BILL NUMBER: SB 63 CHAPTERED 08/13/01 CHAPTER 174 FILED WITH SECRETARY OF STATE AUGUST 13, 2001 APPROVED BY GOVERNOR AUGUST 12, 2001 PASSED THE SENATE JULY 21, 2001 PASSED THE ASSEMBLY JULY 19, 2001 AMENDED IN ASSEMBLY JUNE 25, 2001 AMENDED IN SENATE APRIL 17, 2001 AMENDED IN SENATE MARCH 28, 2001 AMENDED IN SENATE MARCH 14, 2001 INTRODUCED BY Senator Scott JANUARY 8, 2001 An act to amend Sections 1625, 1625.5, 1676, and 1749 of the Insurance Code, relating to insurance, and declaring the urgency thereof, to take effect immediately. LEGISLATIVE COUNSEL'S DIGEST SB 63, Scott. Insurance. Existing law authorizes a fire and casualty licensee to act as an insurance agent, broker, or solicitor, and to transact 24-hour care coverage, as defined. This bill would also authorize a fire and casualty licensee to transact the coverages that a personal lines licensee is authorized to transact. Existing law, operative January 1, 2002, requires the examination and licensure of a person to act as a personal lines licensee, as defined. Existing law, operative January 1, 2002, authorizes the Insurance Commissioner to exempt an applicant for a personal lines license from having to fulfill the examination requirement if the applicant has been continuously employed by an admitted insurer or licensed fire and casualty broker-agent in a full-time position for at least 3 years prior to January 1, 2001. This bill would instead authorize the commissioner to exempt an applicant for a personal lines license from having to fulfill the examination requirement if the 3 years of required employment were immediately prior to January 1, 2001. The bill would provide that a personal lines licensee includes a person authorized to transact recreational vehicle and inland marine insurance. The bill would also specify the prelicensing education and other requirements for a personal lines agent who applies to become a fire and casualty broker-agent. The bill would declare that it is to take effect immediately as an urgency statute. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 1625 of the Insurance Code is amended to read: 1625. A fire and casualty licensee is a person authorized to act as an insurance agent, broker, or solicitor, and a fire and casualty broker-agent license is a license so to act. A fire and casualty licensee is also authorized to transact 24-hour care coverage, as defined in Section 1749.02, and any coverage that a personal lines licensee is authorized to transact pursuant to Section 1625.5. SEC. 2. Section 1625.5 of the Insurance Code is amended to read: 1625.5. (a) A personal lines licensee is a person authorized to transact automobile insurance, as defined in Section 660, including insurance for recreational vehicles used for noncommercial purposes, personal watercraft insurance, residential property insurance, as defined in Section 10087, including earthquake and flood insurance, inland marine insurance covering personal property, and umbrella or excess liability insurance providing coverage when written over one or more underlying automobile or residential property insurance policies, and a personal lines broker-agent license is a license to so act. (b) A license under this section shall be applied for and renewed, following successful completion of a qualifying examination on this code, ethics, and products sold under the license, in the same manner as is provided in this chapter for a license to act as a fire and casualty broker-agent, except as provided in subdivision (c) or where provided otherwise. (c) A person licensed as a personal lines agent who makes an application to the commissioner to become a fire and casualty broker-agent pursuant to Section 1625 shall do all of the following: (1) Submit an application on a form provided by the commissioner. (2) Complete prelicensing education as specified in Section 1749. (3) Take and pass a qualifying examination pursuant to Section 1676. (d) Notwithstanding any other provision of law, for a personal lines license: (1) "License term" for a personal lines license means all of that two-year period beginning on the first day of January and ending the last day of December in the second subsequent year. (2) "License year" for a personal lines license means either the first or second calendar year of a license term. SEC. 3. Section 1676 of the Insurance Code is amended to read: 1676. (a) Except as set forth in Sections 1675 and 1679, the commissioner shall not issue a permanent license pursuant to this chapter to an applicant therefor unless the applicant has within the 12-month period next preceding the date of issue of the license taken and passed the qualifying examination for that license. This section shall not apply to a person licensed as a fire and casualty broker-agent who applies for a license as a personal lines broker-agent. (b) An applicant for a personal lines license pursuant to Section 1625.5 who has been continually employed by an admitted insurer or licensed fire and casualty broker-agent in a full-time position for at least three years immediately prior to January 1, 2001, shall be exempted, at the discretion of the commissioner, from having to take and pass an examination to obtain a personal lines license. An exempted applicant shall be required to comply with all other provisions of this article pertaining to the issuance and maintenance of a personal lines license. The curriculum board shall establish criteria, which shall be submitted to the commissioner for final approval, to allow experience or prior training to be substituted for prelicensing educational requirements for applicants applying for an exemption pursuant to this subdivision. A licensee exempted from examination pursuant to this subdivision shall remain subject to all continuing education requirements applicable to maintaining a personal lines license. (c) An application for a personal lines license shall be submitted to the commissioner as provided for in Article 4 (commencing with Section 1652). (d) The commissioner may deny any application for a personal lines license as provided in Article 6 (commencing with Section 1666). (e) In addition to the application, any applicant for a personal lines license seeking exemption from the examination provisions of this chapter shall also submit, on a form prescribed by the commissioner, or if a form is not prescribed, in letter or resume form, information that will permit the commissioner to determine whether the previous experience of the applicant for a personal lines license warrants an exemption from having to take an examination to obtain a license. (f) The commissioner shall require an applicant for a personal lines license to take an examination to obtain a license if the commissioner determines that the applicant has failed to demonstrate that previous experience warrants an exemption from examination. In the absence of making that determination, the request for exemption from examination shall be granted. (g) This section shall not be applicable to any applicant for a nonresident license pursuant to subdivision (b) of Section 1639. (h) This section shall not be applicable to any applicant for a personal lines license who has been refused a license or has had a license suspended or revoked by the commissioner. (i) An applicant for a personal lines license pursuant to Section 1625.5 who seeks an exemption from an examination to obtain a license shall submit a request to that effect to the commissioner. An applicant who does not submit an application on or before December 31, 2001, shall be required to take an examination to obtain a license. SEC. 4. Section 1749 of the Insurance Code, as amended by Chapter 321 of the Statutes of 2000, is amended to read: 1749. The department shall require all new applicants for license as a fire and casualty broker-agent, personal lines broker-agent, or as a life agent to meet prelicensing education standards as follows: (a) Require a minimum of 40 hours of prelicensing classroom study as a prerequisite to qualification for a fire and casualty broker-agent license. The curriculum for satisfying this requirement shall be approved by the curriculum board and submitted to the commissioner for final approval. Any additions to the minimum requirements provided by this section shall be approved by the curriculum board pursuant to Section 1749.1 and certified by the department. (b) Require a minimum of 20 hours of prelicensing classroom study as a prerequisite for qualification for a personal lines broker-agent license. The curriculum for satisfying this requirement shall be approved by the curriculum board and submitted to the commissioner for final approval. Any additions to the minimum requirements provided by this section shall be approved by the curriculum board pursuant to Section 1749.1 and certified by the department. (c) Require a minimum of 40 hours of prelicensing classroom study as a prerequisite for qualification for a life agent license. The curriculum for satisfying this requirement shall be approved by the curriculum board and submitted to the commissioner for final approval. Any additions to the minimum requirements provided by this section shall be approved by the curriculum board pursuant to Section 1749.1 and certified by the department. This curriculum shall also include instruction in workers' compensation and general principles of employers' liability. (d) In addition to the 40 hours prelicensing education required to qualify for a license as a fire and casualty broker-agent or life agent, or the 20 hours prelicensing education required to qualify for a license as a personal lines broker-agent, the department shall require 12 hours of study on ethics and this code. Where an applicant seeks a license for both the fire and casualty broker-agent license and the life license, the applicant shall only be required to complete one 12-hour course on ethics and this code. The curriculum for satisfying this requirement shall be approved by the curriculum board and submitted to the commissioner for final approval. (e) An applicant for a life agent license, a fire and casualty broker-agent license, or a personal lines broker-agent license who is currently licensed as such in another state and who has completed 40 hours of prelicensing education as a requirement for licensing in that state shall be required to complete only the course of study on ethics and the Insurance Code, as required by Section 1749. Additionally, any applicant for such a license holding one or more of the designations specified in subdivisions (a) to (e), inclusive, of Section 1749.4 shall be exempted from any requirement for courses in general insurance that would otherwise be a condition of issuance of the license. (f) An applicant for a fire and casualty broker-agent license who is licensed as a personal lines agent shall complete a minimum of 20 hours prelicensing classroom study as a prerequisite. The curriculum for satisfying this requirement shall be approved by the curriculum board and submitted to the commissioner for final approval. The applicant shall not be required to repeat any prelicensing requirements completed as a prerequisite to being licensed as a personal lines agent. SEC. 5. This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are: In order that the insurance licensure provisions of this act may take effect as soon as possible, it is necessary that this act take effect immediately.