rulemaking hearing rule(s) filing form · 0780-01-56-.06 pre-licensing education reouirements...
TRANSCRIPT
Department of State Division of Publications 312 Rosa L. Parks Ave., 8th Floor, Snodgrass/TN Tower Nashville, TN 37243
For Department of State Use Only
Sequence Number:
Phone: 615-741-2650 Rule ID(s):
Email: publlcat [email protected] File Date: --------Effective Date: --------
Rulemaking Hearing Rule(s) Filing Form Rulemaking Hearing Rules are rules filed after and as a result of a rulemaking hearing (Tenn. Code Ann. § 4-5-205).
Pursuant to Tenn . Code Ann. § 4-5-229, any new fee or fee increase promulgated by state agency rule shall take effect on July 1, following the expiration of the ninety (90) day period as provided in § 4-5-207. This section shall not apply to rules that implement new fees or fee increases that are promulgated as emergency rules pursuant to § 4-5-20B(a) and to subsequent rules that make permanent such emergency rules, as amended during the rulemaking process. In addition, this section shall not apply to state agencies that did not, during the preceding two (2) fiscal years, collect fees in an amount sufficient to pay the cost of operating the board, commission or entity in accordance with § 4-29-121 (b) .
Agency/Board/Commission: Division:
Contact Person: Address:
Zip: Phone: Email:
• Tennessee Department of Commerce and Insurance Tennessee Insurance Division
. Jenny Taylor • 500 James Robertson Parkway, Nashville, Tennessee . 37243 . (615) 426-1084 . [email protected]
Revision Type (check all that apply): x Amendment
New __ Repeal
Rule(s) (ALL chapters and rules contained in filing must be listed here. If needed, copy and paste additional tables to accommodate multiple chapters. Please make sure that ALL new rule and repealed rule numbers are listed in the chart below. Please enter only ONE Rule Number/Rule Title per row.)
Chapter Number Chaoter Title 0780-01-56 Licensino Reouirements for Insurance Producers Rule Number Rule Title 0780-01-56-.06 Pre-Licensing Education Reouirements 0780-01-56-.08 Continuing Education
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6/12/20209/10/2020
06-18-209363
The rule corrects the amount of education hours a title insurance producer is required to have prior to initial licensure from five (5) hours to twenty (20) hours. T.C.A. § 56-6-106, the statute governing the initial licensure requirements for title insurance producers, was amended in 2014 to require twenty (20) hours of education hours for initial licensure. The rule is being amended in order to correctly reflect the language of the statute. Tenn. Code Ann. § 56-6-124(a) authorizes the Commissioner to promulgate reasonable regulations as are necessary or proper to carry out the purposes of T.C.A. § 56-6-101 et seq.
The rule amends continuing education requirements for renewals of licensed insurance agents. The rule permits a licensed insurance agent to receive two (2) general continuing education credit hours, which would be applied toward the twenty-four (24) hours that are required on a biennial basis for license renewal, based on membership in an insurance trade association and attendance at a national, statewide, or intrastate regional meeting in the previous year. Tenn. Code Ann. § 56-6-124(c) requires the Commissioner to promulgate continuing education requirements for individuals licensed under T.C.A. § 56-6-101 et seq.
Chapter 0780-01-56 Licensing Requirements for Insurance Producers
Amendments
Paragraph (3) of Rule 0780-01-56-.06 Pre-Licensing Education Requirements is deleted in its entirety and replaced with the following:
(3) The amounts of total hours which an insurance producer is required to take are listed as follows:
Lines of Insurance Title Life Accident and Health Property Casualty Personal Lines
Number of Hours 20 20 20 20 20 20
Authority: T.C.A. §§ 56-6-105, 56-6-106, 56-6-107, 56-6-109, 56-6-124, 56-32-114, 56-35-122 and 56-35-201 .
Rule 0780-01-56-.08(2) Continuing Education is amended by adding a new subparagraph (e) and relettering the subsequent subparagraphs accordingly, so that Rule 0780-1-56-.08(2) shall read as follows:
(2) Qualifying Programs.
(a) In order to qualify for credit towards satisfaction of the requirements of this Rule, an educational program must be a formal program of learning which contributes directly to the professional competence of the insurance producer and such program must meet the standards outlined for continuing educational programs.
(b) Formal programs requiring attendance may be considered for credit if:
1. A detailed outline is prepared and presented to the commissioner for approval;
2. The program is at least one (1) credit hour [fifty (50) minutes] in length; and
3. The program is conducted by a qualified instructor, discussion leader or lecturer.
(c) An instructor of a certified continuing education program shall receive continuing education credit. Credit for presenting a certified continuing education program will be awarded only for the first presentation, unless a program has been substantially revised since credit was last awarded. The amount of credit awarded shall be two (2) times the number of approved class hours for the program.
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(d) The list of subjects that will be acceptable for continuing education credits includes, but is not limited to the following:
1. Insurance, annuities, and risk management;
2. Insurance laws and regulations;
3. Mathematics, statistics, and probability;
4. Economics;
5. Business law;
6. Finance;
7. Taxes;
8. Business environment, management or organization; and
9. Subjects other than those listed above may be acceptable if the insurance producer can demonstrate that they contribute to professional competence and otherwise meet the standards set forth in this Rule. The responsibility for substantiating that a particular program meets the requirements of this Rule rests solely upon the insurance producer.
(e) A member of an insurance trade association shall receive two (2) general continuing education credit hours annually based on membership in an insurance trade association. A maximum of two (2) general continuing education credit hours, based on association membership, are allowed per year. The two (2) general continuing education credit hours are allowable if the insurance trade association:
1. Is approved as a continuing education provider as required by this rule;
2. Has been in existence for at least five (5) years;
3. Was formed for purposes other than providing continuing education;
4. Provides the commissioner with the association's Articles of Incorporation on file with the Tennessee Secretary of State;
5. Provides to the commissioner a certification that:
(i) Those members are active in the insurance trade association; and
(ii) Those members attended a national, statewide, or intrastate regional meeting in the previous year; and
6. Pays a course reporting fee of one dollar ($1.00) for each continuing education credit hour reported in accordance with the Department's or its designee's internet credit recording procedure.
(f) Subjects that will not be acceptable for continuing education credits include, but are not limited to the following:
1. Any course used to prepare for taking an insurance licensing examination;
2. Committee service in any professional organization;
3. Computer science courses;
4. Motivational, psychology, or sales training courses; and
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5. Securities courses, other than variable annuities.
(g) Continuing education programs which shall be deemed to meet the commissioner's standards, if properly submitted to the commissioner and approved, are:
1. Any part of the Life Underwriter Training Counsel Life Course Curriculum or Health Course;
2. Any part of the American College Life Underwriter Training Counsel Fellow (LUTFC) and Financial Services Specialist (FSS) designation curriculum;
3. Any part of the American College Chartered Life Underwriter (CLU), Chartered Financial Consultant (ChFC), Chartered Advisor for Senior Living (CASL), or Master of Science in Financial Services (MSFS) diploma curriculum;
4. Any part of the Insurance Institute of America's programs;
5. Any part of the American Institute for Property and Liability Underwriters Chartered Property Casualty Underwriter (CPCU) professional designation program;
6. Any part of the National Alliance for Insurance Education programs;
7. Any part of the American Land Title Association's, the Land Title lnstitute's, or the Tennessee Land Title Association's programs;
8. Any program relating to the field of real property law or title insurance law approved by the Committee on Continuing Legal Education of the Supreme Court of Tennessee;
9. Successful completion of any insurance related course approved by the commissioner and taught by an accredited college or university per credit hour granted;
10. Any part of the Tennessee Association of Health Underwriters' or the National Association of Health Underwriters' programs;
11. Any part of the Independent Insurance Agents of Tennessee's programs;
12. Any part of the National Association of Insurance and Financial Advisors (NAIFA) of Tennessee programs; and
13. Any part of the Professional Insurance Agents of Tennessee (PIA) programs.
(h) A producer may carry over a maximum of twelve (12) continuing education credit hours to the next renewal cycle for additional hours obtained during the biennium. However, carry over shall not apply to ethics continuing education credit requirements.
(i) Any correspondence or self-study program approved by the commissioner shall qualify for the equivalent number of classroom hours, provided that:
1. All correspondence or self-study programs shall include a final examination; and
2. Any provider of correspondence or self-study programs shall be the originally published provider or have the written authorization of the originally published provider to present such program.
U) All programs for continuing education must be submitted for approval on a form prescribed by the commissioner and submitted at least thirty (30) days prior to the program's presentation. In the event the provider does not know the specific content of
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the curriculum prior to program presentation due to the nature of the program, the provider may submit the course thirty (30) days after program presentation. However, the provider shall notify attendees and place prominently in all marketing materials that the continuing education course may or may not be approved for credit and that the approval may not occur until sixty (60) days after the course is taught. Any hours credited to a producer from a course approved after the course is given shall only be credited as of the day of the approval and not the day of the course's presentation.
(k) The commissioner specifically reserves the right to approve and disapprove credit for continuing education claimed under this Rule.
(I) The commissioner may require any original publisher or provider to submit all material to be used in the program to the commissioner for review.
(m) Any applicant who seeks approval as a provider of certified continuing education programs shall submit an application on a form prescribed by the commissioner with a non-refundable filing fee in the amount of five hundred ($500) dollars. All providers shall be required to annually renew their authority to provide certified continuing education programs on a form prescribed by the commissioner with a non-refundable filing fee in the amount of two hundred and fifty ($250) dollars. Any material change in or to a certified continuing education program shall require prior approval before an insurance producer may receive credit for such altered program. Program certification shall expire at such time as the commissioner may determine. State educational institutions are exempt from these filing fees, but must comply with all other requirements in order to obtain/maintain provider authority.
(n) All providers must maintain, for not less than four (4) years from the date the program was presented, a record of persons attending each program and upon completion of the program requirements, provide a certificate of completion with credit hours earned to each successful student. The certificate shall bear the provider's identification number as assigned by the commissioner upon the granting of authority to provide continuing education programs.
(o) Any insurance company, trade association, individual corporation, partnership, firm or agency that has been approved and been given authority by the commissioner to be a continuing education provider under this Rule shall meet the following continuing minimum operational standards:
1. A minimum of one (1) business office open to the public, with a minimum of one (1) telephone to be answered by an employee or voice message service, during normal business hours, equipped with the usual office equipment such as a desk, filing cabinets, typewriter/word processor/computer, supplies, and other similar items; and
2. Classroom(s) (not applicable to self-study programs) in compliance with the Americans with Disabilities Act (ADA), comprised of a room large enough to accommodate a minimum of ten (10) students with comfortable chairs and appropriate writing surfaces for each student and a chalk board or flip chart.
(p) Any individual or provider who violates the provisions of this Chapter shall be subject to disciplinary action and/or civil penalties pursuant to T. C. A. §§ 56-6-112 and 56-2-305.
Authority: T.C.A. §§ 56-2-305, 56-6-107, 56-6-112, 56-6-11 B(b), 56-6-124, 56-32-114, 56-35-122, 56-35-201, and 42 u.s.c. § 4011 (2004).
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* If a roll-call vote was necessary, the vote by the Agency on these rulemaking hearing rules was as follows:
Board Member Aye No Abstain Absent Signature (if required)
I certify that this is an accurate and complete copy of rulemaking hearing rules, lawfully promulgated and adopted by the Commissioner (board/commission/other authority) on 06/03/2020 (mm/dd/yyyy), and is in compliance with the provisions of T.C.A. § 4-5-222.
I further certify the following:
Notice of Rulemaking Hearing filed with the Department of State on: 12/19/2019
Rulemaking Hearing(s) Conducted on: (add more dates). 02/14/2020
Date: Jun 3, 2020 ---------- ------------
Signature: ,&,'""' ,.,.,.,,wn1
Name of Officer: Hodgen Mainda
Title of Officer: Commissioner
Agency/Board/Commission : Tennessee Department of Commerce and Insurance
Rule Chapter Number(s): 0780-01-56 __:....c....c...c__:.....;.......c....:.._ _ ___ _ ____________________ _
All rulemaking hearing rules provided for herein have been examined by the Attorney General and Reporter of the State of Tennessee and are approved as to legality pursuant to the provisions of the Administrative Procedures Act, Tennessee Code Annotated, Title 4, Chapter 5.
Department of State Use Only
Filed with the Department of State on:
Effective on:
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Herbe Attorney I and Reporter
Date
- ------ - - ------
---------------
Tre Hargett Secretary of State
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6/12/2020
9/10/2020
Public Hearing Comments
One copy of a document that satisfies T.C.A. § 4-5-222 must accompany the filing.
Jim Layman, Director of Government Relations for the lnsurors of Tennessee, appeared and showed support for the rule amendments. Mr. Layman submitted written comments to the rules prior to the hearing. The written comments were read aloud at the rulemaking hearing along with one (1) additional comment made at the hearing. The comments include the following:
Comment 1 0780-01-56-.08(2)(e)(5)
It was commented that there should be an addition of the word "and" at the end of 0780-01-56-.08(2)(e)(5) to clarify that an insurance trade association must meet all of the criteria found in (e)(1)-(6) in order for its members to receive continuing education credit hours.
Agency Response to Comment 1 The Department thanks Mr. Layman for his participation. The Department confirmed the error named in the comment which has been corrected for the final filing.
Comment 2 0780-01-56-.08(2)(e)(5)(i)
It was commented that the term "professional insurance association" used at 0780-01-56-.08(2)(e)(5)(i) should be changed to "insurance trade association" for consistency with other portions of the rule.
Agency Response to Comment 2 The Department thanks Mr. Layman for his participation. The Department agrees that the language should be changed for consistency and the changes have been made for the final filing.
Comment 3 0780-01-56-.08(2)(e)
It was commented that 0780-01-56-.08(2)(e) contains the phrase "two (2) general continuing education credits" and should be replaced with "two (2) general continuing education credit hours" for consistency with other portions of the rules.
Agency Response to Comment 3 The Department thanks Mr. Layman for his participation. The Department agrees that the language should be changed for consistency and the changes have been made for the final filing.
Comment4 0780-01-56-. 08(2)
It was commented that the first word of subparagraphs (e)(1)-(6) of 0780-01-56-.08(2) should be capitalized for consistency with other portions of the rule.
Agency Response to Comment 4 The Department thanks Mr. Layman for his participation. The Department agrees that the language should be changed for consistency and the changes have been made for the final filing
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Regulatory Flexibility Addendum
Regulatory Flexibility Analysis pursuant to T.C.A. § 4-5-402
1. The extent to which the rule may overlap, duplicate, or conflict with other federal, state, and local governmental rules.
It is not anticipated that the proposed rules will overlap or conflict with other federal, state, or local governmental rules. The rule changing the number of pre-licensing title insurance course education hours reflects the current Tennessee statute.
The Department modeled the continuing education rule permitting licensed insurance producers to earn two (2) general continuing education credit hours based on insurance trade association membership and attendance at a national, statewide, or intrastate regional meeting in the previous year after a similar North Carolina regulation.
2. Clarity, conciseness, and lack of ambiguity in the rule.
The proposed rules have been drafted to be clear, concise, and unambiguous.
3. The establishment of flexible compliance and reporting requirements for small businesses.
The proposed rules are not anticipated to alter the standard practices of reporting and recordkeeping currently utilized by small business. The rule regarding continuing education is allowing flexibility for licensed insurance producers to obtain continuing education by permitting credit based on insurance trade association membership and attendance at association meetings.
4. The establishment of friendly schedules or deadlines for compliance and reporting requirements for small businesses.
The proposed rules are not anticipated to establish unfriendly schedules or unreasonable deadlines for compliance and reporting requirements for small businesses. The rule regarding continuing education is providing additional methods for licensed insurance producers to meet the continuing education requirements for renewal.
5. The consolidation or simplification of compliance or reporting requirements for small businesses.
The proposed rules are not anticipated to alter the standard practices of reporting and recordkeeping currently utilized by small business. The association membership information will be reported in the same manner as general continuing education courses are currently reported.
6. The establishment of performance standards for small businesses as opposed to design or operational standards required in the proposed rule.
The proposed rules do not establish any performance standards for small businesses.
7. The unnecessary creation of entry barriers or other effects that stifle entrepreneurial activity, curb innovation, or increase costs.
These rules are not anticipated to create any unnecessary entry barriers or other effects that stifle entrepreneurial activity, curb innovation, or increase costs. The rule is allowing a less restrictive and less burdensome means for licensed insurance producers to obtain the continuing education requirements for renewal.
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Economic Impact Statement pursuant to T.C.A. § 4-5-403.
1. Types and estimated number of small businesses directly affected:
Small businesses operated by or employing licensed insurance producers will be affected by the promulgation of these rules by providing them the benefit of earning two (2) general continuing education credit hours based on membership in an insurance trade association and attendance of association meetings.
2. Projected reporting, recordkeeping, and other administrative costs:
There is no foreseeable alteration in existing reporting or recordkeeping utilized by small businesses that will result from the promulgation of these rules.
3. Probable effect on small businesses:
Small businesses operated by or employing licensed insurance producers will be affected by the promulgation of these rules by providing them the benefit of earning two (2) general continuing education credit hours based on membership in an insurance trade association and attendance of association meetings.
4. Less burdensome, intrusive, or costly alternative methods:
In this instance, the rule is allowing a less restrictive and less burdensome means for licensed insurance producers to obtain the continuing education requirements for renewal.
5. Comparison with federal and state counterparts:
There are no federal counterparts to the rule. Multiple state counterparts in the southeast have similar regulations permitting general continuing education credit hours based on membership in an insurance trade association and attendance of association meetings.
6. Effect of possible exemption of small businesses:
An exemption from the rule would not benefit small businesses because the rule is allowing a less restrictive and less burdensome means for licensed insurance producers to obtain the continuing education requirements for renewal.
Impact on Local Governments
Pursuant to T.C.A. §§ 4-5-220 and 4-5-228 "any rule proposed to be promulgated shall state in a simple declarative sentence, without additional comments on the merits of the policy of the rules or regulation, whether the rule or regulation may have a projected impact on local governments." (See Public Chapter Number 1070 (http://publlcalions.tnsosflles.com/acts/'I 06/pub/pc1070.pdf) of the 2010 Session of the General Assembly.)
The rules will not impact local governments.
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Additional Information Required by Joint Government Operations Committee
All agencies, upon filing a rule, must also submit the following pursuant to T.C.A. § 4-5-226(i)(1).
(A) A brief summary of the rule and a description of all relevant changes in previous regulations effectuated by such rule;
The rule amends Tenn. Comp. R. & Regs. 0780-01-56-.06(3) [Pre-Licensing Education Requirements] by correcting the number of education hours from five (5) hours to twenty (20) hours, which a title insurance producer is required to have for purposes of initial licensure. T.C.A. § 56-6-106, the statute governing the initial licensure requirements for title insurance producers, was amended in 2014 to require twenty (20) hours of education for title insurance producers for initial licensure, but the rule was never updated to reflect this change. Since the statute was amended in 2014, the Insurance Division has enforced the language of the statute requiring title insurance producers to have twenty (20) education hours prior to initial licensure. The rule is being amended in order to reflect the language of the state statute.
The rule also amends Tenn. Comp. R. & Regs. 0780-01-56-.08(2) [Continuing Education; Qualifying Programs] by adding a new subparagraph (e). The new subparagraph permits a licensed agent to receive two (2) general continuing education credit hours to be applied toward the twenty-four (24) hours that are required on a biennial basis for license renewal, based on membership in an insurance trade association and attending a national, statewide, or intrastate regional meeting in the previous year. A maximum of two (2) general continuing education credit hours, based on association membership, will be allowed per year. In order to qualify, the insurance trade association must: be approved as a continuing education provider as required by this rule; have been in existence for at least five (5) years; have been formed for purposes other than providing continuing education; and, provide the Commissioner with a copy of the association's Articles of Incorporation on file with the Tennessee Secretary of State. The insurance trade association shall pay a course reporting fee of one dollar ($1.00) each year that a licensed agent's membership is reported for purposes of receiving continuing education credit. Currently, there is a one dollar ($1.00) fee for each continuing education credit hour reported, and membership status will be reported in the same wav.
(B) A citation to and brief description of any federal law or regulation or any state law or regulation mandating promulgation of such rule or establishing guidelines relevant thereto;
Tenn. Code Ann. § 56-6-124(a) authorizes the Commissioner to promulgate reasonable regulations as are necessary or proper to carry out the purposes of T.C.A. § 56-6-101 et seq.
Tenn. Code Ann.§ 56-6-124(c) requires the Commissioner to promulgate continuing education requirements for individuals licensed under T.C.A. !S 56-6-101 et sea.
(C) Identification of persons, organizations, corporations or governmental entities most directly affected by this rule, and whether those persons, organizations, corporations or governmental entities urge adoption or rejection of this rule;
This rule affects those seeking to be insurance producers and current licensed insurance producers. The amendment regarding continuing education credit affects individuals seeking biennial renewal of an insurance producer license. Insurance trade associations are also affected by the rule, as they will have to follow the requirements as stated in the rule in order to effectuate their members earning two (2) general continuing education credit hours based on membership and attending a trade association meeting.
It is likely that all persons engaged in the insurance industry will be proponents of the amendment to the rule related to pre-licensing course hours as the amendment ensures that the regulation accurately reflects the statutory language. The Insurers of Tennessee and National Association of Insurance and Financial Advisors support the rule allowing for association membership to be counted towards continuing education requirements.
(D) Identification of any opinions of the attorney general and reporter or any judicial ruling that directly relates to the rule or the necessity to promulgate the rule;
None.
(E) An estimate of the probable increase or decrease in state and local government revenues and expenditures, if any, resulting from the promulgation of this rule, and assumptions and reasoning upon which the estimate
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is based. An agency shall not state that the fiscal impact is minimal if the fiscal impact is more than two percent (2%) of the agency's annual budget or five hundred thousand dollars ($500,000), whichever is less;
Minimal. In order for an insurance producer to receive the continuing education credit based on membership and attendance at a national, statewide, or intrastate regional meeting in the previous year, the insurance trade association must report the membership using the same online method 'in which attendance at standard continuing education courses are reported. The insurance trade association shall pay a course reporting fee of one dollar ($1.00) per member each year that a licensed agent's membership is reported for purposes of receiving continuing education credit. Currently, there is a one dollar ($1.00) fee for each continuing education credit hour reported, and membership status will be reported in the same way. This one dollar ($1.00) fee is paid to a third-party contractor that handles all aspects of online licensing and renewals for the Insurance Division of the Department. The Department does not expect any additional revenue as the membership status will be reported with the same fee as required with all other reporting of continuing education and the proposed rules do not increase the number hours required, but provides another method to obtain continuing education hours.
(F) Identification of the appropriate agency representative or representatives, possessing substantial knowledge and understanding of the rule;
Rachel Jrade-Rice, Assistant Commissioner for Insurance Kimberl Bi s, Director, A ent Licensin Section
(G) Identification of the appropriate agency representative or representatives who will explain the rule at a scheduled meeting of the committees;
Rachel Jrade-Rice, Assistant Commissioner for Insurance Kimberly Biggs, Director, Agent Licensing Section Jenny Taylor, Associate General Counsel and Suoervisino Attornev for Insurance
(H) Office address, telephone number, and email address of the agency representative or representatives who will explain the rule at a scheduled meeting of the committees; and
500 James Robertson Parkway Nashville, TN 37243
[email protected] (615) 7 41-3450 [email protected] (615) 741-2693 Jenn .Ta lor tn. ov 615 741-2325
(I) Any additional information relevant to the rule proposed for continuation that the committee requests.
N/A
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Department of State Division of Publications 312 Rosa L. Parks Ave., 8th Floor, Snodgrass/TN Tower Nashville, TN 37243 Phone: 615-741-2650 Email: [email protected]
For Department of State Use Only
Sequence Number: Rule ID(s): File Date:
Effective Date:
REDLINE Rulemaking Hearing Rule(s) Filing Form Rulemaking Hearing Rules are rules filed after and as a result of a rulemaking hearing (Tenn. Code Ann. § 4-5-205). Pursuant to Tenn. Code Ann. § 4-5-229, any new fee or fee increase promulgated by state agency rule shall take effect on July 1, following the expiration of the ninety (90) day period as provided in § 4-5-207. This section shall not apply to rules that implement new fees or fee increases that are promulgated as emergency rules pursuant to § 4-5-208(a) and to subsequent rules that make permanent such emergency rules, as amended during the rulemaking process. In addition, this section shall not apply to state agencies that did not, during the preceding two (2) fiscal years, collect fees in an amount sufficient to pay the cost of operating the board, commission or entity in accordance with § 4-29-121(b). Agency/Board/Commission: Tennessee Department of Commerce and Insurance
Division: Tennessee Insurance Division Contact Person: Jenny Taylor
Address: 500 James Robertson Parkway, Nashville, Tennessee Zip: 37243
Phone: (615) 426-1084 Email: [email protected]
Revision Type (check all that apply): x Amendment New Repeal
Rule(s) (ALL chapters and rules contained in filing must be listed here. If needed, copy and paste additional tables to accommodate multiple chapters. Please make sure that ALL new rule and repealed rule numbers are listed in the chart below. Please enter only ONE Rule Number/Rule Title per row.) Chapter Number Chapter Title 0780-01-56 Licensing Requirements for Insurance Producers Rule Number Rule Title 0780-01-56-.06 Pre-Licensing Education Requirements 0780-01-56-.08 Continuing Education
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The rule corrects the amount of education hours a title insurance producer is required to have prior to initial licensure from five (5) hours to twenty (20) hours. T.C.A. § 56-6-106, the statute governing the initial licensure requirements for title insurance producers, was amended in 2014 to require twenty (20) hours of education hours for initial licensure. The rule is being amended in order to correctly reflect the language of the statute. Tenn. Code Ann. § 56-6-124(a) authorizes the Commissioner to promulgate reasonable regulations as are necessary or proper to carry out the purposes of T.C.A. § 56-6-101 et seq. The rule amends continuing education requirements for renewals of licensed insurance agents. The rule permits a licensed insurance agent to receive two (2) general continuing education credit hours, which would be applied toward the twenty-four (24) hours that are required on a biennial basis for license renewal, based on membership in an insurance trade association and attendance at a national, statewide, or intrastate regional meeting in the previous year. Tenn. Code Ann. § 56-6-124(c) requires the Commissioner to promulgate continuing education requirements for individuals licensed under T.C.A. § 56-6-101 et seq.
Chapter 0780-01-56 Licensing Requirements for Insurance Producers
Amendments
Paragraph (3) of Rule 0780-01-56-.06 Pre-Licensing Education Requirements is deleted in its entirety and replaced with the following:
(3) The amounts of total hours which an insurance producer is required to take are listed as follows:
Lines of Insurance Number of Hours Title 520 Life 20 Accident and Health 20 Property 20 Casualty 20 Personal Lines 20
Authority: T.C.A. §§ 56-6-105, 56-6-106, 56-6-107, 56-6-109, 56-6-124, 56-32-114, 56-35-122 and 56-35-201. Rule 0780-01-56-.08(2) Continuing Education is amended by adding a new subparagraph (e) and relettering the subsequent subparagraphs accordingly, so that Rule 0780-1-56-.08(2) shall read as follows:
(2) Qualifying Programs.
(a) In order to qualify for credit towards satisfaction of the requirements of this Rule, an
educational program must be a formal program of learning which contributes directly to the professional competence of the insurance producer and such program must meet the standards outlined for continuing educational programs.
(b) Formal programs requiring attendance may be considered for credit if:
1. A detailed outline is prepared and presented to the commissioner for approval;
2. The program is at least one (1) credit hour [fifty (50) minutes] in length; and
3. The program is conducted by a qualified instructor, discussion leader or lecturer.
(c) An instructor of a certified continuing education program shall receive continuing
education credit. Credit for presenting a certified continuing education program will be awarded only for the first presentation, unless a program has been substantially revised since credit was last awarded. The amount of credit awarded shall be two (2) times the number of approved class hours for the program.
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(d) The list of subjects that will be acceptable for continuing education credits includes, but is not limited to the following:
1. Insurance, annuities, and risk management;
2. Insurance laws and regulations;
3. Mathematics, statistics, and probability;
4. Economics;
5. Business law;
6. Finance;
7. Taxes;
8. Business environment, management or organization; and
9. Subjects other than those listed above may be acceptable if the insurance
producer can demonstrate that they contribute to professional competence and otherwise meet the standards set forth in this Rule. The responsibility for substantiating that a particular program meets the requirements of this Rule rests solely upon the insurance producer.
(e) A member of an insurance trade association shall receive two (2) general continuing
education credit hours annually based on membership in an insurance trade association. A maximum of two (2) general continuing education credit hours, based on association membership, are allowed per year. The two (2) general continuing education credit hours are allowable if the insurance trade association:
1. Is approved as a continuing education provider as required by this rule;
2. Has been in existence for at least five (5) years;
3. Was formed for purposes other than providing continuing education;
4. Provides the commissioner with the association’s Articles of Incorporation on file
with the Tennessee Secretary of State;
5. Provides to the commissioner a certification that:
(i) Those members are active in the insurance trade association; and
(ii) Those members attended a national, statewide, or intrastate regional meeting in the previous year; and
6. Pays a course reporting fee of one dollar ($1.00) for each continuing education
credit hour reported in accordance with the Department’s or its designee’s internet credit recording procedure.
(e)(f) Subjects that will not be acceptable for continuing education credits include, but are not
limited to the following:
1. Any course used to prepare for taking an insurance licensing examination;
2. Committee service in any professional organization;
3. Computer science courses;
4. Motivational, psychology, or sales training courses; and
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5. Securities courses, other than variable annuities.
(f)(g) Continuing education programs which shall be deemed to meet the commissioner’s
standards, if properly submitted to the commissioner and approved, are:
1. Any part of the Life Underwriter Training Counsel Life Course Curriculum or Health Course;
2. Any part of the American College Life Underwriter Training Counsel Fellow
(LUTFC) and Financial Services Specialist (FSS) designation curriculum;
3. Any part of the American College Chartered Life Underwriter (CLU), Chartered Financial Consultant (ChFC), Chartered Advisor for Senior Living (CASL), or Master of Science in Financial Services (MSFS) diploma curriculum;
4. Any part of the Insurance Institute of America’s programs;
5. Any part of the American Institute for Property and Liability Underwriters
Chartered Property Casualty Underwriter (CPCU) professional designation program;
6. Any part of the National Alliance for Insurance Education programs;
7. Any part of the American Land Title Association’s, the Land Title Institute’s, or
the Tennessee Land Title Association’s programs;
8. Any program relating to the field of real property law or title insurance law approved by the Committee on Continuing Legal Education of the Supreme Court of Tennessee;
9. Successful completion of any insurance related course approved by the
commissioner and taught by an accredited college or university per credit hour granted;
10. Any part of the Tennessee Association of Health Underwriters’ or the National
Association of Health Underwriters’ programs;
11. Any part of the Independent Insurance Agents of Tennessee’s programs;
12. Any part of the National Association of Insurance and Financial Advisors (NAIFA) of Tennessee programs; and
13. Any part of the Professional Insurance Agents of Tennessee (PIA) programs.
(g)(h) A producer may carry over a maximum of twelve (12) continuing education credit hours to
the next renewal cycle for additional hours obtained during the biennium. However, carry over shall not apply to ethics continuing education credit requirements.
(h)(i) Any correspondence or self-study program approved by the commissioner shall qualify
for the equivalent number of classroom hours, provided that:
1. All correspondence or self-study programs shall include a final examination; and
2. Any provider of correspondence or self-study programs shall be the originally published provider or have the written authorization of the originally published provider to present such program.
(i)(j) All programs for continuing education must be submitted for approval on a form
prescribed by the commissioner and submitted at least thirty (30) days prior to the program’s presentation. In the event the provider does not know the specific content of
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the curriculum prior to program presentation due to the nature of the program, the provider may submit the course thirty (30) days after program presentation. However, the provider shall notify attendees and place prominently in all marketing materials that the continuing education course may or may not be approved for credit and that the approval may not occur until sixty (60) days after the course is taught. Any hours credited to a producer from a course approved after the course is given shall only be credited as of the day of the approval and not the day of the course’s presentation.
(j)(k) The commissioner specifically reserves the right to approve and disapprove credit for
continuing education claimed under this Rule.
(k)(l) The commissioner may require any original publisher or provider to submit all material to be used in the program to the commissioner for review.
(l)(m) Any applicant who seeks approval as a provider of certified continuing education
programs shall submit an application on a form prescribed by the commissioner with a non-refundable filing fee in the amount of five hundred ($500) dollars. All providers shall be required to annually renew their authority to provide certified continuing education programs on a form prescribed by the commissioner with a non-refundable filing fee in the amount of two hundred and fifty ($250) dollars. Any material change in or to a certified continuing education program shall require prior approval before an insurance producer may receive credit for such altered program. Program certification shall expire at such time as the commissioner may determine. State educational institutions are exempt from these filing fees, but must comply with all other requirements in order to obtain/maintain provider authority.
(m)(n) All providers must maintain, for not less than four (4) years from the date the program
was presented, a record of persons attending each program and upon completion of the program requirements, provide a certificate of completion with credit hours earned to each successful student. The certificate shall bear the provider’s identification number as assigned by the commissioner upon the granting of authority to provide continuing education programs.
(n)(o) Any insurance company, trade association, individual corporation, partnership, firm or
agency that has been approved and been given authority by the commissioner to be a continuing education provider under this Rule shall meet the following continuing minimum operational standards:
1. A minimum of one (1) business office open to the public, with a minimum of one
(1) telephone to be answered by an employee or voice message service, during normal business hours, equipped with the usual office equipment such as a desk, filing cabinets, typewriter/word processor/computer, supplies, and other similar items; and
2. Classroom(s) (not applicable to self-study programs) in compliance with the
Americans with Disabilities Act (ADA), comprised of a room large enough to accommodate a minimum of ten (10) students with comfortable chairs and appropriate writing surfaces for each student and a chalk board or flip chart.
(o)(p) Any individual or provider who violates the provisions of this Chapter shall be subject to
disciplinary action and/or civil penalties pursuant to T. C. A. §§ 56-6-112 and 56-2-305.
Authority: T.C.A. §§ 56-2-305, 56-6-107, 56-6-112, 56-6-118(b), 56-6-124, 56-32-114, 56-35-122, 56-35-201, and 42 U.S.C. § 4011 (2004).
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* If a roll-call vote was necessary, the vote by the Agency on these rulemaking hearing rules was as follows: Board Member Aye No Abstain Absent Signature
(if required) I certify that this is an accurate and complete copy of rulemaking hearing rules, lawfully promulgated and adopted by the Commissioner (board/commission/other authority) on _______________ (mm/dd/yyyy), and is in compliance with the provisions of T.C.A. § 4-5-222. I further certify the following: Notice of Rulemaking Hearing filed with the Department of State on: 12/19/2019
Rulemaking Hearing(s) Conducted on: (add more dates). 02/14/2020
Date:
Signature:
Name of Officer:
Title of Officer: Agency/Board/Commission: Tennessee Department of Commerce and Insurance Rule Chapter Number(s): 0780-01-56 All rulemaking hearing rules provided for herein have been examined by the Attorney General and Reporter of the State of Tennessee and are approved as to legality pursuant to the provisions of the Administrative Procedures Act, Tennessee Code Annotated, Title 4, Chapter 5.
______________________________
Herbert H. Slatery III Attorney General and Reporter
______________________________ Date
Department of State Use Only
Filed with the Department of State on:
Effective on:
_________________________________ Tre Hargett
Secretary of State
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Public Hearing Comments One copy of a document that satisfies T.C.A. § 4-5-222 must accompany the filing. Jim Layman, Director of Government Relations for the Insurors of Tennessee, appeared and showed support for the rule amendments. Mr. Layman submitted written comments to the rules prior to the hearing. The written comments were read aloud at the rulemaking hearing along with one (1) additional comment made at the hearing. The comments include the following:
Comment 1 0780-01-56-.08(2)(e)(5) It was commented that there should be an addition of the word “and” at the end of 0780-01-56-.08(2)(e)(5) to clarify that an insurance trade association must meet all of the criteria found in (e)(1)-(6) in order for its members to receive continuing education credit hours. Agency Response to Comment 1 The Department thanks Mr. Layman for his participation. The Department confirmed the error named in the comment which has been corrected for the final filing. Comment 2 0780-01-56-.08(2)(e)(5)(i) It was commented that the term “professional insurance association” used at 0780-01-56-.08(2)(e)(5)(i) should be changed to “insurance trade association” for consistency with other portions of the rule. Agency Response to Comment 2 The Department thanks Mr. Layman for his participation. The Department agrees that the language should be changed for consistency and the changes have been made for the final filing. Comment 3 0780-01-56-.08(2)(e)
It was commented that 0780-01-56-.08(2)(e) contains the phrase “two (2) general continuing education credits” and should be replaced with “two (2) general continuing education credit hours” for consistency with other portions of the rules. Agency Response to Comment 3 The Department thanks Mr. Layman for his participation. The Department agrees that the language should be changed for consistency and the changes have been made for the final filing. Comment 4 0780-01-56-.08(2)
It was commented that the first word of subparagraphs (e)(1)-(6) of 0780-01-56-.08(2) should be capitalized for consistency with other portions of the rule. Agency Response to Comment 4 The Department thanks Mr. Layman for his participation. The Department agrees that the language should be changed for consistency and the changes have been made for the final filing
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Regulatory Flexibility Addendum Regulatory Flexibility Analysis pursuant to T.C.A. § 4-5-402 1. The extent to which the rule may overlap, duplicate, or conflict with other federal, state, and local
governmental rules.
It is not anticipated that the proposed rules will overlap or conflict with other federal, state, or local governmental rules. The rule changing the number of pre-licensing title insurance course education hours reflects the current Tennessee statute.
The Department modeled the continuing education rule permitting licensed insurance producers to earn two (2) general continuing education credit hours based on insurance trade association membership and attendance at a national, statewide, or intrastate regional meeting in the previous year after a similar North Carolina regulation.
2. Clarity, conciseness, and lack of ambiguity in the rule. The proposed rules have been drafted to be clear, concise, and unambiguous. 3. The establishment of flexible compliance and reporting requirements for small businesses.
The proposed rules are not anticipated to alter the standard practices of reporting and recordkeeping currently utilized by small business. The rule regarding continuing education is allowing flexibility for licensed insurance producers to obtain continuing education by permitting credit based on insurance trade association membership and attendance at association meetings.
4. The establishment of friendly schedules or deadlines for compliance and reporting requirements for small
businesses.
The proposed rules are not anticipated to establish unfriendly schedules or unreasonable deadlines for compliance and reporting requirements for small businesses. The rule regarding continuing education is providing additional methods for licensed insurance producers to meet the continuing education requirements for renewal.
5. The consolidation or simplification of compliance or reporting requirements for small businesses.
The proposed rules are not anticipated to alter the standard practices of reporting and recordkeeping currently utilized by small business. The association membership information will be reported in the same manner as general continuing education courses are currently reported.
6. The establishment of performance standards for small businesses as opposed to design or operational
standards required in the proposed rule. The proposed rules do not establish any performance standards for small businesses. 7. The unnecessary creation of entry barriers or other effects that stifle entrepreneurial activity, curb
innovation, or increase costs.
These rules are not anticipated to create any unnecessary entry barriers or other effects that stifle entrepreneurial activity, curb innovation, or increase costs. The rule is allowing a less restrictive and less burdensome means for licensed insurance producers to obtain the continuing education requirements for renewal.
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Economic Impact Statement pursuant to T.C.A. § 4-5-403. 1. Types and estimated number of small businesses directly affected:
Small businesses operated by or employing licensed insurance producers will be affected by the promulgation of these rules by providing them the benefit of earning two (2) general continuing education credit hours based on membership in an insurance trade association and attendance of association meetings.
2. Projected reporting, recordkeeping, and other administrative costs:
There is no foreseeable alteration in existing reporting or recordkeeping utilized by small businesses that will result from the promulgation of these rules.
3. Probable effect on small businesses:
Small businesses operated by or employing licensed insurance producers will be affected by the promulgation of these rules by providing them the benefit of earning two (2) general continuing education credit hours based on membership in an insurance trade association and attendance of association meetings.
4. Less burdensome, intrusive, or costly alternative methods:
In this instance, the rule is allowing a less restrictive and less burdensome means for licensed insurance producers to obtain the continuing education requirements for renewal.
5. Comparison with federal and state counterparts:
There are no federal counterparts to the rule. Multiple state counterparts in the southeast have similar regulations permitting general continuing education credit hours based on membership in an insurance trade association and attendance of association meetings.
6. Effect of possible exemption of small businesses:
An exemption from the rule would not benefit small businesses because the rule is allowing a less restrictive and less burdensome means for licensed insurance producers to obtain the continuing education requirements for renewal.
Impact on Local Governments Pursuant to T.C.A. §§ 4-5-220 and 4-5-228 “any rule proposed to be promulgated shall state in a simple declarative sentence, without additional comments on the merits of the policy of the rules or regulation, whether the rule or regulation may have a projected impact on local governments.” (See Public Chapter Number 1070 (http://publications.tnsosfiles.com/acts/106/pub/pc1070.pdf) of the 2010 Session of the General Assembly.) The rules will not impact local governments.
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Additional Information Required by Joint Government Operations Committee All agencies, upon filing a rule, must also submit the following pursuant to T.C.A. § 4-5-226(i)(1). (A) A brief summary of the rule and a description of all relevant changes in previous regulations effectuated by
such rule;
The rule amends Tenn. Comp. R. & Regs. 0780-01-56-.06(3) [Pre-Licensing Education Requirements] by correcting the number of education hours from five (5) hours to twenty (20) hours, which a title insurance producer is required to have for purposes of initial licensure. T.C.A. § 56-6-106, the statute governing the initial licensure requirements for title insurance producers, was amended in 2014 to require twenty (20) hours of education for title insurance producers for initial licensure, but the rule was never updated to reflect this change. Since the statute was amended in 2014, the Insurance Division has enforced the language of the statute requiring title insurance producers to have twenty (20) education hours prior to initial licensure. The rule is being amended in order to reflect the language of the state statute. The rule also amends Tenn. Comp. R. & Regs. 0780-01-56-.08(2) [Continuing Education; Qualifying Programs] by adding a new subparagraph (e). The new subparagraph permits a licensed agent to receive two (2) general continuing education credit hours to be applied toward the twenty-four (24) hours that are required on a biennial basis for license renewal, based on membership in an insurance trade association and attending a national, statewide, or intrastate regional meeting in the previous year. A maximum of two (2) general continuing education credit hours, based on association membership, will be allowed per year. In order to qualify, the insurance trade association must: be approved as a continuing education provider as required by this rule; have been in existence for at least five (5) years; have been formed for purposes other than providing continuing education; and, provide the Commissioner with a copy of the association’s Articles of Incorporation on file with the Tennessee Secretary of State. The insurance trade association shall pay a course reporting fee of one dollar ($1.00) each year that a licensed agent’s membership is reported for purposes of receiving continuing education credit. Currently, there is a one dollar ($1.00) fee for each continuing education credit hour reported, and membership status will be reported in the same way. (B) A citation to and brief description of any federal law or regulation or any state law or regulation mandating
promulgation of such rule or establishing guidelines relevant thereto;
Tenn. Code Ann. § 56-6-124(a) authorizes the Commissioner to promulgate reasonable regulations as are necessary or proper to carry out the purposes of T.C.A. § 56-6-101 et seq. Tenn. Code Ann. § 56-6-124(c) requires the Commissioner to promulgate continuing education requirements for individuals licensed under T.C.A. § 56-6-101 et seq. (C) Identification of persons, organizations, corporations or governmental entities most directly affected by this
rule, and whether those persons, organizations, corporations or governmental entities urge adoption or rejection of this rule;
This rule affects those seeking to be insurance producers and current licensed insurance producers. The amendment regarding continuing education credit affects individuals seeking biennial renewal of an insurance producer license. Insurance trade associations are also affected by the rule, as they will have to follow the requirements as stated in the rule in order to effectuate their members earning two (2) general continuing education credit hours based on membership and attending a trade association meeting. It is likely that all persons engaged in the insurance industry will be proponents of the amendment to the rule related to pre-licensing course hours as the amendment ensures that the regulation accurately reflects the statutory language. The Insurors of Tennessee and National Association of Insurance and Financial Advisors support the rule allowing for association membership to be counted towards continuing education requirements. (D) Identification of any opinions of the attorney general and reporter or any judicial ruling that directly relates to
the rule or the necessity to promulgate the rule; None. (E) An estimate of the probable increase or decrease in state and local government revenues and expenditures,
if any, resulting from the promulgation of this rule, and assumptions and reasoning upon which the estimate
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is based. An agency shall not state that the fiscal impact is minimal if the fiscal impact is more than two percent (2%) of the agency's annual budget or five hundred thousand dollars ($500,000), whichever is less;
Minimal. In order for an insurance producer to receive the continuing education credit based on membership and attendance at a national, statewide, or intrastate regional meeting in the previous year, the insurance trade association must report the membership using the same online method in which attendance at standard continuing education courses are reported. The insurance trade association shall pay a course reporting fee of one dollar ($1.00) per member each year that a licensed agent’s membership is reported for purposes of receiving continuing education credit. Currently, there is a one dollar ($1.00) fee for each continuing education credit hour reported, and membership status will be reported in the same way. This one dollar ($1.00) fee is paid to a third-party contractor that handles all aspects of online licensing and renewals for the Insurance Division of the Department. The Department does not expect any additional revenue as the membership status will be reported with the same fee as required with all other reporting of continuing education and the proposed rules do not increase the number hours required, but provides another method to obtain continuing education hours. (F) Identification of the appropriate agency representative or representatives, possessing substantial knowledge
and understanding of the rule; Rachel Jrade-Rice, Assistant Commissioner for Insurance Kimberly Biggs, Director, Agent Licensing Section (G) Identification of the appropriate agency representative or representatives who will explain the rule at a
scheduled meeting of the committees; Rachel Jrade-Rice, Assistant Commissioner for Insurance Kimberly Biggs, Director, Agent Licensing Section Jenny Taylor, Associate General Counsel and Supervising Attorney for Insurance (H) Office address, telephone number, and email address of the agency representative or representatives who
will explain the rule at a scheduled meeting of the committees; and 500 James Robertson Parkway Nashville, TN 37243 [email protected] (615) 741-3450 [email protected] (615) 741-2693 [email protected] (615) 741-2325 (I) Any additional information relevant to the rule proposed for continuation that the committee requests.
N/A