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  • Acts
  • 2002
  • Chapter 106 AN ACT RELATIVE TO THE LICENSING OF INSURANCE PRODUCERS.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:

SECTION 1. The first paragraph of section 14 of chapter 175 of the General Laws, as appearing in the 2000 Official Edition, is hereby amended by striking out the thirteenth and fourteenth clauses and inserting in place thereof the following clause:-

For each license or renewal thereof to an insurance producer under sections 162M and 162N.

SECTION 2. Said first paragraph of said section 14 of said chapter 175, as so appearing, is hereby further amended by striking out, in lines 52 and 53, the words "one hundred and sixty-three, one hundred and sixty-six" and inserting in place thereof the following figures:- 162M, 162N.

SECTION 3. Section 162 of said chapter 175, as so appearing, is hereby amended by striking out the first and second paragraphs.

SECTION 3A. Said section 162 of said chapter 175, as so appearing, is hereby further amended by striking out, in lines 19 and 20, the words "as referred to in the first and second paragraph".

SECTION 4. Section 162A of said chapter 175 is hereby repealed.

SECTION 5. Said chapter 175 is hereby further amended by inserting after section 162F the following 18 sections:-

Section 162G. Sections 162H to 162X, inclusive, shall govern the qualifications and procedures for the licensing of insurance producers.

Sections 162H to 162X, inclusive, do not apply to special insurance brokers licensed pursuant to section 168, except as provided in section 162N and subsection B of section 162U.

Section 162H. As used in sections 162G to 162X, inclusive, the following words shall, unless the context requires otherwise, have the following meanings:-

"Business entity", a corporation, association, partnership, limited liability company, limited liability partnership or other legal entity.

"Home state", the District of Columbia and any state or territory of the United States in which an insurance producer maintains his principal place of residence or principal place of business and is licensed to act as an insurance producer.

"Insurance", any of the lines of authority in section 47.

"Insurance producer", a person required to be licensed under the laws of the commonwealth to sell, solicit or negotiate insurance.

"Insurer", a corporation, association, partnership or individual engaged as a principal in the business of insurance including exchanges as defined in section 94A.

"License", a document issued by the commissioner authorizing a person to act as an insurance producer for the lines of authority specified in the document. The license itself does not create any authority, actual, apparent or inherent, in the holder to represent or commit an insurance carrier.

"Limited line credit insurance", includes credit life, credit disability, credit property, credit unemployment, involuntary unemployment, mortgage life, mortgage guaranty, mortgage disability, guaranteed automobile protection insurance and any other form of insurance offered in connection with an extension of credit that is limited to partially or wholly extinguishing that credit obligation that the commissioner determines should be designated a form of limited line credit insurance.

"Limited line credit insurance producer", a person who sells, solicits or negotiates 1 or more forms of limited line credit insurance coverage to individuals through a master, corporate, group or individual policy.

"Limited lines insurance", any line of insurance that the commissioner deems necessary to recognize for the purposes of complying with subsection (e) of section 162N.

"Limited lines producer", a person authorized by the commissioner to sell, solicit or negotiate limited lines insurance.

"National Association of Insurance Commissioners", NAIC.

"Negotiate", the act of conferring directly with or offering advice directly to a purchaser or prospective purchaser of a particular contract of insurance concerning any of the substantive benefits, terms or conditions of the contract, provided that the person engaged in that act either sells insurance or obtains insurance from insurers for purchasers.

"Person", an individual or a business entity.

"Sell", to exchange a contract of insurance by any means, for money or its equivalent, on behalf of an insurance company.

"Solicit", attempting to sell insurance or asking or urging a person to apply for a particular kind of insurance from a particular company.

"Terminate", the cancellation of the relationship between an insurance producer and the insurer or the termination of a producer's authority to transact insurance.

"Uniform business entity application", the current version of the NAIC uniform business entity application for resident and nonresident business entities.

"Uniform application", the current version of the NAIC uniform application for resident and nonresident producer licensing.

Section 162I. A person shall not sell, solicit or negotiate insurance in the commonwealth for any class or classes of insurance unless the person is licensed for that line of authority in accordance with sections 162H to 162X, inclusive.

Section 162J. (a) Nothing in sections 162H to 162X, inclusive, shall be construed to require an insurer to obtain an insurance producer license. In this section, the term "insurer" does not include an insurer's officers, directors, employees, subsidiaries or affiliates.

(b) A license as an insurance producer shall not be required of the following:-

(1) an officer, director or employee of an insurer or of an insurance producer if the officer, director or employee does not receive any commission on policies written or sold to insure risks residing, located or to be performed in the commonwealth and:-

(i) the officer, director or employee's activities are executive, administrative, managerial, clerical or a combination of these, and are only indirectly related to the sale, solicitation or negotiation of insurance;

(ii) the officer, director or employee's function relates to underwriting, loss control, inspection or the processing, adjusting, investigating or settling of a claim on a contract of insurance; or

(iii) the officer, director or employee is acting in the capacity of a special agent or agency supervisor assisting insurance producers where the person's activities are limited to providing technical advice and assistance to licensed insurance producers and do not include the sale, solicitation or negotiation of insurance;

(2) a person who secures and furnishes information for the purpose of group life insurance, group property and casualty insurance, group annuities, group or blanket accident and health insurance; or for the purpose of enrolling individuals under plans; issuing certificates under plans or otherwise assisting in administering plans; or performs administrative services related to mass marketed property and casualty insurance; where no commission is paid to the person for the service;

(3) an employer or association or its officers, directors, employees, or the trustees of an employee trust plan, to the extent that the employers, officers, employees, director or trustees are engaged in the administration or operation of a program of employee benefits for the employer's or association's own employees or the employees of its subsidiaries or affiliates, which program involves the use of insurance issued by an insurer, as long as the employers, associations, officers, directors, employees or trustees are not in any manner compensated, directly or indirectly, by the company issuing the contracts;

(4) employees of insurers or organizations employed by insurers who are engaging in the inspection, rating or classification of risks, or in the supervision of the training of insurance producers and who are not individually engaged in the sale, solicitation or negotiation of insurance;

(5) a person whose activities in the commonwealth are limited to advertising without the intent to solicit insurance in the commonwealth through communications in printed publications or other forms of electronic mass media whose distribution is not limited to residents of the state if the person does not sell, solicit or negotiate insurance that would insure risks residing, located or to be performed in the commonwealth;

(6) a person who is not a resident of the commonwealth who sells, solicits or negotiates a contract of insurance for commercial property and casualty risks to an insured with risks located in more than 1 state insured under that contract if that person is otherwise licensed as an insurance producer to sell, solicit or negotiate that insurance in the state where the insured maintains its principal place of business and the contract of insurance insures risks located in that state;

(7) a salaried full-time employee who counsels or advises his employer relative to the insurance interests of the employer or of the subsidiaries or business affiliates of the employer if the employee does not sell or solicit insurance or receive a commission; or

(8) a person, and an officer, director or employee of said person, who has obtained a Class 1 or Class 2 license under sections 58 and 59 of chapter 140, and who sells, solicits, or negotiates credit life, credit disability, and guaranteed automobile protection insurance in conjunction with an executed sales or lease contract for a motor vehicle.

Section 162K. (a) A resident individual applying for an insurance producer license shall pass a written examination unless exempt pursuant to section 162O. The examination shall test the knowledge of the individual concerning the lines of authority for which application is made, the duties and responsibilities of an insurance producer and the insurance laws and regulations of the commonwealth. Examinations required by this section shall be developed and conducted under rules and regulations prescribed by the commissioner.

(b) The commissioner may make arrangements, including contracting with an outside testing service, for administering examinations and collecting the nonrefundable fee determined or approved by the commissioner.

(c) Each individual applying for an examination shall remit a nonrefundable fee as prescribed by the commissioner.

(d) An individual who fails to appear for the examination as scheduled or fails to pass the examination, shall reapply for an examination and remit all required fees and forms before being rescheduled for another examination.

Section 162L. (a) A person applying for a resident insurance producer license shall make application to the commissioner on the uniform application and declare under penalty of refusal, suspension or revocation of the license that the statements made in the application are true, correct and complete to the best of the individual's knowledge and belief. Before approving the application, the commissioner shall find that the individual:-

(1) is at least 18 years of age;

(2) has not committed any act that is a ground for denial, suspension or revocation set forth in section 162R;

(3) when required by the commissioner, has completed a prelicensing course of study for the lines of authority for which the person has applied;

(4) has paid the fees prescribed by section 14; and

(5) has successfully passed the examinations for the lines of authority for which the person has applied.

(b) A business entity acting as an insurance producer is required to obtain an insurance producer license. Application shall be made using the uniform business entity application. Before approving the application, the commissioner shall find that:-

(1) the business entity has paid the fees prescribed by section 14; and

(2) the business entity has designated a licensed producer responsible for the business entity's compliance with the insurance laws, rules and regulations of the commonwealth.

(c) The commissioner may require any documents reasonably necessary to verify the information contained in an application.

(d) Each insurer that sells, solicits or negotiates any form of limited line credit insurance shall provide to each individual whose duties will include selling, soliciting or negotiating limited line credit insurance a program of instruction that may be approved by the commissioner.

Section 162M. (a) Unless denied licensure pursuant to section 162R, persons who have met the requirements of sections 162K and 162L shall be issued an insurance producer license. An insurance producer may receive qualification for a license in 1 or more of the following lines of authority:-

(1) Life, insurance coverage on human lives including benefits of endowment and annuities, and may include benefits in the event of death or dismemberment by accident and benefits for disability income.

(2) Accident and health or sickness, insurance coverage for sickness, bodily injury or accidental death, and may include benefits for disability income.

(3) Property, insurance coverage for the direct or consequential loss or damage to property of every kind.

(4) Casualty, insurance coverage against legal liability, including that for death, injury or disability or damage to real or personal property.

(5) Variable life and variable annuity products, insurance coverage provided under variable life insurance contracts and variable annuities.

(6) Personal lines, property and casualty insurance coverage sold to individuals and families for primarily noncommercial purposes.

(7) Credit, limited line credit insurance.

(8) Any other line of insurance permitted under state law or regulation.

(b) An insurance producer license shall remain in effect unless revoked or suspended as long as the fee prescribed by section 14 is paid and education requirements for resident individual producers are met by the due date.

(c) An individual insurance producer who allows his license to lapse may, within 12 months from the due date of the renewal fee, reinstate the same license without the necessity of passing a written examination, but a penalty in the amount of double the unpaid renewal fee shall be required for any renewal fee received after the due date.

(d) A licensed insurance producer who is unable to comply with license renewal procedures due to military service or some other extenuating circumstance may request a waiver of those procedures. The producer may also request a waiver of any examination requirement or any other fine or sanction imposed for failure to comply with renewal procedures.

(e) The license shall contain the licensee's name, address, personal identification number, and the date of issuance, the lines of authority, the expiration date and any other information the commissioner deems necessary.

(f) Licensees shall inform the commissioner by any means acceptable to the commissioner of a change of address within 30 days of the change.

(g) In order to assist in the performance of the commissioner's duties, the commissioner may contract with nongovernmental entities, including the NAIC or any affiliates or subsidiaries that the NAIC oversees, to perform any ministerial functions, including the collection of fees, related to producer licensing that the commissioner and the nongovernmental entity may deem appropriate.

Section 162N. (a) Unless denied licensure pursuant to section 162R, a nonresident person shall receive a nonresident producer license if:-

(1) the person is currently licensed as a resident and in good standing in his home state;

(2) the person has submitted the proper request for licensure and has paid the fees prescribed by section 14;

(3) the person has submitted or transmitted to the commissioner the application for licensure that the person submitted to his home state, or in lieu of the same, a completed uniform application; and

(4) the person's home state awards nonresident producer licenses to residents of the commonwealth on the same basis.

(b) The commissioner may verify the producer's licensing status through the producer database maintained by the NAIC, its affiliates or subsidiaries.

(c) A nonresident producer who moves from 1 state to another state or a resident producer who moves from the commonwealth to another state shall file a change of address and provide certification from the new resident state within 30 days of the change of legal residence. No fee or license application is required.

(d) Notwithstanding any other provision of sections 162H to 162X, inclusive, a person licensed as a surplus lines producer in his home state shall receive a nonresident surplus lines producer license under subsection (a). Except as provided in said subsection (a), nothing in this section otherwise amends or supersedes any provision of section 168.

(e) Notwithstanding any other provision of sections 162H to 162X, inclusive, a person licensed as a limited line credit insurance or other type of limited lines producer in his home state shall receive a nonresident limited lines producer license, under subsection (a), granting the same scope of authority as granted under the license issued by the producer's home state. For the purposes of this subsection limited line insurance is any authority granted by the home state which restricts the authority of the license to less than the total authority prescribed in the associated major lines pursuant to clauses (1) to (5), inclusive, of subsection (a) of section 162M.

Section 162O. (a) An individual who applies for an insurance producer license in the commonwealth who was previously licensed for the same lines of authority in another state shall not be required to complete any prelicensing education or examination. This exemption is only available if the person is currently licensed in that state or if the application is received within 90 days of the cancellation of the applicant's previous license and if the prior state issues a certification that, at the time of cancellation, the applicant was in good standing in that state or the state's producer database records, maintained by the NAIC, its affiliates or subsidiaries, indicate that the producer is or was licensed in good standing for the line of authority requested.

(b) A person licensed as an insurance producer in another state who moves to the commonwealth shall make application within 90 days of establishing legal residence to become a resident licensee under section 162L. No prelicensing education or examination shall be required of that person to obtain any line of authority previously held in the prior state except where the commissioner determines otherwise by regulation.

Section 162P. An insurance producer doing business under any name other than the producer's legal name is required to notify the commissioner prior to using the assumed name.

Section 162Q. (a) The commissioner may issue a temporary insurance producer license for a period not to exceed 180 days without requiring an examination if the commissioner determines that the temporary license is necessary for the servicing of an insurance business in the following cases:-

(1) to the surviving spouse or court appointed personal representative of a licensed insurance producer who dies or becomes mentally or physically disabled to allow adequate time for the sale of the insurance business owned by the producer or for the recovery or return of the producer to the business or to provide for the training and licensing of new personnel to operate the producer's business;

(2) to a member or employee of a business entity licensed as an insurance producer, upon the death or disability of an individual designated in the business entity application or the license;

(3) to the designee of a licensed insurance producer entering active service in the armed forces of the United States; or

(4) in any other circumstance where the commissioner deems that the public interest will best be served by the issuance of this license.

(b) The commissioner may by order limit the authority of any temporary licensee in any way considered necessary to protect insureds and the public. The commissioner may require the temporary licensee to have a suitable sponsor who is a licensed producer or insurer and who assumes responsibility for all acts of the temporary licensee and may impose other similar requirements designed to protect insureds and the public. The commissioner may by order revoke a temporary license if the interest of insureds or the public are endangered. A temporary license may not continue after the owner or the personal representative disposes of the business.

Section 162R. (a) The commissioner may place on probation, suspend, revoke or refuse to issue or renew an insurance producer's license or may levy a civil penalty in accordance with section 7 of chapter 176D or any other applicable sections of the General Laws or any combination of actions, for any 1 or more of the following causes:-

(1) providing incorrect, misleading, incomplete or materially untrue information in the license application;

(2) violating any insurance laws, or violating any regulation, subpoena or order of the commissioner or of another state's insurance commissioner;

(3) obtaining or attempting to obtain a license through misrepresentation or fraud;

(4) improperly withholding, misappropriating or converting any monies or properties received in the course of doing insurance business;

(5) intentionally misrepresenting the terms of an actual or proposed insurance contract or application for insurance;

(6) having been convicted of a felony;

(7) having admitted or been found to have committed any insurance unfair trade practice or fraud;

(8) using fraudulent, coercive or dishonest practices, or demonstrating incompetence, untrustworthiness or financial irresponsibility in the conduct of business in the commonwealth or elsewhere;

(9) having an insurance producer license, or its equivalent, denied, suspended or revoked in any other state, province, district or territory;

(10) forging another's name to an application for insurance or to any document related to an insurance transaction;

(11) improperly using notes or any other reference material to complete an examination for an insurance license;

(12) knowingly accepting insurance business from an individual who is not licensed;

(13) failing to comply with an administrative or court order imposing a child support obligation, in a manner consistent with section 47A of chapter 62C or section 16 of chapter 119A; or

(14) failing to pay state income tax or comply with any administrative or court order directing payment of state income tax.

(b) In the event that the action by the commissioner is to nonrenew or to deny an application for a license, the commissioner shall notify the applicant or licensee and advise, in writing, the applicant or licensee of the reason for the denial or nonrenewal of the applicant's or licensee's license. The applicant or licensee may make written demand upon the commissioner within 30 days for a hearing before the commissioner to determine the reasonableness of the commissioner's action. The hearing shall be held pursuant to chapter 30A.

(c) The license of a business entity may be suspended, revoked or refused if the commissioner finds, after hearing, that an individual licensee's violation was known or should have been known by 1 or more of the partners, officers or managers acting on behalf of the partnership or corporation and the violation was neither reported to the commissioner nor corrective action taken.

(d) In addition to or in lieu of any applicable denial, suspension or revocation of a license, a person may, after hearing, be subject to a civil fine according to section 7 of chapter 176D.

(e) The commissioner shall retain the authority to enforce the provisions of and impose any penalty or remedy authorized by sections 162H to 162X, inclusive, and chapter 176D against any person who is under investigation for or charged with a violation of sections 162H to 162X, inclusive, or chapter 176D even if the person's license or registration has been surrendered or has lapsed by operation of law.

Section 162S. (a) An insurance producer shall not act as an agent of an insurer unless the insurance producer becomes an appointed agent of that insurer. An insurance producer who is not acting as an agent of an insurer is not required to become appointed.

(b) To appoint a producer as its agent, the appointing insurer shall file, in a format approved by the commissioner, a notice of appointment within 15 days from the date the agency contract is executed or the first insurance application is submitted. An insurer may also elect to appoint a producer to all or some insurers within the insurer's holding company system or group by the filing of a single appointment request.

(c) Upon receipt of the notice of appointment, the commissioner shall verify within a reasonable time not to exceed 30 days that the insurance producer is eligible for appointment. If the insurance producer is determined to be ineligible for appointment, the commissioner shall notify the insurer within 5 days of its determination.

(d) An insurer shall pay an appointment fee, in the amount prescribed by section 14, for each insurance producer appointed by the insurer.

(e) An insurer shall remit, in a manner prescribed by the commissioner, a renewal appointment fee in the amount prescribed by section 14.

Section 162T. (a) An insurer or authorized representative of the insurer that terminates the appointment, employment, contract or other insurance business relationship with a producer shall notify the commissioner within 30 days following the effective date of the termination, using a format prescribed by the commissioner, if the reason for termination is one of the reasons set forth in section 162R or the insurer has knowledge the producer was found by a court, government body, or self-regulatory organization authorized by law to have engaged in any of the activities in section 162R. Upon the written request of the commissioner, the insurer shall provide additional information, documents, records or other data pertaining to the termination or activity of the producer.

(b) An insurer or authorized representative of the insurer that terminates the appointment, employment or contract with a producer for any reason not set forth in section 162R shall notify the commissioner within 30 days following the effective date of the termination, using a format prescribed by the commissioner. Upon written request of the commissioner, the insurer shall provide additional information, documents, records or other data pertaining to the termination.

(c) The insurer or the authorized representative of the insurer shall promptly notify the commissioner in a format acceptable to the commissioner if, upon further review or investigation, the insurer discovers additional information that would have been reportable to the commissioner in accordance with subsection (a) had the insurer then known of its existence.

(d) (1) Within 15 days after making the notification required by subsections (a), (b) and (c), the insurer shall mail a copy of the notification to the producer at his last known address. If the producer is terminated for cause for any of the reasons listed in section 162R, the insurer shall provide a copy of the notification to the producer at his last known address by certified mail, return receipt requested, postage prepaid or by overnight delivery using a nationally recognized carrier.

(2) Within 30 days after the producer has received the original or additional notification, the producer may file written comments concerning the substance of the notification with the commissioner. The producer shall, by the same means, simultaneously send a copy of the comments to the reporting insurer, and the comments shall become a part of the commissioner's file and accompany every copy of a report distributed or disclosed for any reason about the producer as permitted under subsection (f).

(e) (1) In the absence of actual malice, an insurer, the authorized representative of the insurer, a producer, the commissioner, or an organization of which the commissioner is a member and which compiles information and makes it available to other insurance commissioners or regulatory or law enforcement agencies, shall not be subject to civil liability, and a civil cause of action of any nature shall not arise against these entities or their respective agents or employees, as a result of any statement or information required by or provided under this section; or any information relating to any statement that may be requested in writing by the commissioner, from an insurer or producer; or a statement by a terminating insurer or producer to an insurer or producer limited solely and exclusively to whether a termination for cause under subsection (a) was reported to the commissioner, provided that the propriety of any termination for cause under subsection (a) is certified in writing by an officer or authorized representative of the insurer or producer terminating the relationship.

(2) In any action brought against a person that may have immunity under paragraph (1) for making any statement required by this section or providing any information relating to any statement that may be requested by the commissioner, the party bringing the action shall plead specifically in any allegation that paragraph (1) does not apply because the person making the statement or providing the information did so with actual malice.

(3) Paragraph (1) or (2) shall not abrogate or modify any existing statutory or common law privileges or immunities.

(f) (1) Any documents, materials or other information in the control or possession of the division of insurance that is furnished by an insurer, producer or an employee or agent thereof acting on behalf of the insurer or producer, or obtained by the commissioner in an investigation under this section shall be confidential by law and privileged, shall not be subject to the public records law, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action. However, the commissioner may use the documents, materials or other information in the furtherance of any regulatory or legal action brought as a part of the commissioner's duties.

(2) Neither the commissioner nor any person who received documents, materials or other information while acting under the authority of the commissioner shall be permitted or required to testify in any private civil action concerning any confidential documents, materials, or information subject to paragraph (1).

(3) In order to assist in the performance of the commissioner's duties under sections 162H to 162X, inclusive, the commissioner:-

(i) may share documents, materials or other information, including the confidential and privileged documents, materials or information subject to paragraph (1), with other state, federal and international regulatory agencies, with the NAIC, its affiliates or subsidiaries, and with state, federal and international law enforcement authorities, if the recipient agrees to maintain the confidentiality and privileged status of the document, material or other information;

(ii) may receive documents, materials or information, including otherwise confidential and privileged documents, materials or information, from the NAIC, its affiliates or subsidiaries and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material or information; and

(iii) may enter into agreements governing sharing and use of information consistent with this paragraph.

(4) No waiver of any applicable privilege or claim of confidentiality in the documents, materials or information shall occur as a result of disclosure to the commissioner under this section or as a result of sharing as authorized in paragraph (3).

(5) Nothing in sections 162H to 162X, inclusive, shall prohibit the commissioner from releasing final, adjudicated actions including for cause terminations that are open to public inspection, under clause Twenty-sixth of section 7 of chapter 4

(g) An insurer, the authorized representative of the insurer, or producer that fails to report as required under this section or that is found to have reported with actual malice by a court of competent jurisdiction may, after notice and hearing, have its license or certificate of authority suspended or revoked and may be fined in accordance with chapter 176D.

(h) Nothing in this section shall modify the provisions of section 163.

Section 162U. (a) The commissioner shall waive any requirements for a nonresident license applicant with a valid license from his home state, except the requirements imposed by section 162N if the applicant's home state awards nonresident licenses to residents of the commonwealth on the same basis.

(b) A nonresident producer's satisfaction of his home state's continuing education requirements for licensed insurance producers shall constitute satisfaction of the commonwealth's continuing education requirements if the nonresident producer's home state recognizes the satisfaction of its continuing education requirements imposed upon producers from the commonwealth on the same basis.

Section 162V. (a) A producer shall report to the commissioner any administrative action taken against the producer in another jurisdiction or by another governmental agency in the commonwealth within 30 days of the final disposition of the matter. This report shall include a copy of the order, consent to order or other relevant legal documents.

(b) Within 30 days of the initial pretrial hearing date, a producer shall report to the commissioner any criminal prosecution of the producer taken in any jurisdiction. The report shall include a copy of the initial complaint filed, the order resulting from the hearing and any other relevant legal documents.

Section 162W. The commissioner may promulgate reasonable regulations as are necessary or proper to carry out the purposes of sections 162G to 162X, inclusive.

Section 162X. If any provisions of sections 162G to 162X, inclusive, or the application of a provision to any person or circumstances, shall be held invalid, the remainder of said sections 162G to 162X, inclusive, and the application of the provision to persons or circumstances other than those to which it is held invalid, shall not be affected.

SECTION 6. Section 163 of said chapter 175, as so appearing, is hereby amended by striking out the first and second paragraphs.

SECTION 7. Section 163A of said chapter 175 is hereby repealed.

SECTION 8. Section 165 of said chapter 175 is hereby repealed.

SECTION 9. Section 166 of said chapter 175 is hereby repealed.

SECTION 10. Section 166A of said chapter 175 is hereby repealed.

SECTION 11. Section 166B of said chapter 175, as appearing in the 2000 Official Edition, is hereby amended by striking out, in lines 2 and 3, the words "one hundred and sixty-three or one hundred and sixty-six, or both" and inserting in place thereof the following figure:- 162R.

SECTION 12. Said section 166B of said chapter 175, as so appearing, is hereby further amended by striking out, in lines 5, 8 and in lines 10 and 11, the words "agent or broker" and inserting in place thereof the following words:- insurance producer.

SECTION 13. Said section 166B of said chapter 175 is hereby further amended by striking out, in line 9, the words "broker or agent" and inserting in place thereof the following words:- insurance producer.

SECTION 14. Said section 166B of said chapter 175, as so appearing, is hereby further amended by striking out, in lines 15 and 16, 17, 19 and 20 and 25, the words "broker or insurance agent" and inserting in place thereof, in each instance, the following word:- producer.

SECTION 15. Section 167 of said chapter 175 is hereby repealed.

SECTION 16. Section 167A of said chapter 175, as appearing in the 2000 Official Edition, is hereby amended by striking out, in lines 1 to 3, inclusive, the words "broker's license issued under section one hundred and sixty-six, one hundred and sixty-seven, or one hundred and seventy-three" and inserting in place thereof the following words:- producer's license issued under section 162M.

SECTION 17. Section 168 of said chapter 175, as so appearing, is hereby amended by striking out, in lines 2 and 3, the words "resident in the commonwealth".

SECTION 18. Said section 168 of said chapter 175, as so appearing, is hereby further amended by striking out, in lines 11 and 20, the words "one hundred and sixty-six" and inserting in place thereof, in each instance, the following figure:- 162L.

SECTION 19. Said section 168 of said chapter 175, as so appearing, is hereby further amended by striking out, in lines 78 to 82, inclusive, the words ", and before receiving such license shall execute and deliver to the state treasurer a bond in the penal sum of two thousand dollars, with such sureties as he shall approve, conditioned that the licensee will faithfully comply with all the requirements of this section".

SECTION 20. Said section 168 of said chapter 175, as so appearing, is hereby further amended by adding the following 3 paragraphs:-

A license to act as a special insurance broker may, upon the payment of the fees prescribed by section 14, be issued to any voluntary organization, as defined in section 1 of chapter 182, for the purpose of acting as a special insurance broker, subject to the conditions specified in section 172A.

The commissioner may, upon the payment of the fees prescribed by section 14, issue to a partnership, a license to act as a special insurance broker subject to the conditions specified in section 173.

A license to act as a special insurance broker may, upon the payment of the fees prescribed by section 14, be issued to any corporation, subject to the conditions specified in section 174.

SECTION 21. Section 172 of said chapter 175, as so appearing, is hereby amended by adding the following 3 paragraphs:-

A license to act as a fire adjuster may, upon the payment of the fees prescribed by section 14, be issued to any voluntary organization, as defined in section 1 of chapter 182, which is organized exclusively for the purpose of acting as an adjuster of fire losses, subject to the conditions specified in section 172A.

The commissioner may, upon the payment of the fees prescribed by section 14, issue to a partnership a license to act as an adjuster of fire losses subject to the conditions specified in section 173. The partnership may include nonresident insurance producers if a majority of the partners are residents of the commonwealth, and if the partnership agreement contains a statement which in substance states that the partnership agreement is a Massachusetts contract and shall be governed by, and construed and enforced in accordance with, the laws of the commonwealth, and that with respect to any legal action arising out of the transactions or activities of the partnership affairs, service of process made on any 1 of the partners shall be deemed valid and binding service upon all partners who are not residents of the commonwealth.

A license to act as a fire adjuster may, upon the payment of the fees prescribed by section 14, be issued to any corporation which is incorporated exclusively for the purpose of acting as an adjuster of fire losses, subject to the conditions specified in section 174. The majority of officers and directors to be named in the license must have been so licensed as individuals for 3 years, except that no foreign corporation shall be licensed as an insurance agent of a foreign company under section 163 or as a special insurance broker under said section 168. Each license shall specify the officers and directors who may act thereunder in the name and on behalf of the corporation, the number of such officers and directors to be determined in the discretion of the commissioner in each case.

SECTION 22. Said section 172 of said chapter 175, as so appearing, is hereby further amended by striking out, in lines 5 and 13, the words "one hundred and sixty-six" and inserting in place thereof, in each instance, the following figure:- 162L.

SECTION 23. Section 172A of said chapter 175, as so appearing, is hereby amended by striking out, in lines 1 and 2, the words "one hundred and sixty-three, one hundred and sixty-six, one hundred and sixty-seven" and inserting in place thereof the following figures:- 162M, 162N.

SECTION 24. Said section 172A of said chapter 175, as so appearing, is hereby further amended by striking out, in lines 7 and 8, the words "agent or broker" and inserting in place thereof, in each instance, the following word:- producer.

SECTION 25. Said section 172A of said chapter 175, as so appearing, is hereby further amended by striking out, in line 11, the words "agents or brokers" and inserting in place thereof the following word:- producers.

SECTION 26. Section 173 of said chapter 175, as so appearing, is hereby amended by striking out, in lines 1 and 2, the words "one hundred and sixty-three, one hundred and sixty-six, one hundred and sixty-seven" and inserting in place thereof the following figures:- 162M, 162N.

SECTION 27. Said section 173 of said chapter 175, as so appearing, is hereby further amended by striking out the second paragraph.

SECTION 28. Section 174 of said chapter 175, as so appearing, is hereby amended by striking out, in lines 1 and 2, the words "one hundred and sixty-three, one hundred and sixty-six, one hundred and sixty-seven" and inserting in place thereof the following figures:- 162M, 162N.

SECTION 29. Said section 174 of said chapter 175, as so appearing, is hereby further amended by striking out, in lines 5 to 11, inclusive, the words "which is incorporated exclusively for the purpose of acting as an insurance agent, broker or adjuster of fire losses, if the majority of whose officers and directors to be named in said license have been so licensed as individuals for three years, except that no foreign corporation shall be licensed as an insurance agent of a foreign company under said section one hundred and sixty-three or as a special insurance broker under said section one hundred and sixty-eight".

SECTION 30. Said section 174 of said chapter 175, as so appearing, is hereby further amended by striking out the third sentence.

SECTION 31. Section 174A of said chapter 175, as so appearing, is hereby amended by striking out, in lines 1 and 2, the words "one hundred and sixty-three, one hundred and sixty-six, one hundred and sixty-seven" and inserting in place thereof the following figure:- 162R.

SECTION 32. Section 174B of said chapter 175, as so appearing, is hereby amended by striking out, in lines 1 and 2, the words "one hundred and sixty-three, one hundred and sixty-six, one hundred and sixty-seven" and inserting in place thereof the following figures:- 162M, 162N.

SECTION 33. Section 174C of said chapter 175 is hereby repealed.

SECTION 34. Section 174D of said chapter 175 is hereby repealed.

SECTION 35. Section 177 of said chapter 175, as appearing in the 2000 Official Edition, is hereby amended by striking out, in line 2, the word "broker" and inserting in place thereof the following word:- producer.

SECTION 36. Said section 177 of said chapter 175, as so appearing, is hereby further amended by striking out, in lines 6 to 9, inclusive, the words "agent or as an insurance broker, both as defined in section one hundred and sixty-two, who is not then duly licensed as an insurance agent of the company for which he assumes to act or as an insurance broker" and inserting in place thereof the following words:- producer, as defined in section 162H who is not then duly licensed as an insurance producer.

SECTION 37. Said section 177 of said chapter 175, as so appearing, is hereby further amended by striking out, in line 11, the words "regularly licensed insurance broker" and inserting in place thereof the following words:- duly licensed insurance producer.

SECTION 38. Section 177B of said chapter 175, as so appearing, is hereby amended by striking out, in line 31, the words "one hundred and sixty-six" and inserting in place thereof the following figure:- 162L.

Section 39. Subsection I of section 177E of said chapter 175, as so appearing, is hereby amended by striking out paragraph (2) and inserting in place thereof the following paragraph:-

(2) Nonresident producers who hold an equivalent license or licenses in their home state and have satisfied their home state's continuing education requirements, if the home state recognizes the satisfaction of its continuing education requirements imposed upon producers from the commonwealth on the same basis.

SECTION 40. Section 177O of said chapter 175, as so appearing, is hereby amended by adding the following paragraph:-

Unless denied licensure pursuant to subsection (E), nonresident applicants shall receive a reinsurance intermediary license if: (1) the applicant is currently licensed and in good standing in the applicant's home state; (2) the applicant has paid the fees prescribed by section 14; (3) the applicant has submitted or transmitted to the commissioner the application for licensure that the applicant submitted to the applicant's home state, or in lieu of the same, a completed uniform application; and (4) the applicant's home state awards nonresident reinsurance intermediary licenses to residents of the commonwealth on the same basis.

SECTION 41. This act shall take effect on January 1, 2003.

Approved May 3, 2002.