This Bill by alicejenny


									                                  South Carolina General Assembly
                                      116th Session, 2005-2006

H. 3491


General Bill
Sponsors: Reps. Cato, E.H. Pitts and Tripp
Document Path: l:\council\bills\dka\3060dw05.doc

Introduced in the House on February 9, 2005
Currently residing in the House Committee on Labor, Commerce and Industry

Summary: Criteria for licensing insurance adjusters


    Date   Body Action Description with journal page number
  2/9/2005 House Introduced and read first time HJ-6
  2/9/2005 House Referred to Committee on Labor, Commerce and Industry HJ-6


 9                                A BILL
25   Be it enacted by the General Assembly of the State of South
26   Carolina:
28   SECTION 1. Chapter 47, Title 38 of the 1976 Code is amended to
29   read:
31                             “CHAPTER 47
33                           Insurance Adjusters
35      Section 38-47-10. (A) Every Each individual commonly called
36   an ‘adjuster’, adjusting losses for an insurer licensed to do business
37   in this State who determines the extent of insured losses and assists
38   in settling or attempts to settle claims on behalf of an admitted or
39   approved insurer, must be licensed by the director or his designee,
40   and declare under penalty of refusal, suspension, or revocation of
41   the license that the statements made in the application are true,
42   correct, and complete to the best of the individual’s knowledge and

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 1   belief. These individuals shall apply for a license on a form
 2   prescribed by the director or his designee. The director or his
 3   designee shall satisfy himself that each applicant for an adjuster’s
 4   license is an individual of good moral character, has sufficient
 5   knowledge of the insurance business and his duties as an adjuster,
 6   has not violated the insurance laws of the State, and is a fit and
 7   proper individual for the position. No A license may not be issued
 8   to a nonresident adjuster who resides in a state refusing to license a
 9   South Carolina adjusters adjuster.
10      (B)(1) Before approving an application, the director or his
11   designee shall find that the individual:
12           (a) is at least eighteen years of age;
13           (b) has not committed any act that is a ground for denial,
14   suspension, or revocation pursuant to Section 38-47-80;
15           (c) has paid the fees pursuant to Section 38-47-30; and
16           (d) has successfully passed the examination or
17   examinations for the line or lines of insurance for which the person
18   has applied. The director or his designee may waive the
19   examination with respect to an applicant who has achieved the
20   designation of Chartered Property Casualty Underwriter (CPCU),
21   Certified Insurance Consultant (CIC).
22        (2) The director or his designee may require any document
23   necessary to verify the information contained in an application.
24      (C) Agents An agent licensed under pursuant to Chapter 43 are
25   is not required to comply with this section.
26      (D) A nonlicensed individual entering the State for the purpose
27   of adjusting claims on behalf of a licensed or approved insurer in
28   response to a catastrophic event, must be approved by the director
29   or his designee. As determined by the director, an administrative
30   fee may be charged and retained by the department for
31   administration of each catastrophic event.
33     Section 38-47-15. When If an individual applies for an
34   adjuster’s license he shall supply the department his business
35   mailing and residence address. The adjuster shall notify the
36   department within thirty days of any change in these addresses.
37   Failure to inform the director or his designee of a change in legal
38   name or address within this period shall result in a penalty
39   pursuant to Section 38-2-10.
41      Section 38-47-20. The director or his designee may enter into
42   reciprocal agreements with the insurance commissioners of other
43   states in regard to licensing of a nonresident adjusters adjuster if in

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 1   his judgment such the arrangements or agreements are in the best
 2   interest of the State and if the applicant for an adjuster’s license
 3   meets the minimum statutory requirements of this State for the
 4   issuance of a license. However, notwithstanding the provisions of
 5   Section 38-47-10, the director or his designee may not enter into or
 6   continue any reciprocal agreement unless the other state is just as
 7   liberal as this State in licensing a nonresident adjusters adjuster.
 9      Section 38-47-30. The biennial fee for an adjuster’s license,
10   unless changed by an administrative order of the director, is eighty
11   dollars payable in advance and fully earned when received, not
12   refundable, transferable, nor proratable. However, when the laws
13   of another state of the United States require a South Carolina
14   adjusters adjuster to pay a license fee greater than the fee required
15   in this State of a nonresident adjusters adjuster, the nonresident
16   adjuster shall pay an amount equal to the amount of charges
17   imposed by the laws of his state upon an adjusters adjuster of this
18   State.
20      Section 38-47-40. An adjuster’s license is for an indefinite term
21   unless sooner revoked or suspended if the biennial license fee is
22   paid at the time and in the manner which the department provides
23   by regulation and the provisions of Section 38-47-45 have been
24   met. If the license fee for an adjuster is not received when due, the
25   license must be canceled may be suspended. If the license is to be
26   reinstated, an original application must be filed and after
27   suspension, a reinstatement fee equal to the biennial license fee
28   unpaid must be paid in addition to the regular biennial license fee.
29   If compliance for suspension reinstatement is not met within a
30   sixty-day period immediately following the license suspension
31   deadline, the adjuster’s license must be canceled and remains
32   canceled until that time as an original application has been filed
33   and the state adjuster licensing examination has been taken and
34   passed with a minimum score of seventy.
36      Section 38-47-45. (A) A person licensed pursuant to the
37   provisions of this chapter shall comply with the provisions of
38   Section 38-43-106, with certain exceptions:
39        (1) Licensed adjusters are required to complete biennially a
40   minimum of fourteen hours of continuing insurance education in
41   order to be eligible for licensure for the following two years. At
42   least two of the fourteen required continuing insurance education

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 1   hours must be in courses involving ethics or professional
 2   responsibility, or both.
 3        (2) A licensed adjuster shall provide evidence of his
 4   continuing insurance education status and pay a continuing
 5   education recordkeeping fee to the continuing education
 6   administrator by April first of the biennial compliance year unless
 7   granted an extension of time. Beginning March fifteenth of the
 8   compliance year, a licensed adjuster may request in writing a
 9   sixty-day extension to complete continuing education
10   requirements. The request must be received by the close of
11   business on April first of the compliance year. A licensed adjuster
12   who does not comply with continuing education requirements shall
13   have his license suspended on renewal. In order to reinstate his
14   license, within a sixty day period immediately following the
15   license suspension date, he shall complete three hours of
16   continuing education in addition to the fourteen hours required and
17   pay a reinstatement fee equal to the biennial license fee, in addition
18   to the regular biennial license fee. If continuing education
19   compliance is not met within the sixty-day period immediately
20   following the license suspension date, the adjuster’s license must
21   be canceled and remains canceled until that time as the state
22   adjuster licensing examination has been taken and passed with a
23   minimum score of seventy. However, if the reason for license
24   suspension is directly related to nonpayment of the biennial
25   continuing education fee, within the twelve-month period
26   immediately following the license suspension date, the adjuster
27   may reinstate his license by paying a penalty fee, not to exceed one
28   hundred fifty dollars to the department for administrative purposes.
29        (3) A maximum of six credit hours may be carried forward.
30        (4) In addition to the representatives on the Continuing
31   Education Advisory Committee, pursuant to Section
32   38-43-106(C)(2), the director may accept nominations for qualified
33   individuals from the South Carolina Claims Association, the
34   Claims Management Association of South Carolina, insurers that
35   are not members of any trade association, or another individual,
36   group, or professional association.
37        (5) A nonresident adjuster who successfully satisfied
38   continuing insurance education requirements of his resident state is
39   deemed to have met the continuing education requirements of this
40   section as long as certification is provided to the continuing
41   education administrator. However, a nonresident adjuster whose
42   home state does not have continuing education requirements is
43   required to meet the requirements of this section.

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 2        (6) A licensed adjuster with a minimum of twenty years of
 3   continuous licensure, or with twenty-five years of active licensure
 4   as an adjuster, is only required to take seven hours of continuing
 5   education credits biannually.
 6      (B)(1) The director or his designee shall administer these
 7   continuing education requirements and shall approve courses of
 8   instruction which qualify for these purposes. However, the director
 9   may enter into reciprocal agreements with the insurance
10   commissioners of other states regarding the approval of continuing
11   education courses if in his judgment the arrangements or
12   agreements are in the best interest of the State and if the courses
13   submitted meet the minimum statutory requirements of this State
14   for course approval.         In administering this program, the
15   department, in its discretion, may promulgate regulations where an
16   adjuster provides to a continuing education administrator
17   established within the department, proof of compliance with
18   continuing education requirements as a condition of license
19   renewal or, in the alternative, contract with an outside service
20   provider to provide recordkeeping services as the continuing
21   education administrator. The costs of the continuing education
22   administrator must be paid from the continuing insurance
23   education fees paid by an adjuster in the manner provided by this
24   section, except that course approval responsibilities may not be
25   designated to the continuing education administrator. The
26   continuing education administrator shall compile and maintain
27   records reflecting the continuing insurance education status of all
28   licensed or qualified adjusters subject to the requirements of this
29   section. The continuing education administrator shall furnish to
30   each adjuster, a report of the continuing insurance education status.
31        (2) The department may promulgate regulations prescribing
32   the overall parameters of continuing education requirements, and
33   these regulations authorize the director or his designee to recognize
34   product-specific training.
35      (C) An adjuster’s license is for an indefinite term unless
36   revoked or suspended as long as the provisions of Section
37   38-47-45 are met. A licensed insurance adjuster who is unable to
38   comply with license renewal procedures due to active military
39   service or some other extenuating circumstance such as a
40   long-term medical disability may request a waiver of these
41   requirements.

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 1     Section 38-47-50. Adjusters are An adjustor is declared to be
 2   acting as the agents an agent for the company or companies
 3   represented by them he represents in the adjustment of any loss.
 4   An adjuster licensed pursuant to this chapter is prohibited from
 5   performing any of the duties described pursuant to Chapter 48,
 6   Title 38.
 8      Section 38-47-60. (A) It is unlawful for a person to:
 9        (1) act as adjuster on a contract made other than as
10   authorized by the laws of this State or made by an insurer who is
11   not regularly licensed to do business in this State; or
12        (2) adjust or aid in the adjustment, either directly or
13   indirectly, of a claim arising under a contract of insurance not
14   authorized by the laws of this State.
15      (B) A person who violates the provisions of this section is
16   guilty of a misdemeanor and, upon conviction, must be fined in the
17   discretion of the court or imprisoned not more than two years, or
18   both.
20       Section 38-47-70. When If the director or his designee
21   determines after investigation that there has been a violation of this
22   title by an adjuster, upon ten days’ notice, he may impose the
23   penalties provided in Section 38-2-10.
25      Section 38-47-80. (A) The director or his designee may place
26   on probation, revoke, or suspend an adjuster’s license after ten
27   days’ notice or refuse to issue or reissue a license when an adjuster
28   has been convicted of a crime involving moral turpitude, financial
29   irresponsibility, or has violated the provisions of this title or a
30   regulation promulgated by the department or the insurance
31   department of another state.
32      (B) For purposes of this section, ‘convicted’ includes a plea of
33   guilty or a plea of nolo contendere, and the record of conviction, or
34   a copy of it, certified by the clerk of court or by the judge in whose
35   court the conviction occurred is conclusive evidence of the
36   conviction.
37      (C) Violation of regulations include, but are not limited to:
38        (1) violating a subpoena or an order of the director or of
39   another state’s director or his designee;
40        (2) obtaining or attempting to obtain a license through
41   misrepresentation or fraud, or improperly using notes or another
42   reference material to complete an examination for an insurance
43   license;

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 1        (3) forging another’s name to any document related to an
 2   insurance transaction;
 3        (4) failing to comply with an administrative or court order
 4   imposing a child support obligation; or
 5        (5) failing to pay state or federal income tax or comply with
 6   any administrative or court order directing payment of state or
 7   federal income tax.
 8      (D) Upon investigation, the director or his designee finds that
 9   an adjuster has obtained a license by fraud or misrepresentation, he
10   may revoke or suspend immediately the license. The director or his
11   designee, in an order suspending a license, shall specify the period
12   during which the suspension is to be in effect. The period may not
13   exceed two years. A licensee whose license has been revoked or an
14   applicant who has been refused a license by the director or his
15   designee, may not reapply for a license until a two-year period of
16   time has lapsed from the effective date of the revocation or refusal.
17   If judicial review before the Administrative Law Judge Division
18   for revocation is sought, then the two years applies from the date
19   of a final court order or decree affirming the revocation or
20   suspension.
21      (E) If, after notice of a hearing before the Administrative Law
22   Judge Division or notice of an opportunity for hearing before the
23   Administrative Law Judge Division, the director or his designee
24   finds that one or more grounds exist for the revocation or
25   suspension of, or the refusal to issue or reissue a license, the
26   director or his designee, in his discretion, instead of revocation,
27   suspension, or refusal, may impose upon the adjuster or applicant
28   an administrative penalty as provided in Section 38-2-10 for each
29   offense.
30      (F) The director or his designee may allow the adjuster or
31   applicant a reasonable period, not to exceed thirty days, within
32   which to pay to the director or his designee the amount of the
33   penalty imposed. If the adjuster or applicant fails to pay the
34   penalty in its entirety to the director or his designee at his office in
35   Columbia within the period allowed, the license or application
36   stands revoked, suspended, or renewal refused, as the case may be,
37   upon expiration of the period and without any further proceedings.
38      (G) If the director or his designee fails to renew or denies an
39   application for a license, the director or his designee shall notify
40   the applicant or licensee and advise, in writing, the applicant or
41   licensee of the reason for the denial or nonrenewal of the
42   applicant’s or licensee’s license. The applicant or licensee may
43   make written demand upon the administrative law judge within

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 1   thirty days for a hearing before the administrative law judge to
 2   determine the reasonableness of the director or his designee’s
 3   action. The hearing must be held pursuant to the Administrative
 4   Procedures Act.
 5      (H) In addition to or instead of any applicable denial, probation,
 6   suspension, or revocation of a license, a person violating the
 7   provisions of this title, after a hearing, may be subject to an
 8   administrative penalty pursuant to the provisions of Section
 9   38-2-10.
10      (I) The director shall retain the authority to enforce the
11   provisions of and impose any penalty or remedy authorized by this
12   chapter and title against a person who is under investigation for or
13   charged with a violation of this title even if the person’s license or
14   registration has been surrendered or has lapsed by operation of
15   law.”
17   SECTION 2. Upon approval by the Governor, the act takes effect
18   April 1, 2007.
19                          ----XX----

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