DAR File No. 30446

Insurance, Administration

R590-118

Licensing Examination Rule

NOTICE OF PROPOSED RULE

DAR File No.: 30446
Filed: 09/14/2007, 10:34
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

This rule is being repealed since the insurance code contains the necessary requirements for licensing examination.

Summary of the rule or change:

Section R590-118-4 is no longer needed since Utah has adopted the National Association of Insurance Commissioners (NAIC) Uniformity Guidelines, including the licensing exemption standards. This rule is repealed in its entirety.

State statutory or constitutional authorization for this rule:

Sections 31A-2-201, 31A-23-207, 31A-23-211, and 31A-26-207

Anticipated cost or savings to:

the state budget:

The repeal of this rule will have no fiscal impact on the state's budget. There will be no change to the workload at the department or the forms that are filed with the department. No additional people will need to be hired.

local governments:

Since the rule deals with the relationship between the department and their licensees local governments will not be affected by its repeal.

small businesses and persons other than businesses:

The repeal of this rule will have no impact on insurance consumers since the rule deals only with insurance licensing applicants. Its repeal will have no fiscal impact on the great majority of these applicants. Those with an insurance designation that either have not had an insurance license or their license has been lapsed for more than one year will need to take a licensing examination to obtain a license. They are exempt from that requirement under the current rule.

Compliance costs for affected persons:

The repeal of this rule will have no impact on insurance consumers since the rule deals only with insurance licensing applicants. Its repeal will have no fiscal impact on the great majority of these applicants. Those with an insurance designation that either have not had an insurance license or their license has been lapsed for more than one year will need to take a licensing examination to obtain a license. They are exempt from that requirement under the current rule.

Comments by the department head on the fiscal impact the rule may have on businesses:

This rule will have almost no fiscal impact on businesses. D. Kent Michie, Commissioner

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Insurance
Administration
Room 3110 STATE OFFICE BLDG
450 N MAIN ST
SALT LAKE CITY UT 84114-1201

Direct questions regarding this rule to:

Jilene Whitby at the above address, by phone at 801-538-3803, by FAX at 801-538-3829, or by Internet E-mail at jwhitby@utah.gov

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

10/31/2007

This rule may become effective on:

11/07/2007

Authorized by:

Jilene Whitby, Information Specialist

R590. Insurance, Administration.

[R590-118. Licensing Examination Rule.

R590-118-1. Authority.

This rule is promulgated by the Commissioner of Insurance pursuant to Section 31A-2-201(3) authorizing rules to implement the Utah Insurance Code and Sections 31A-23-207(1), 31A-26-207(1) and 31A-23-211(5)(a) permitting the commissioner to require and provide for the administration of examinations for designated license classes.

 

R590-118-2. Purpose and Scope.

A. The purpose of this rule is to provide for the administration of qualification examinations for licenses permitted in Sections 31A-23-207(1), 31A-26-207(1) and 31A-23-211(5)(a).

B. The rule shall apply to all designated prospective individual license classes under the Insurance Code except Surplus Lines and Managing General Agent, and for all lines of insurance except Credit Life and Disability.

 

R590-118-3. Definitions.

For the purposes of this rule "Candidate Pass Ratio" is the proportion of individual candidates who successfully complete the examination, rather than the number of examinations attempted. Candidate rather than examination data is used to prevent the skewing of results caused by multiple failures by marginal candidates.

 

R590-118-4. Examination.

A. Requirement. Examinations shall be required to qualify candidates for all lines of insurance listed under Sections 31A-23-204 and 31A-26-204 except credit life and disability or other limited lines designated by the commissioner, and examinations shall also be required for the licensure classes of Agent, Broker, Consultant, and Adjuster. Surplus line and Managing General Agent licenses do not require an examination.

B. Administration. With the exception of NASD examinations for variable annuity licensure, all license examinations shall be administered, upon order of the commissioner, by an examination contractor according to Insurance Department specifications.

C. Procedures. Examination procedures are set forth in detail in a publication entitled "Utah Insurance Department Licensing Information Bulletin," which is available from the Insurance Department. An applicant must take and pass the examination for the type of license which is being applied for. The license application, examination registration form and the correct license fee, as required in Rule R590-102, must be submitted to the Insurance Department within 90 days of the examination pass date in order for a license to be issued. After 90 days, the examination must be retaken. Individuals currently licensed as agents who are applying for a broker or consultant license must request and receive approval from the Insurance Department before registering for an examination.

 

R590-118-5. Conditions or Exceptions.

A. This rule does not apply to applicants for Surplus Line Broker, Managing General Agent, Credit Life and Disability, or other limited agent licenses for lines of insurance designated by the commissioner.

B. The examination required of an agent or broker applicant for the applicable lines of insurance shall be waived by the commissioner if the applicant holds the designation of Fellow, Life Management Institute (FLMI), Chartered Life Underwriter (CLU) or Chartered Property Casualty Underwriter (CPCU).

C. The examination required of Life/Health Consultants shall be waived for holders of the following designations: Fellow, Life Management Institute (FLMI); Chartered Life Underwriter (CLU); Chartered Financial Consultant (ChFC); or Certified Financial Planner (CFP). The examination required of Property/Liability Consultants shall be waived for holders of the Chartered Property Casualty Underwriter (CPCU) designation.

D. An individual moving from another state to Utah must obtain a letter of clearance and complete the required examination process, which would take into account retaliatory requirements, within 90 days from the date the person's license was cancelled in their home state. If action is not taken until after the 90 day deadline the individual must meet all of the Utah resident licensing requirements.

E. If an individual moves from Utah to another state, becomes licensed in that state, and then moves back to Utah, the individual may request reinstatement of their Utah resident license. The license will be reinstated without the requirement of examination if reinstatement is within one year from the date the letter of clearance was issued by the Utah Insurance Department.

F. Section 31A-23-201(2) that permits the commissioner to recognize additional license classifications as to other types of insurance, and Section 31A-23-201(2) that permits the exemption, by the commissioner, of certain classes of persons from the requirements of licensure, are not the subject of this rule.

 

R590-118-6. Separability.

If any provision of this rule or its application to any person or circumstance is for any reason held to be invalid, the remainder of the rule and the application of such provision to other persons or circumstances may not be affected.

 

KEY: insurance, occupational licensing

Date of Enactment or Last Substantive Amendment: October 1, 1996

Notice of Continuation: April 13, 2007

Authorizing, and Implemented or Interpreted Law: 31A-23-206; 31A-23-207]