2014	New section
Sec. 2	October 1, 2014	38a-702e(a)
Sec. 3	October 1, 2014	38a-702f(a)
Sec. 4	October 1, 2014	38a-702g(a)
Sec. 5	October 1, 2014	38a-702k