Licensing Modernization Act Advances
Last night, the House Commerce Committee adopted a bill sponsored by the Minnesota Department of Commerce that modernizes and reforms our state's insurance producer licensing system. The Department's goal is to make our state licensing system more compatible to other states thereby negating the need for federal regulation of insurance licensing. The Department bill is based upon a model law developed by the National Association of Insurance Commissioners. I testified at the hearing indicating MIIAB's support for this effort.
One of the major provisions of the bill would change the licensing cycle. Under the current system, all agent renewals are up in October. The department is proposing spreading license renewal throughout the year. They would require agents to renew their license during the month of their birth. Agents would still obtain a two year license and renew their license every other year. Having a set month would make it easier to for agents to renew licenses in each state in which they are licensed, hopefully all over the Internet. The new license cycle would be phased in over the next two years beginning in 2010.
The Department's licensing bill would reduce the required number of continuing education credits needed for license renewal from 30 hours to 24 hours. This makes Minnesota more consistent with other state CE requirements which are apparently less than ours.
Restrictions on continuing education would also be changed. The limitation on internet based and distance learning hours would be removed. Currently law limits one-half of education to Internet based coursework. However, the limitation on company sponsored courses would continue. Agents could only get one-half of the required continuing education from insurance companies. Course sponsored by a bona fide trade associations, such as MIIAB, would not be considered company courses.
Applicants for agent licenses would no longer be restricted in taking pre-license education in a classroom. Pre-license education could be obtained through the Internet. The licensing examination could be taken over the Internet. This should greatly assist the licensing of new agents especially in greater Minnesota.
At MIIAB's request the department would establish a new category of continuing education provider called a "qualified provider". A qualified provider would be able to provide Minnesota continuing education without having to gain department approval for each course they offer. Courses would be deemed to impart substantive and procedural knowledge of the insurance field. Qualified providers could be audited by the department to assure compliance with state rules and regulation.
The bill is awaiting action in the Senate Commerce Committee next week. Assuming this legislation passes this year, we will work with the Department of Commerce to help inform and educate insurance agents about the new licensing rules and regulations.
