Insurance

Administration

Rule R590-244: Individual and Agency Licensing Requirements

Effective Date: 04/07/2023

Admin. Code Reference: R590-244

Rule Type: Current Rule

R590. Insurance, Administration.

R590-244. Individual and Agency Licensing Requirements.

R590-244-1. Authority.

This rule is promulgated by the commissioner pursuant to:

(1) Section 31A-2-201;

(2) Section 31A-23a-102;

(3) Section 31A-23a-108;

(4) Section 31A-23a-111;

(5) Section 31A-23a-115;

(6) Section 31A-23a-203.5;

(7) Section 31A-23a-302;

(8) Section 31A-23b-102;

(9) Section 31A-23b-205;

(10) Section 31A-23b-207;

(11) Section 31A-23b-209;

(12) Section 31A-23b-401;

(13) Section 31A-25-201;

(14) Section 31A-25-208;

(15) Section 31A-26-207;

(16) Section 31A-26-210;

(17) Section 31A-26-213;

(18) Section 31A-35-104;

(19) Section 31A-35-301;

(20) Section 31A-35-401; and

(21) Section 31A-35-406.

R590-244-2. Purpose and Scope.

(1) The purpose of this rule is to provide standards for:

(a) an individual or agency licensee for:

(i) obtaining, renewing, or reinstating a license;

(ii) maintaining any legal liability coverage or surety bond requirements; and

(iii) making other miscellaneous license amendments;

(b) an insurer for the initial appointment or the termination of an appointment of an individual or agency licensee; and

(c) an agency for the initial designation or the termination of a designation of an individual licensee to the agency's license.

(2) This rule applies to:

(a) an individual or agency licensed under:

(i) Title 31A, Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and Reinsurance Intermediaries;

(ii) Title 31A, Chapter 23b, Navigator License Act;

(iii) Title 31A, Chapter 25, Third Party Administrators;

(iv) Title 31A, Chapter 26, Insurance Adjusters; and

(v) Title 31A, Chapter 35, Bail Bond Act; and

(b) an admitted insurer doing business in Utah.

R590-244-3. Definitions.

Terms used in this rule are defined in Sections 31A-1-301, 31A-23a-102, 31A-23b-102, 31A-26-102, and 31A-35-102. Additional terms are defined as follows:

(1) "Active license" means authorization by the commissioner to engage in an activity that is part of or related to the insurance business.

(2) "Inactive license" means a licensee is no longer authorized by the commissioner to engage in an activity that is part of or related to the insurance business.

(3) "Lapse" means the inactivation of an active license by expiration of the period for which the license was issued or by operation of law.

(4) "License application" means information submitted by a license applicant that is used by the commissioner to evaluate the applicant's qualifications and decide whether to:

(a) issue or decline to issue a license;

(b) add or decline to add an additional line of authority to an active license;

(d) reinstate or decline to reinstate an inactive license.

(5) "License type" means a category of license identifying a specific functional area of insurance activity for which the commissioner may grant authority to do business.

(6) "Line of authority" means a line of insurance in a particular subject matter area within a license type for which the commissioner may grant authority to do business.

(7) "NIPR" means an electronic application software provided by the National Insurance Producer Registry.

(8) "Reinstate" means the activation of an inactive license within 365 days of the inactivation date.

(9) "Renewal" means the continuation of an active license from one two-year licensing period to another, except that the licensing period for a bail bond agency is one year.

(10) "Resident," for the purpose of a resident insurance license, means a person claims this state as the person's home state in which the person:

(a) maintains the person's principal place of business or residence; and

(b) is licensed to do insurance business.

(11) "Sircon" means an electronic application software provided by Vertafore or its acquiring parent company.

(12) "Termination for cause" means:

(a) an insurer or an agency has ended its relationship with a licensee or has cancelled the licensee's authority to act on behalf of the insurer or agency for one of the reasons identified in Subsection 31A-23a-111(5); or

(b) a licensee has been found to have engaged in any of the activities identified in Subsection 31A-23a-111(5), 31A-23b-401(4), or 31A-26-213(5), by a court, government body, or self-regulatory organization authorized by law.

R590-244-4. Requirement to Electronically Submit a License Application, Appointment, Designation, or License Amendment.

(1) Except as otherwise provided in this rule, the following shall be submitted electronically to the department using SIRCON or NIPR:

(a) an individual or agency license application for a person listed in Subsection R590-244-2(a) as prescribed in Sections R590-244-7, R590-244-9, and R590-244-10 for:

(i) a new license;

(ii) an additional license type or line of authority;

(iii) a license renewal; or

(iv) a license reinstatement;

(b) an appointment, termination of appointment, designation, or termination of designation as prescribed in Sections R590-244-11 and R590-244-12;

(c) a miscellaneous license amendment pertaining to an individual or agency license for a person listed in Subsection R590-244-2(a) as prescribed in Section R590-244-13;

(d) any document related to reporting to the commissioner of criminal prosecution or administrative action taken against a licensee as required under:

(i) Title 31A, Chapter 23a, Insurance Marketing - Licensing Procedures, Consultants, and Reinsurance Intermediaries;

(ii) Title 31A, Chapter 23b, Navigator License Act;

(iii) Title 31A, Chapter 25, Third Party Administrator;

(iv) Title 31A, Chapter 26, Insurance Adjusters; or

(v) Title 31A, Chapter 35, Bail Bond Act; and

(e) any additional documentation required in connection with an application, except as shown in Subsection (1)(e)(iv), including:

(i) written explanation and documentation for positive responses to background questions;

(ii) evidence of specific experience, bonding, or other requirements for certain license types or lines of authority; or

(iii) evidence of continuing education requirements for a renewal or reinstatement application if there is a question regarding the number of course hours completed.

(iv) If an electronic attachment function for attaching a document required with an application is not available in the attachment utility from Sircon or NIPR, the document shall be submitted electronically via facsimile or as a PDF attachment to an email, until an electronic attachment function for submitting the document in connection with the application becomes available from Sircon or NIPR.

(2) Submission of an electronic application or other form under this rule constitutes the applicant's or submitter's attestation under penalties of perjury that the information contained in the application or form is true and correct.

(3) A submission that does not comply with this rule, including an application that remains incomplete for a period of 30 days following the initial submission, may be rejected as incomplete and returned to the submitter without being processed, with any paid fees forfeited to the state.

R590-244-5. Requirement of an Active License to Sell, Solicit, or Negotiate Insurance.

(1) To sell, solicit, or negotiate insurance, a person shall have an active license matching the type and line of insurance being sold, solicited, or negotiated.

(2) If the person is an agency, the person shall have an appointment from an insurer in addition to an active license described in Subsection (1).

(3)(a) If the person is an individual, the person shall have an appointment from an insurer or a designation from an agency in addition to an active license described in Subsection (1).

(b) An individual licensed as a resident producer shall maintain legal liability errors and omissions insurance coverage not less than $250,000 per claim and $500,000 annual aggregate limit.

(4) A licensee whose license is inactive may not sell, solicit, or negotiate insurance from the date the active license is inactivated until the date the inactive license is reactivated.

R590-244-6. Requirement of an Active License to Act as a Navigator.

(1) A person shall have the following to act as a navigator:

(a)(i) an active navigator license issued under Chapter 31A-23b, Navigator License Act, or

(ii) an active producer license issued under Chapter 31A-23a, Insurance Marketing - Licensing Producers, Consultants, and Reinsurance Intermediaries, with an accident and health line of authority; and

(b)(i) a surety bond not less than $50,000 to cover the legal liability of the navigator as the result of an erroneous act or failure to act in the navigator's capacity as a navigator, as applicable; or

(ii) legal liability errors and omissions insurance coverage not less than $250,000 per claim and $500,000 annual aggregate limit, as applicable.

(2) A professional liability coverage plan is a form of errors and omissions insurance coverage.

(3) A navigator whose license is inactive may not act as a navigator from the date the active license is inactivated until the date the inactive license is reactivated.

(4) A navigator license includes the following lines of authority:

(a) navigator; and

(b) certified application counselor.

R590-244-7. New License Application.

A resident or non-resident license application for a new license, or for the addition of an additional license type or line of authority, shall be submitted using either Sircon or NIPR, except:

(1) an application for a navigator license shall be submitted using Sircon; and

(2) a non-resident license application for a license type or line of authority not offered in the person's home state shall be submitted to the commissioner via facsimile or as a PDF attachment to an email using a form available through the department's website, https://insurance.utah.gov, until an electronic application becomes available from Sircon or NIPR.

R590-244-8. Examination and Training.

(1) Examination and training requirements may be administered by:

(a) the commissioner;

(b) a testing vendor approved and contracted by the commissioner; or

(2) To act as a navigator in Utah, a person shall successfully complete the federal navigator training and certification program requirements under PPACA and administered through the United States Department of Health and Human Services, including any applicable training, examination, certification or recertification requirements.

(3) A person who has successfully completed the federal navigator training and certification has successfully completed the required Utah training and examination requirements for a navigator license.

R590-244-9. Renewal and Non-renewal of an Active License.

(1) An active license shall be renewed on or before the license expiration date by submitting a resident or non-resident license renewal application online via Sircon or NIPR.

(2) A new individual license expires on the last day of the licensee's birth month following the two-year anniversary of the license issue date, unless renewed, except as shown in Subsection (4).

(3) A renewed individual license expires on the last day of the licensee's birth month every two years, unless renewed, except as shown in Subsection (4).

(4) An individual navigator license expires annually on the last day of the month from the most recent license issue or renewal date, unless renewed.

(5) An agency license expires on the last day of the month every two years from the most recent license issue or renewal date, unless renewed, except as shown in Subsection (6).

(6) A bail bond agency license expires annually on August 14, unless renewed.

(7) Renewal Notice.

(a) Before the license expiration date, the commissioner may, as a courtesy, send a renewal notice to the licensee's business email address as shown on the records of the department.

(b) A renewal notice sent by the commissioner to the business email address, as shown on the records of the department, shall be considered received by the licensee.

(8) A license shall non-renew effective the license expiration date if it is not renewed on or before the expiration date, and:

(a) the non-renewed license shall be inactivated;

(b) all agency designations and insurer appointments shall be terminated; and

(9) An active licensee that fails to renew a license shall not engage in the business of insurance during the period of time from the expiration date of the license until the date the inactive license is reinstated or a new license is issued.

R590-244-10. Reinstatement of Inactive License.

(1) A license that has been inactive for a period of one year or less following the license expiration date may be reinstated under the relevant provisions of this section.

(2) An inactive license that has not been reinstated within one year following its expiration date may not be reinstated and the inactive licensee may apply as a new license applicant.

(3) A reinstatement applicant shall:

(a) comply with each requirement for renewal of a license, including any applicable continuing education or examination requirements if the reinstatement applicant is an individual; and

(b) pay a reinstatement fee.

(4) A resident or non-resident license application for reinstatement of an inactive license shall be submitted using either Sircon or NIPR, except as stated in Subsection (5).

(5)(a) The following license applications for reinstatement of an inactive license shall be submitted to the department via facsimile or as a PDF attachment to an email using a form available through the department's website, until such time that an electronic application becomes available from Sircon or NIPR:

(i) a non-resident reinstatement application for a person whose license is inactive for failure to maintain an active license in the person's home state;

(ii) a resident or non-resident reinstatement application for a person whose license has been voluntarily surrendered; and

(iii) a resident or non-resident reinstatement application for a person whose license is inactive due to an incomplete renewal application, except as stated in Subsection (5)(b).

(b) If a resident license is inactive due to a renewal application that was incomplete solely for failure to meet the continuing education requirements, a resident reinstatement application shall be submitted to the department:

(i) during the first 30 days after a license expiration date as a facsimile or as a PDF attachment to an email using a form available through the department's website; or

(ii) 31 days to one year after a license expiration date through Sircon or NIPR.

(6) A license that is voluntarily surrendered:

(a) may be reinstated:

(i) during the license period in which the license was surrendered; and

(ii) no later than one year from the date the license was surrendered; and

(b) shall comply with the reinstatement requirements in Subsection (3), except that no continuing education requirement will apply for an individual license applicant because the reinstatement is within the current license period.

(7) A reinstated license expires on the same date it would have expired had the license not become inactive.

(8) A person with a reinstated license shall complete any required insurer contracts and appointments or agency designations before the reinstated licensee can resume doing business.

R590-244-11. Appointment and Termination of Appointment by an Insurer.

(1) Appointment.

(a) An insurer shall appoint an individual or agency licensee with whom the insurer has a producer contract.

(b) An appointment is continuous until terminated by the insurer or canceled by the department.

(d) To appoint, an insurer shall:

(i) state the date on which the appointment is effective; and

(ii) submit the appointment to the commissioner using Sircon or NIPR no later than 15 days after:

(A) the date on which the producer contract is executed; or

(B) the date on which the insurer receives the first insurance application from the licensee.

(2) Terminating an Appointment.

(a) An insurer shall terminate an appointment when a previously appointed individual or agency is no longer authorized to conduct business for the insurer in Utah.

(b) To terminate an appointment, an insurer shall:

(i) state the date on which the termination is effective; and

(ii) submit the termination to the commissioner using Sircon or NIPR no later than 30 days after the effective date of termination.

(c) Within 15 days after submitting a termination, an insurer shall notify the licensee of the termination and the reason for it by mail or email at the licensee's last known address or email address.

(3) Reporting Termination for Cause.

(a) An insurer that terminates an appointment for cause shall report to the commissioner the cause of termination if required by Subsection 31A-23a-115(3)(a).

(b) The report and attachments shall be submitted to licensing.uid@utah.gov within 15 days after submitting the notice of termination required by Subsection (2)(c).

(i) quote the specific reason or reasons from Subsection 31A-23a-111(5)(b);

(ii) state the specific facts and reasoning on which the decision to terminate was based;

(iii) list and include any document, photograph, video or audio recording, or other material that supports the insurer's decision to terminate;

(iv) include a copy of each written finding or conclusion by a court, government body, agency, or self-regulatory organization that supports the termination; and

(v) include a copy of the notice required by Subsection (2)(c).

R590-244-12. Designation and Termination of Designation by an Agency.

(1) Designation.

(a) An agency shall designate a licensed individual to the agency license to do business on behalf of the agency in Utah.

(b) A designation is continuous until terminated by the agency or canceled by the department.

(i) state the date on which the designation is effective; and

(ii) submit the designation to the commissioner using Sircon or NIPR no later than 15 days after the designation effective date.

(2) Terminating a Designation.

(a) An agency shall terminate a designation when a previously designated individual is no longer authorized to conduct business for the agency in Utah.

(b) To terminate a designation, an agency shall:

(i) state the date on which the termination is effective; and

(ii) submit the termination to the commissioner using Sircon or NIPR no later than 30 days after the termination effective date.

(c) Within 15 days after submitting a termination, an agency shall notify the licensee of the termination and the reason for it by mail or email at the licensee's last known address or email address.

(3) Reporting Termination for Cause.

(a) An agency that terminates a designation for cause shall report to the commissioner the cause of termination if required by Subsection 31A-23a-302(4).

(b) The report and attachments shall be submitted to licensing.uid@utah.gov within 15 days after submitting the notice of termination required by Subsection (2)(c).

(i) quote the specific reason or reasons from Subsection 31A-23a-111(5)(b);

(ii) state the specific facts and reasoning on which the decision to terminate was based;

(iii) list and include any document, photograph, video or audio recording, or any other material that supports the agency's decision to terminate;

(iv) include a copy of each written finding or conclusion by a court, government body, agency, or self-regulatory organization that supports the termination; and

(v) include a copy of the notice required by Subsection (2)(c).

R590-244-13. Miscellaneous License Amendments and Changes to an Agency's Employer Identification Number.

(1) A miscellaneous license amendment shall be submitted electronically.

(2) The following miscellaneous license amendments shall be submitted via Sircon or NIPR:

(a) a change of residence, business, or mailing address within the same state;

(b) a change of residence, business, or mailing address from one nonresident state to another nonresident state;

(d) a change of telephone number;

(e) a change of an individual licensee's name; or

(f) a change of the licensed individual designated as the person responsible for the regulatory compliance of the agency.

(3) The following miscellaneous license amendments shall be submitted electronically via facsimile or as a PDF attachment to an email, except that the license amendment identified in Subsection (3)(d) shall be submitted via Sircon or NIPR once the amendment becomes available electronically from Sircon or NIPR:

(a) a voluntary surrender of a license or line or authority;

(b) a clearance letter request;

(d) a change of an owner, partner, officer, or director of an agency.

(4) A submitted miscellaneous license amendment shall contain:

(a) the name and title of the individual submitting the amendment;

(b) the relationship to the licensee of the individual submitting the amendment; and

(c) the following attestation made by the individual submitting the amendment: "I hereby attest that the information submitted is true and correct, and that I am the individual licensee for whom the requested change is being submitted, or an authorized responsible representative of the individual or agency licensee for whom the requested change is being submitted."

(5) A change of Employer Identification Number:

(a) cannot be processed as a miscellaneous license amendment; and

(b) requires the entity to apply as a new license applicant.

R590-244-14. Severability.

If any provision of this rule, Rule R590-244, or its application to any person or situation is held invalid, such invalidity does not affect any other provision or application of this rule which can be given effect without the invalid provision or application. The remainder of this rule shall be given effect without the invalid provision or application.

KEY: insurance licensing requirements

Date of Last Change: April 7, 2023

Notice of Continuation: June 10, 2024

Authorizing, and Implemented or Interpreted Law: 31A-2-201; 31A-23a-102; 31A-23a-111; 31A-23a-115; 31A-23a-203.5; 31A-23a-302; 31A-23b-102; 31A-23b-205; 31A-23b-207; 31A-23b-209; 31A-23b-401; 31A-25-201; 31A-25-208; 31A-26-207; 31A-26-210; 31A-26-213; 31A-35-104; 31A-35-301; 31A-35-401; 31A-35-406