23-64-202. General qualifications for licensure — Exemptions — Definitions.

23-64-202. General qualifications for licensure — Exemptions — Definitions. (a) For the protection of the people of this state, the Insurance Commissioner shall not, at or before completion of application processing, issue, continue, or permit to exist any license as to insurance unless the licensee is in compliance with this chapter and other applicable laws of this state, and as to any individual who does not also meet the following qualifications: (1) To obtain a license as an agent or broker, he or she shall have complied with the Producer Licensing Model Act, § 23-64-501 et seq., and subsection (b) of this section; and (2) To obtain a license as an adjuster or insurance consultant, he or she must be: (A) Of legal age of majority or must have had disabilities of minority removed for all general purposes and provide evidence of same; (B)(i) A resident of this state or of a city or town through which passes the boundary of this state, qualified as to residence under § 23-64-102(2)(B) and must have been a resident for not less than the thirty (30) days immediately prior to the date of application for the license. (ii) However, upon written request by the applicant, the commissioner in his or her discretion may waive the thirty-day residence requirement as to any applicant for license who is a bona fide resident of this state and who furnishes proof satisfactory to the commissioner that he or she is and intends to be a permanent resident of Arkansas; and (C)(i) Deemed by the commissioner to be competent, trustworthy, financially responsible, and of good personal and business reputation, and these qualifications must continue in order to remain licensed. (ii) On a case-by-case basis, the commissioner may require documentation to verify qualifications for licensure under this section. (b) All applicants for a license as an agent, broker, adjuster, or insurance consultant shall: (1) Pass a written examination for the license if required under this chapter and attest that he or she is familiar with the insurance laws of this state and will keep himself or herself familiar despite changes in the law; and (2)(A)(i) Before licensure or examination, if examination is required, complete specific courses of instruction in the field of insurance as the commissioner shall by rule prescribe for the license. (ii) Proof of completion must be presented before testing is administered. (iii)(a) The courses of instruction shall consist, in the aggregate, of not less than twenty (20) hours of classroom instruction or electronic instruction per line of insurance authority. However, an applicant shall not be required to repeat the hours of instruction on Arkansas laws and rules within two (2) years of taking those hours for a previous line of authority. (b) All instruction shall be administered by or under the supervision of persons qualifying with and approved by the commissioner for that purpose. (c) An instructor deemed qualified and approved by the commissioner shall monitor attendance and participation and shall sign a certificate evidencing the licensee's completion of the hours. (d) Applicants for adjuster and consultant licenses are exempt from prelicensing education, as are nonresident applicants for producer licenses from states that engage in reciprocal licensing with Arkansas. (iv) Successful completion of the courses of instruction shall be certified to the commissioner, on forms prescribed by him or her, by the person under whose supervision the instruction was administered. (v) The courses of instruction shall provide the applicant with basic knowledge of the broad principles of insurance, licensing, and regulatory laws of this state, and the obligations and duties of an agent, broker, or consultant. (vi) Programs of instruction may be provided by any authorized insurer, agents' association, or trade association recognized by the commissioner or by any university, college, or any other institution in this state having a comprehensive course of instruction approved and certified by the commissioner. (vii) The commissioner shall issue appropriate rules to implement the educational requirements and standards prescribed in this subdivision (b)(2) and to prescribe the general curriculum of courses of instruction. (viii) The curriculum shall include not less than five (5) hours of instruction relative to the licensing of agents and insurance regulatory laws of this state, criteria for approval of the providers of the courses of instruction, and certifications contemplated hereunder. (B) None of the provisions of this subsection shall apply to and no examination or educational requirements contained in this subsection shall be required of any applicant for a license presently exempted by law from an examination. (C) The provisions of subdivision (b)(2)(A) of this section shall not apply to persons making application for license as an agent or broker for crop hail insurance, mobile home physical damage insurance, mortgagor's decreasing term life and disability insurance, prepaid legal insurance, and fire and marine insurance written in connection with credit transactions, or any line exempted by law, for which only a limited license is issued, nor any other insurance for which only a limited license may be issued and the commissioner, by order or regulation, exempts from the educational requirements of subdivision (b)(2)(A) of this section. (c) No written examination shall be required for: (1) Any applicant for a license as a limited line credit insurance producer as defined in § 23-64-502; (2) Automobile dealers or automobile finance companies or their employees applying for licenses covering auto physical damage or the vendor's single interest on motor vehicles only; (3) Limited lines travel insurance producers and their travel retailers; (4) Applicants for licenses as nonresident agents or nonresident brokers, but subject to reciprocal arrangements as provided for in this chapter; (5) Any applicant for a temporary license under this chapter; (6) Applicants for licenses to sell credit property insurance; (7)(A) Applicants for licenses to sell funeral expense insurance exclusively. (B) “Funeral expense insurance” shall be defined in rules adopted by the commissioner; (8) Applicants for licenses to sell mortgagor's decreasing term life insurance or mortgagor's decreasing term disability insurance to debtors of the applicants or of their employers; or (9) Applicants for licenses to sell for farmers' mutual aid associations. (d)(1) The commissioner may issue to a rental company that has complied with the requirements of this subsection a limited license authorizing the limited licensee to offer or sell insurance in connection with the rental of vehicles. (2) As used in this subsection: (A) “Limited license” means the authority of a person or entity authorized to sell certain coverages relating to the rental of vehicles pursuant to the provisions of this subsection; (B) “Rental agreement” means any written agreement setting forth the terms and conditions governing the use of a vehicle provided by the rental company for rental or lease; (C) “Rental company” means any person or entity in the business of providing primarily private passenger vehicles to the public under a rental agreement for a period not to exceed ninety (90) days; (D) “Rental period” means the term of the rental agreement; (E) “Renter” means any person obtaining the use of a vehicle from a rental company under the terms of a rental agreement for a period not to exceed ninety (90) days; and (F) “Vehicle” or “rental vehicle” means a motor vehicle of the private passenger type, including passenger vans, minivans, and sport utility vehicles and of the cargo type, including cargo vans, pickup trucks, and trucks with a gross vehicle weight of less than twenty-six thousand pounds (26,000 lbs.) and that do not require the operator to possess a commercial driver's license. (3) As a prerequisite for issuance of a limited license under this subsection, there shall be filed with the commissioner a written application for a limited license signed by an officer of the applicant, in such form or forms and supplements thereto, and containing such information as the commissioner may prescribe. (4) In the event that any provision of this subsection is violated by a limited licensee, the commissioner may: (A) After notice and hearing, revoke or suspend a limited license issued under this subsection in accordance with the provisions of law; or (B) After notice and hearing, impose other penalties, including suspending the transaction of insurance at specific rental locations where violations of this subsection have occurred, as the commissioner deems to be necessary or convenient to carry out the purposes of this subsection. (5) The rental company licensed pursuant to this subsection may offer or sell insurance underwritten by a licensed insurer or authorized surplus lines carrier only in connection with and incidental to the rental of vehicles, whether at the rental office or by preselection coverage in a master, corporate, group rental, or individual agreement in any of the following general categories: (A) Personal accident insurance covering the risks of travel, including, but not limited to, accident and health insurance that provides coverage, as applicable, to renters and other rental vehicle occupants for accidental death or dismemberment and reimbursement for medical expenses resulting from an accident that occurs during the rental period; (B) Liability insurance that at the exclusive option of the rental company may include uninsured and underinsured motorist coverage whether offered separately or in combination with other liability insurance that provides coverage, as applicable, to renters and other authorized drivers of rental vehicles for liability arising from the operation of the rental vehicle; (C) Personal effects insurance that provides coverage, as applicable, to renters and other vehicle occupants for the loss of or damage to personal effects that occurs during the rental period; (D) Roadside assistance and emergency sickness protection programs; and (E) Any other travel or auto-related coverage that a rental company offers in connection with and incidental to the rental of vehicles. (6) No insurance may be issued by a limited licensee pursuant to this subsection unless: (A) The rental period of the rental agreement does not exceed ninety (90) consecutive days; (B) At every rental location where rental agreements are executed, brochures or other written materials are readily available to the prospective renter that: (i) Summarize clearly and correctly the material terms of coverage offered to renters, including the identity of the insurer; (ii) Disclose that the coverage offered by the rental company may provide a duplication of coverage already provided by a renter's personal automobile insurance policy, homeowner's insurance policy, personal liability insurance policy, or other source of coverage; (iii) State that the purchase by the renter of the kinds of coverage specified in this subsection is not required in order to rent a vehicle; and (iv) Describe the process for filing a claim in the event the renter elects to purchase coverage and in the event of a claim; and (C) Evidence of coverage is disclosed within the rental agreement provided to every renter who elects to purchase such coverage. (7) Any limited license issued under this subsection shall also authorize any employee of the limited licensee to act individually on behalf of and under the supervision of the limited licensee with respect to the kinds of coverage specified in this subsection. (8) Each rental company licensed pursuant to this subsection shall conduct a training program in which employees being trained shall receive basic instruction about the kinds of coverage specified in this subsection and offered for purchase by prospective renters of rental vehicles. (9) Notwithstanding any other provision of this subsection or any rule adopted by the commissioner, a limited licensee pursuant to this subsection shall not be required to treat moneys collected from renters purchasing such insurance when renting vehicles as funds received in a fiduciary capacity, provided that the charges for coverages shall be itemized and be ancillary to a rental transaction. The sale of insurance not in conjunction with a rental transaction shall not be permitted. (10) No limited licensee under this subsection shall advertise, represent, or otherwise hold itself or any of its employees out as licensed insurers, insurance agents, or insurance brokers. (e) [Repealed.]